No adhoc addition on estimation basis sustainable if assessee submitted every entry of trading account before the Adjudicating Authorities

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No adhoc addition on estimation basis sustainable if assessee submitted every entry of trading account before the Adjudicating Authorities

No adhoc addition on estimation basis sustainable if assessee submitted every entry of trading account before the Adjudicating Authorities

Hari Om Kumar Tayal Vs ITO
Whether when the assessee has submitted the audit report and every entry of trading account before the adjudicating authorities, then no adhoc addition on estimation basis is called for – YES: ITAT
– Assessee’s appeal allowed: DELHI ITAT
Whether when the assessee has submitted the audit report and every entry of trading account before the adjudicating authorities, then no adhoc addition on estimation basis is called for – YES: ITAT
++ from the examination of the letter filed before the AO, it is observed that assessee has filed the audit report in response to a notice issued by the AO. The entire basis and premise for making an ad hoc addition gets vitiated in the light of the fact that audited accounts and the entire audit report was filed before the AO as well as before the CIT(A), which fact stands established by the Tribunal in the penalty proceeding. Apart from that, the assessee has given the entire details relating to trading account and profit and loss account and balance sheet including details of opening stock, purchases and the sales made by the assessee before the CIT(A) which was also sent to the AO to submit his remand report, on which he did not comment. Therefore, once assessee has filed all the details and the audit report and has given explanation with regard to each and every entry of the trading account including expenses incurred with evidences, then no ad hoc estimation of income or disallowance of expenses can be made. Accordingly, entire addition made by the AO and sustained by the CIT(A) stands deleted.
ITA No.2478/Del/2018

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