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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 21.11.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC, Delhi.
In this case, the Ld. AO vide order dated 12.08.2021, passed an order with an addition of Rs.07,24,322/- by estimating the gross profit at 8%. This estimation of GP was done on the ground that the assessee could not submit details of entire quantum of purchases of the assessee amounting to Rs.66,89,07,021/-. It is seen from the Ld. AO’s order that only about half of these purchases could be verified. Thereafter, the Ld. AO rejected the books of account u/s 145(3) of the Act and made the impugned addition.
The assessee approached the Ld. CIT(A) with his grievance against the action of Ld. AO but there also he could not succeed on the ground that only 2.96 crores worth of purchases could be verified by the assessee as against total purchases amounting to Rs.6.68 crores. The Ld. CIT(A) has pointed out other defects in the book results of the assessee as well. Thereafter, the estimate of net profit at 8% of gross receipts (amounting to Rs.9,78,04,031/-) has been sustained.
The aggrieved assessee has now approached the ITAT with grounds challenging the action of authorities below.
Before us the Ld. AR stated that the specific grounds pertaining to the impugned addition being ground nos. 3, 4, 6, 8 & 9 deserve to be specifically dealt with. It was argued that the books of account were audited and due to limitations on the I.T. Portal for uploading documents, ledgers and vouchers could not be uploaded. It was the submission that details of entire purchases were submitted before the Ld. AO but he only considered some part of it. The Ld. AR relied on several authorities in support of his contention. The Ld. AR also prayed that the assessee was not interested in contesting this matter any further and wanted closure, one way or another. It was also averred that except the grounds pertaining to addition on merits no other grounds are pressed.
The Ld. DR relied on the orders of the authorities below.
We have considered the submissions of Ld. AR/DR and we also have perused the records before us. It is seen that while the assessee was not able to present the entire set of documents and facts before the authorities below for some reason or the other, but it is believable that the assessee could not upload the entire set of facts and documents on the I.T Portal. At this stage, it is felt that to bring an end to the controversy and to ensure that the ends of justice are met, we deem it fit to estimate the addition after assuming a rate of 3% rather than a rate of 8% as has been done by the Ld. AO. We direct that the Ld. AO should work out the addition on the basis of 3% in place of 8% and give consequential relief to the assessee.
In the result, the appeal is partly allowed.