Estimation of Income – Rejection of Books – Section 145(3) – Failure to conduct audit under Section 44AB – Income declared at 0.187% of turnover – Assessing Officer estimated income @ 10% of turnover – Tribunal held that in absence of audit and proper explanation for drastic fall in profits, estimation justified but rate excessive – Past effective NP rate of 1.52% accepted – Addition restricted accordingly – Partly in favour of assessee.

54. [2025] 125 ITR(T) 160 (Jaipur - Trib.)

Adworld Communications (P.) LTD. VS. DCIT

ITA NO:. 1049 (JPR.) OF 2024

A.Y.: 2011-12 Date: 29.04.2025

Estimation of Income – Rejection of Books – Section 145(3) – Failure to conduct audit under Section 44AB – Income declared at 0.187% of turnover – Assessing Officer estimated income @ 10% of turnover – Tribunal held that in absence of audit and proper explanation for drastic fall in profits, estimation justified but rate excessive – Past effective NP rate of 1.52% accepted – Addition restricted accordingly – Partly in favour of assessee.

FACTS I

A survey action under section 133A was carried out at the business premises of the assessee. As per the AST data available with the department, the assessee failed to comply with section 139 for the year under consideration, despite the fact that the assessee's total business receipt was 7.96 crores. In view of this figure under the head 'business' and non-filing of return, a notice under section 148 was issued.

In response thereto, the assessee filed a return declaring total income of ₹