Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (10) TMI 290 - AT - Income TaxDetermination of income from business – Estimation of Net profit @ 10% of WIP – Administrative and financial charges and depreciation disallowed - Held that:- The assessee has been estimating profit with reference to the advances received - The profit is worked out on the advances but while showing the same in Profit and Loss A/c. it was wrongly mentioned as notional profit on work-in-progress - the AO correctly mentioned in the assessment order that the profit was estimated at 10% of advances and for A.Ys. 2003-04 to 2006-07, the estimation was accepted by the AO while completing assessment u/s. 153A of the Act - the order of the AO is set aside and to rectify the mistake of taking 10% of work-in-progress instead of 10% of advances keeping in mind that the method of accounting followed should be consistent as in earlier years. The CIT(A) has pointed out with respect to income from rent that nothing has been submitted to establish that it is in the nature of income from house property so as to get deduction u/s. 24 - Similarly with respect to miscellaneous recoveries the assessee's explanation that they were from regular business has not been substantiated - interest earned being part of the business income is also not established – thus, the matter is to be remitted back to the AO for fresh adjudication – Decided partly in favour of assessee.
|