Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (10) TMI 556 - ITAT HYDERABADEstimation of income - Deduction of expenditures from estimated income - Held that:- Estimation of income at 9% in respect of the contracts taken by the assessee itself and executed by it; at 8% in respect of receipts from sub-contract works taken from others and executed by the assessee; and 4% of the gross receipts in respect of contracts given by the assessee to third parties on sub-contract basis, as reasonable. In consonance with the view taken in similar cases, also considering the fact that the assessee is dealing with construction as well as development activities, we set aside the impugned order of the CIT(A) and direct the Assessing Officer to recompute the income of the assessee at 9% of the gross receipts in respect of contracts taken on its own for construction and additional 2% for the development activities. In total, the income should be estimated @ 11% of the gross receipts. Allowability of depreciation out of estimated income is concerned, we find that this Tribunal in similar matters, as in the case of M/s. Teja Constructions, Secunderabad, [2014 (1) TMI 832 - ITAT HYDERABAD] has been consistently holding that depreciation being an allowable deduction under S.32 of the Act, and since all out goings falling under S.30 to 38 are deemed to have been allowed while estimating the income, no separate deduction is allowable in respect of the same out of the estimated income in this respect. Depreciation should be excluded but the interest and remuneration to working partners are allowable as deduction as it does not fall under section 30 to 38 of the Act. Accordingly, Assessing Officer is directed to estimate the income @ 11% on gross receipts and to give deduction of interest and remuneration to partners.
|