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2021 (4) TMI 842 - AT - Income TaxEstimation of profits from contractual receipts and sale of plots - CIT(A) estimating the assessee’s profits from contractual receipts and sale of plots @8% and @5% respectively, than that @15% of wholesale basis adopted by AO - HELD THAT:- We are of the opinion that the CIT(A)’s estimation for assessee’s contractual receipts hardly calls for any interference since he has been guided by various judicial precedents as well as the nature of the taxpayer’s contractual works performed. There can be hardly any dispute that a contractual assignment does not carry business risk at higher rate since involving asserted returns and all expenses relevant thereto. We thus find no merit in the former grievance. Estimation of assessee’s profits from sale of plots @5% - It is not in dispute that it had not placed on record all of the corresponding details of plots sold in both rounds of the instant lis. AR pressed very hard in support of the CIT(A)’s conclusion that 5% profit rate on sale of plots is indeed just and proper. We find no reason to accept learned counsel’s arguments in entirety. The fact remains that contrary to the assessee’s contractual receipts, is this segment of sale of vacant plots has of course not undergone the other inputs of labour and construction expenditure heads. These plots have been sold on as and where basis in other words. It can therefore be sufficiently presumed that in absence of any value addition or improvement or improvement, the sale of these vacant plots must have resulted in higher margin than mere profit rate 5%. We therefore exercise our inherent jurisdiction u/s.254 of the Act to re-estimate the profit rate on this latter segment as 8% only. It is made clear that the same would not be treated as precedent in any other assessment year or in any other case; whatsoever. Necessary computation as per law to follow.
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