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2012 (12) TMI 411 - ITAT CUTTACKComputation of net profit at 8% u/s 144 - estimation of income - application rate prescribed in section 44AD - held that:- we feel it reasonable to estimate the income on gross receipts @6% for the Assessment Year 2007-08. However, as per the financial result disclosed for the Assessment Year 2008-09 we do find that the Assessing Officer had made additions on account of disallowance of sundry creditors which had increased not in proportion to the increase in the material cost therefore indicated that the assessee had raised bills on the contractees when the material cost was still to be borne by the assessee. In this view of the matter, the estimation at 8% confirmed by the learned CIT(A) by deleting these additions and disallowances made u/ss.68 and 69 we hold 7% profit as reasonable to be taxable income on the gross receipts disclosed by the assessee in its financial statements. To conclude for the Assessment Year 2007-08 the AO is directed to tax 6% of the gross receipts as taxable income of the assessee and for the Assessment Year 2008-09 he is directed to tax 7% of the gross receipts as taxable income of the assessee. - Decided in favor of assessee.
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