Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 1397 - AT - Income TaxEstimation of profit – Held that:- The decision in M/s. C. Eswara Reddy & Co. vs. ACIT [2011 (1) TMI 1238 - ITAT HYDERABAD] followed - On examination of the books of account with reference to the voucher produced, the Assessing Officer found that the voucher does not tally with the cashbook - When the voucher does not tally with cashbook, the book results will not reflect the correct profit of the assessee - The Assessing Officer has rightly rejected the books of account - When the books of account were rejected the only method available to the Assessing Officer is to estimate the profit. The profit ratio cannot be a constant factor for each and every year - Tribunal has been uniformly estimating the profit from main contract at 8% to 12.5% depending upon the factual situation and 5% to 7% on the sub contract depending upon the factual situation - The income of the assessee is to be estimated at 8% of gross contract receipts unless the assessee furnished the details of seigniorage charges - Before the AO the assessee has not furnished details of contract receipts – thus, the assessee is directed to furnish details of contract receipts as well as seigniorage charges - On receipt of these details, the AO shall apply the net profit at 8% on the contract receipts - the issue is remitted back to the AO for fresh consideration. Deletion of addition made u/s 68 of the Act – No scope for further addition - Held that:- The decision in Sri P.V. Sitaramaswamy Naidu vs. Addl. CIT [2014 (1) TMI 1266 - ITAT HYDERABAD] followed - The availability of funds representing the intangible additions should be quantified not with reference to what the assessee offered for taxation but what was actually adopted in assessments for taxation - the assessee has failed to show how the addition u/s. 68 is related to estimated income - the addition made towards sundry creditors made u/s. 68 of the Act falls under the head "income from other sources" – the order of the CIT(A) set aside and the matter remitted back to the AO - Decided partly in favour of Assessee.
|