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2016 (5) TMI 344 - AT - Income TaxEstimation of business income - Held that:- The issue has already been considered and adjudicated by the coordinate bench of this Tribunal in the case of one of the assessees herein, viz., Maa Highways, for assessment year 2007-08, wherein estimation of income in the hands of subcontracts at 5% of the gross receipts was held to be reasonable. Respectfully following the same, we hold that in all these cases as well, the business income of the assessees for the years under appeal be estimated at 5% of the gross receipts, and additions if any, may be determined accordingly. - Decided in favour of assessee in part. Additions made on protective basis - Held that:- Though the authorities below have not mentioned the section under which the disallowance and the consequential additions are made, from the order of the Assessing Officer, it appears that the receipts of the assessee were disallowed as they are not used for business activity. Thus, it is disallowance of business expenditure. The CIT(A) has rightly pointed out that the amounts withdrawn cannot be presumed to have been deployed and incurred towards revenue expenditure and got debited to the Profit & Loss Account. Where there is estimation of business income, disallowance and consequential addition of revenue expenditure is not sustainable, as held by the jurisdictional High Court in the case of Indwell Constructions (1998 (3) TMI 121 - ANDHRA PRADESH High Court ). In view of the same held that no separate disallowance of expenditure shall be made once income is determined by resorting to estimation. Respectfully following the same, we do not see any reason to interfere with the orders of the CIT(A).- Decided in favour of assessee.
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