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2018 (5) TMI 1579 - AT - Income TaxEstimation of income @12.5% on gross receipts - Held that:- As per the findings of the AO and as per the evidences found during the course of search with regard to inflation of expenditure, suppression of income and suspicious nature of sub contracts, we hold that the estimation of income at 12.5% is reasonable and accordingly we decline to interfere with the order of the Ld. CIT(A). Estimation of profits on sub-contracts - AR during the appeal hearing argued that estimation of income @12.5% on sub contracts is unreasonable and unjustified - Held that:- Estimation of income @8% on sub contract works is reasonable. Accordingly we direct the AO to estimate the income @8% on sub contracts and estimate the income @12.5% on own contracts. While estimating the income on sub contracts the A.O. is directed to exclude the sub contract payments in respect of the sub contracts in para No.14 of this order which are held to be name lenders. Allowance of depreciation - gross or net income estimated - Held that:- In the instant case the AO has not disbelieved the purchase of assets or the use of assets for the purpose of business. Therefore, as relying on case of Awasthi Traders [2016 (11) TMI 894 - SUPREME COURT] we hold that CIT(A) has rightly directed the AO to grant the deduction for depreciation out of gross income estimated
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