Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 358 - AT - Income TaxEstimation of income of contract receipts - CIT-A estimating the profit @ 8% of the turnover - HELD THAT:- The project was undertaken, therefore, ld. CIT(A) is justified in holding that the Assessing Officer was to estimate a reasonable net profit on same as when the assessee had undertaken the project, the expenditure on same must have been incurred. Thus, if the entire amount is disallowed, it would result in a profit rate of 21.52%, which would be unjustified. Therefore, for tax purposes, as equitable considerations cannot override the provisions of Act, the ld. CIT(A) made a proper estimation of income on the ground that the actual document found during the course of search suggests that the assessee is a civil contractor for health department and the only thing objected by the AO was claim of higher expenses but the AO went on making addition largely on the basis of assumption and to some extent on the basis of deliberation of facts, gathered. CIT(A) was correct in observing that the assessee as well as AO were not justified in so far as the assessee offered income only at ₹ 29,26,994/- from the total contract receipt of ₹ 7,36,97,747/which is only 4% net profit and on the other hand, the Assessing Officer estimated a much higher net income from contract at ₹ 2,44,33,621/- which comes to an unreasonable net profit from contract. Considering both of the net profits as unjustified and incorrect, the ld. CIT(A) rightly estimated the net profit of the assessee at 8% of the contract receipt
|