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2022 (9) TMI 869 - ITAT VISAKHAPATNAMEstimation of income @ 15% on the gross receipts without allowing the depreciation - HELD THAT:- Admittedly the books of accounts are not susceptible for verification. In these circumstances, AO has been left with no other option but to estimate the profit @ 15% net of all deductions including depreciation. No doubt, the estimation of net profit is one of the methods of the determination of income from business considering the facts and circumstances of each case. AO has failed to bring on record any comparable cases to support the net profit estimated by him. We find that in the case of ITO vs. Sri Gundapaneni Nageswara Rao [2014 (5) TMI 344 - ITAT HYDERABAD] under similar set of facts, has directed the AO to estimate net profit of 3% of all deductions including depreciation. There are divergent view from the appellate authorities, the view which is more beneficial to the assessee has to be adopted in case of CIT vs. Vegetable Products Limited [1973 (1) TMI 1 - SUPREME COURT] - Therefore, we are of the considered view that since the assessee has not proved the ownership of assets to claim the depreciation and also that the facts of the present case are similar to the facts of the case considered by the ITAT [2014 (5) TMI 344 - ITAT HYDERABAD] we deem it appropriate to direct the AO to estimate net profit of 3% on gross receipts net of all deductions including depreciation. We direct the AO to estimate net profit of 3% on gross contract receipts net of all deductions for the AY 2010-11. Assessee appeal allowed.
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