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2011 (8) TMI 1265 - AT - Income TaxN.P. determination - confirming the action of Assessing Officer in estimating net income from work contract of the assessee @ 10% on gross contract receipts - Held that:- We find that the assessee is an Engineering Cooperative Society and engaged in the business of execution of work contracts including retail distribution of LPG and manufacturing of bricks and RCC pole casting. In view of this specific nature of assessee’s business and as conceded by the assessee i.e. a fair and reasonable estimate of 6% of net profit of gross contract receipt will meet the ends of justice and we estimate net profit at 6%, in view of facts and circumstances that assessee’s outstanding sundry creditors are bogus and books of account rejected are not supported by vouchers. Accordingly, we direct the Assessing Officer to recompute the income by applying 6% of net profit on gross contract receipts. Appeal of the assessee is allowed in part. Penalty u/s 271(1)(c) - In case of estimate of net profit, as is in the given facts and circumstances of the case, penalty u/s. 271(1)(c) cannot be levied and we delete the same. Orders of the lower authorities are reversed and appeal of assessee is allowed.
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