Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (6) TMI 751 - AT - Income TaxRevision u/s 263 - case of assessee was reopened in respect of escapement of income through accommodation entry provided by Akash Agarwal group in the garb of bogus billing - PCIT observed that the AO’s action of applying u/s. 44AD of the Act i.e. 8% on the purported accommodation entry from Akash Agarwal group is erroneous and resulted in under assessment of income - HELD THAT:- Since actual contractual work (construction of new road (11 km.), leveling, formation of village road etc. as given in the table supra) has been found to have been executed by some other persons in the remote areas of mines situated at Barajamda, Jharkhand, the AO presumed that the purpose of availing the billing from M/s. Simplex must be for inflation of expenses and thereafter adopted the presumptive tax rate as envisaged u/s. 44AD of the Act. Since the AO’s aforesaid finding is based on the evidence in the form of photos/work, completion report and the payment released by reputed companies for the successful completion/execution of works contract, the finding of the AO is a plausible view and cannot be termed perverse. It is trite law that only the net income can be brought to tax. For that expenditure incurred by the assessee has to be allowed to determine the net income of the assessee. In this case, the AO has found that assessee has executed the contract through some one. For execution of the work contract, the assessee received payment from the contractor and the assessee’s expenditure incurred need to be allowed. For doing that AO has found that though bogus billing has been made through M/s. simplex, work contract has been executed through some one. So, he was of the opinion that procuring the bills through M/s. Simplex was for inflation of expenses and to plug the revenue loss on account of that he applied the presumptive tax rate u/s. 44AD. Therefore, the action of AO on the facts and circumstances as discussed is a plausible action and cannot at any rate by termed as “unsustainable in law”. Therefore, the action of Ld. PCIT to invoke the revisional jurisdiction is absent and therefore, the impugned action of Ld. PCIT is held to be bad in law and so quashed. - Decided in favour of assessee.
|