9911796707
TMI Blog2024 (10) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... order. 2. ITA No. 672/Jodh/2014 has 11 grounds of appeal, this is filed against the appellate order passed by the National Faceless Appeal Centre, (NFAC), Delhi [ ld. CIT (A)] dated 21.08.2024 wherein the appeal filed by the assessee against the assessment orders passed under Section (u/s.) 143(3) of the Income Tax Act, 1961 (hereinafter called the 'Act') by ITO, Circle-3, Jodhpur [The ld. AO] was dismissed. Therefore, assessee is aggrieved with the following grounds of appeal: "1. That on the facts and in the circumstances of the case, the Id CIT(A) grossly erred in upholding the validity and legality of assessment order passed by ld AO. 2. That on the facts and in the circumstances of the case, the Id CIT(A) grossly erred in disrega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted the declared progressive trading result as same was not only reasonable, and better but also supported from judicial decisions of Hon'ble Jurisdictional High Court. 8. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing." 3. Briefly stated the facts shows that assessee is a contractor engaged in the business of Civil Contractor filed its return of income on 31.10.2017 at a total income of Rs. 72,90,340/-. The case was selected for limited scrutiny by issue of notice u/s. 143(2) of the Act on 18.08.2018. The learned Assessing Officer examined the case of the assessee and found that assessee has total turnover of Rs. 22.31 crores and has earned gross profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest to partners and remuneration. He further disallowed Rs. 3,75,000/- u/s. 40A(3) of the Act. 4. Accordingly, the total income of the assessee was determined Rs. 1,31,46,993/- against the return of income of Rs. 72,90,340/- by passing an assessment order on 24.12.2019. 5. Assessee challenged the order before the learned CIT(A) wherein the assessee challenged the rejection of books, addition on merit, disallowance under Section 40A(3) of the Act. The learned CIT(A) after considering the submission of the assessee dismissed the appeal of the assessee upholding the action of the Assessing Officer. 6. The assessee aggrieved with the same has preferred appeal before us. Ld AR has furnished a paper book containing 57 pages and also relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion allowances, payment of interest to partners and remuneration to the partners. The grievance of the assessee is that when 8% profit is estimated and interest to partners are granted as deduction, the Assessing Officer are also should have directed to grant payment of interest expenditure paid to the bankers and third party. He submits that the assessee has paid interest to various parties for borrowing made by it for construction work. The 8% profit margin is without any corroborative and comparable instance. When the interest to partner is granted as deduction why interest to other parties should not be granted as deduction, there is no reasoning given by the learned Assessing Officer. It is not the case of the Revenue that gross profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Assessing Officer to compute the net profit of the assessee @ 8% of the gross receipt and then grant deduction of depreciation allowance, interest paid to banks and other parties, partners and remuneration to the partners. Accordingly, Ground No. 6 of the appeal is allowed. 10. Coming to the second issue of disallowance u/s. 40A(3) of the Act where the books of account of the assessee are rejected of Rs. 3,75,000/- is under challenge. We find that when the books of account of the assessee are rejected and profits are estimated, There is no reason to make further disallowance of Section 40A(3) of the Act because of the reason that when the profit is estimated all kind of disallowances are incorporated therein. 11. This issue is cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted by the Assessing Officer for the reason that in earlier year the assessing officer himself has considered the net profit rate of 8% as appropriate. 15. The appeal of the assessee is that assessee should be granted deduction on interest expenditure paid to bank other party. We find that the facts /issues are similar to the ITA No. 672/Jodh/2024 wherein the learned Assessing Officer is directed to grant deduction of interest expenditure paid to 3rd party and banks after the profit determination of 8% along with the interest and remuneration to the partners and depreciation allowance. Therefore, the assessee should be allowed deduction interest expenditure also. Accordingly, Ground No. 6 of the appeal is allowed. 16. No other ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
