Appeal partially allowed, adjustments based on estimated income. Judgment pronounced on August 30, 2023.

The Tribunal partially allowed the appeal, directing the assessing officer to make adjustments based on the estimated income. The judgment was pronounced on August 30, 2023.

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Issues Involved:
The issues involved in the judgment include the validity of re-opening assessment, passing of an ex-parte order, addition of unexplained income under section 68 of the Income Tax Act, and addition of 8% of contract income under section 44AD.

Validity of Re-opening Assessment:
The appeal was directed against the order of the National Faceless Appeal Centre, Delhi, for the assessment year 2011-12. The Assessing Officer re-opened the assessment based on the belief that income had escaped assessment due to cash deposits and contract receipts. The notice under section 148 was issued, but the assessee did not file a return of income. The Ld. CIT(A) upheld the validity of re-opening, stating that a reasonable belief is required for re-opening and that it was based on valid information of cash deposit.

Passing of Ex-parte Order:
The Assessing Officer passed an ex-parte order under section 144 of the Income Tax Act, 1961, as the assessee did not respond to notices. The Ld. CIT(A) confirmed this action, noting that the assessee failed to explain the nature and source of the credit in the bank account. The Ld. CIT(A) also rejected the contention that the assessment order was passed beyond the limitation period, stating it was completed within nine months of serving the notice under section 148.

Addition of Unexplained Income under Section 68:
The Assessing Officer made an addition of Rs. 14,29,763 as unexplained income under section 68 of the Income Tax Act. The Ld. CIT(A) upheld this addition, as the assessee failed to provide a satisfactory explanation for the credit in the bank account. However, the Tribunal decided to estimate the income at 10% of the credit/deposits in the bank account, partially allowing the ground of appeal and directing the assessing officer accordingly.

Addition of 8% of Contract Income under Section 44AD:
Additionally, the Assessing Officer added Rs. 8,064 as 8% of contract income under section 44AD. The Ld. CIT(A) confirmed this action. The Tribunal considered the precedent set by the jurisdictional High Court and estimated the income at 10% of the credit/deposits in the bank account, partially allowing the appeal.

Conclusion:
The Tribunal partially allowed the appeal, directing the assessing officer to make adjustments based on the estimated income. The judgment was pronounced on August 30, 2023.

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