AI Drafter 
TaxTMI 
TaxTMI 
2015 (3) TMI 1318
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....Income Tax Act (Act). In addition to that, Assessing Officer also disallowed amounts paid towards work contracts on the reason that TDS was not disallowed u/s.40(a)(ia). Even the depreciation was also partly disallowed. Thus, as against the income returned at Rs. 6,36,055/-, the total income was determined at Rs. 96,21,910/-. 3. The Ld.CIT(A) after considering the detailed submissions of the assessee held that the additions/disallowances made by the Assessing Officer are not justified. The Revenue is not in appeal on the issue of deletion of additions or disallowances made by the Assessing Officer. The Ld.CIT(A) while holding that the disallowance and additions cannot be sustained as they are not based on facts but on presumptions however, rejected the Books of Accounts and estimated the income at 8% of the turnover and allowed interest on partner's capital and remuneration paid to partners. He accordingly determined the total income at Rs. 15,90,638/- in his order. Revenue is aggrieved on the rate of estimation of income and allowing deduction towards interest and remuneration paid to partners u/s.40(b). 4. Ld.DR submitted that estimation of income at 8% is very low and ....
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....urnover/total contract receipts does not exceed Rs. 40 Lakhs up to AY.2010-11 (which was subsequently modified to Rs. 60 lakhs and now w.e.f. 01-04-2013 stood at Rs. 1 Crore). These indicate that rate of profit cannot be a fixed figure for each year. It would vary depending upon various factual situations/factors. It cannot be fixed on the basis of the Tribunal or judgment of the High Court. In our opinion, the decision of the Tribunal or judgment of the High Court may be one of the guiding factors for fixing the profit ratio for particular assessee in a particular year. In this case, as seen from assessee's P&L A/c assessee's sales stood at Rs. 2.71 Crores, whereas its closing stock was at Rs. 2.88 Crores. Construction cost during the year is about Rs. 3.81 Crores. This indicate that the project has not yet been completed or partly completed. However, as seen from the P&L A/c placed on record which was basis for the Assessing Officer to make disallowances, assessee has earned gross profit at 15% and Net Profit 5.4%. Assessee has major liability in the form of interest on term loans for reduction in profit from 15% gross to 5% net. Keeping these factors and also the fact th....
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....me among the partners interest, salary, commission or remuneration paid to partners are to be reduced from the gross income of the partnership firm. The balance is divided among the partners in their profit sharing ratio, the amounts paid to partners i.e., interest, salary, bonus, commission or remuneration are added to the income of the individual partner. The profits distributed were assessed in the assessment of the partners. However, the provisions with regard to the assessment of partnership firms have undergone change from 01-04-1993 i.e., for the AY.1993-94 onwards. Now, all firms are uniformly assessable as firms only and there is no difference in tax rates. The profit derived from the partnership firm is exempt in the assessment of the partners as the same is being taxed at normal rates in the assessment of the partnership firm itself. Only salary or interest paid to the partners is subject to tax in the assessment of the partners as the same is excluded from the assessment of the partnership firm. Provisions of Section 40(b) allows interest paid to partners and remuneration paid to the partners as an allowable deduction, subject to certain conditions mentioned in Section ....
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.... have been rejected and best judgment assessment has been made. It was held: "The procedure for making assessment in a matter where voluntary return submitted by the assessee under s.139(1) is not accepted by the AO has been given under s.143(3), whereas procedure for giving best judgment assessment is given under s.144. Merely because the procedures for such assessments have been separately provided in the aforesaid two section relating to an assessee where the voluntary return has not been found as acceptable by the AO and where the books of account have been rejected and best judgment assessment has been made, it would not in itself be sufficient to hold that the statutory deductions which are otherwise available to the assessee, would not be available to the assessee who has been assessed under best judgment assessment by the AO, unless, of course, any rule or provision of the Act expressly excludes the benefit of statutory deductions to such an assessee. If the interpretation given by the Revenue is accepted, it would mean that in a case where the assessee's books of account have been rejected or, for any other reason, whatsoever, best judgment assessment has been....