TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 535
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....d Rs. 49,69,048/- in the return of income. When questioned, the assessee submitted that he has not maintained books of accounts for civil contract business. He submitted that the Income tax portal did not accept gross receipts, when it exceeds Rs. 1.00 crore. Hence the assessee has filled up the net income in the return of income. He submitted that he has estimated income before depreciation and interest @ 8% on the gross contract receipts, which worked out to Rs. 49,69,048/- and deducted expenditure towards depreciation and interest there from. Accordingly, the assessee has declared net income of Rs. 14.48 crores. The assessee submitted that the income has been estimated around 8% taking guidance from the provisions of section 44AD of the Act (though the said provision is not applicable to him) and depreciation and interest expenditure was deducted therefrom. In support of this exercise, the assessee relied on the decision of Hon'ble Kerala High Court rendered in the case of Sammurai Techno Trading Company Ltd. Vs. CIT (2010) 37 DTR 386. 4. The A.O. did not accept the income declared by the assessee. He expressed the view that the onus of proving income declared by the assessee a....
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....owing order:- "11. The discussion above clearly shows that the assessment order dated 24.10.2018 for the AY 2016-17 is erroneous and prejudicial to the interest of revenue in so far as it has led to loss of revenue. After hearing the assessee and perusing the submissions, I am of the view that this is a fit case for action u/s 263. The assessment order for AY 2016-17 is set aside with a direction to do de-novo assessment. Aggrieved by the order of Ld PCIT, the assessee has filed this appeal before the Tribunal. 7. The Ld. A.R. submitted that the assessing officer has duly examined the income declared by the assessee from civil contract works by raising queries. After considering the replies given by the assessee, the A.O. has taken a conscious decision to estimate the income @ 9.50% of gross receipts as against 8% estimated by the assessee and allowed deduction of depreciation and interest. In support of this submission, the Ld. A.R. took us through the queries raised by the A.O. and the replies given by the assessee. Accordingly, the Ld. A.R. submitted that the assessing officer has taken a plausible view on the matter and hence the Ld. PCIT was not justified in initiating th....
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....r presumptive taxation (u/s 44AD) which is not applicable to you. It is therefore obvious that the software did not allow you to enter the turnover which was in excess of Rs. 1 crore. You have sought to bypass the software by misrepresenting the suppressing your turnover figures. Instead of entering turnover of Rs. 6,22,65,982/- you have entered a figure of Rs. 49,69,048/- which means that you have deliberately understated the turnover by Rs. 5,72,96,934/-. For the purpose of this assessment, the turnover as per 26AS of Rs. 6,22,65,982/- is proposed to be adopted as a starting point. In your letter referred above, you have not explained how you arrived at income of Rs. 49,69,048/- before deducting depreciation and interest on over draft. You are required to explain in detail the basis for arriving at income of Rs. 49,69,048/- (before depreciation & interest) giving the breakup of various direct and indirect expenses deducted and supporting evidences thereof." We notice that the assessee furnished a reply dated 27.8.2018 contending that the CBDT has not prescribed books of accounts required to be maintained for the purpose of section 44AA read with Rule 6F(1) for civil contract....
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....xpenditure incurred by them. Only a sum of Rs. 12.38 crores was actually paid to the assessee. On that basis a sum of Rs. 4,95,970/- was the income offered by the assessee in the return of income. However, the Assessing Authority after scrutiny of the entire material on record added a sum of Rs. 80,64,764/-. Thus, the total income was determined at Rs. 85,60,730/-. The said income with reference to the contract receipts of Rs. 13.37 crores works out to 6.4%. Therefore, the contention that it works out to 0.12% is erroneous. 8. Even in respect of the main contract, in respect of civil contracts 8% is taken normally as the income earned out of such contracts. When such a contractor gives the work to a sub contractor normally about 5% is taken as the income of the contractor. In the instant case it works out to 6.4%. The tenor of the order of the Commissioner under Section 263 of the Act discloses that, because the net profit shown in the Profit and Loss Account was only Rs. 4.63 lakhs which works out to 0.12% the proceedings are initiated. Factually it is incorrect. In those circumstances, in the absence of any other material which was before the Commissioner he was not justified ....