TaxTMI 
TaxTMI 
2022 (9) TMI 869
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....3 of the Income Tax Act, 1961 ["the Act"] for the AY 2010-11. 2. Brief facts of the case are that the assessee a partnership firm, being a transport operator filed its return of income for the AY 2010-11 on 15/10/2010 admitting a loss of Rs. 1,35,98,701/. Subsequently, the case was selected for scrutiny and the assessment proceedings was completed u/s. 143(3) determining the total income at Rs. 16,89,380/-. While determining the total income by the AO, the Ld. AO has rejected the books of accounts and estimated the income @ 15% of the Gross Receipts and allowed the depreciation of Rs. 1,93,47,466/-. Subsequently, the Commissioner of Income Tax, Vijayawada (CIT) invoking the provisions of section 263 of the Act, set aside the assessment ord....
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.... 3% on gross receipts net of all deductions which the department has accepted. 4. For these and others reasons that are to be urged at the time of hearing of the case the appellant prays that the order passed U/s. 143(3) r.w.s 263 of the Act is contrary to the facts of the case and provisions of law the same needs to be deleted in the interest of justice." 4. The Ld. AR argued that the AO has originally estimated 15% of the gross receipts by allowing depreciation of Rs. 1,93,47,466/-. However, the Ld. AO while passing the order U/s. 143(3) r.w.s 263 disallowed the depreciation. The Ld. AR further pleaded that in the assessee's own case in ITA No.35 to 38/Viz/2013 (AYs: 2006-07 to 2009-10) the Hon'ble ITAT vide its order dated 14/2/2017 ....
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....ircumstances, the AO has been left with no other option but to estimate the profit @ 15% net of all deductions including depreciation. No doubt, the estimation of net profit is one of the methods of the determination of income from business considering the facts and circumstances of each case. The Ld. AO has failed to bring on record any comparable cases to support the net profit estimated by him. We find that the coordinate bench of this Tribunal in the case of ITO vs. Sri Gundapaneni Nageswara Rao (supra), under similar set of facts, has directed the AO to estimate net profit of 3% of all deductions including depreciation. Though, there are divergent view from the appellate authorities, the view which is more beneficial to the assessee ha....