TaxTMI 
TaxTMI 
2024 (8) TMI 114
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....g the books of accounts, there is any scope for further additions to be made based on the entries in the books of accounts? 2. Whether when such estimation of profit is made, the Commissioner under Section 263 of the Income Tax Act, 1961, can revise the assessment order finding prejudice on the revenue, which is an essential ingredient in invoking Section 263, along with an erroneous finding by the Assessing Officer? 2. The learned Standing Counsel for the revenue argued that in the present case, the assessee was a works contractor, who in addition to the said income had income from other sources, in the subject assessment year, being 2012-13. The Assessing Officer looked at the books of accounts and directed the assessee to pro....
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.... CIT & others; (2016) 388 ITR 579 (Pat-HC) and Asst. CIT vs. Salauddin; (2019) 414 ITR 335 (Pat-HC). Reliance is also placed on CIT vs. Aggrawal Engg. Co (Jal.); (2008) 302 ITR 246. 5. We will first consider the decisions placed on record and then look at the application of the dictum to the facts of the case. The first of the cases placed before us is CIT vs. Aggrawal Engg. Co (supra) of the Punjab and Haryana High Court. Therein, the assessee being a civil contractor filed the return based on which the assessment was made, which was cancelled under Section 263 of 'the Act'. A fresh assessment was made which was challenged in appeal before the Commissioner. The Commissioner deleted two additions made by the Assessing Officer, on account....
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.... the Assessing Officer was irrelevant and relevant materials having not been relied upon; which dictum is not applicable to the above case. 7. In Salauddin (supra) a works contractor with the main source of income from the contract awarded by the Railways and the Public Works Department, disclosed a total receipt slightly above that of the previous year. The Assessing Officer rejected the books of accounts and determined the net profit at the rate of 8% as against the net profit declared of 5.10% by the assessee; only slightly above the 5% declared for the preceding year. The assessee challenged the order before the Commissioner, who made a further addition on the basis of profit not disclosed. The Tribunal found that once the books of a....
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....the subject assessment year, came to Rs. 3,44,84,318/-; out of which, the liability in the previous year was Rs. 1,92,98,140/-. Hence the sundry credit claimed by the assessee came to Rs. 1,51,86,178/-. Obviously, this was not noticed by the Assessing Officer and presumably the same was not accounted in the total receipts, as undisclosed income. If the sundry credits are not explained properly, then disclosing that in the books of accounts would amount to a device employed to suppress the income received, as a credit taken by a third party, with whom the assessee had a transaction. 10. In the present case, the assessee was a works contractor as is disclosed from Annexure-2 order under Section 263 of 'the Act', who had executed contracts ....