TaxTMI 
TaxTMI 
2025 (6) TMI 36
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.... limit of 60 days to file the cross objections expired on 04.06.2024. Thus, there was a delay of 175 days only in filing the cross objections. As regarding the reason for delay, the assessee has explained that he is a senior citizen, 85 years of old, and was suffering from various old age-related health issues. Further, the assessee was hospitalized during the period from 15.06.2023 to 21.06.2023. As the recovery of the assessee took considerable time, he could not consult his counsel in time which led to delay in filing of the CO. We have considered the explanation of the assessee. The assessee was hospitalized only after the time limit of 60 days to file the COs had expired and no explanation has been offered as to why the COs could not be filed within the normal limitation period. Though, we are not fully convinced with the reason for delay, it is found that the ground on which the CO has been filed by the assessee, is also contested by the Revenue in all the three years and it will be relevant to consider the explanation of the assessee while adjudicating those grounds. Therefore, the delay in filing the cross objections by the assessee is condoned. 3. As the issues involved i....
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....nt." 7. Succinctly, the facts of the case are that a search and seizure action was conducted u/s 132 of the Income Tax Act, 1961 (in short 'the Act') in the case of Dharmadev Group on 15.10.2013 and the premises of the assessee was also covered in the search operation. The assessee had filed his return of income for A.Y. 2012-13 belatedly, after the search action, on 31.10.2013 declaring total income of Rs. 11,26,910/-. Since, the return was filed for the first time after the date of search, this was a case of abated assessment. In response to notice u/s. 153A of the Act, the assessee had filed return on 07.10.2014 declaring the same income of Rs. 11,26,910/-. The assessee is a builder and contractor and was engaged in undertaking various projects under his proprietary concerns. In the course of assessment, the AO found that the assessee had shown addition of Rs. 31,88,001/- to the capital account of his proprietorship concern Neelkanth Builders. Similarly, there were additions to capital account of other proprietorship concerns viz. M/s. Harikrupa Builders and Swaminarayan Developers. In addition, unsecured loans were also taken in the various proprietorship concerns. In ....
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....the AO. However, he was not correct in reducing the estimation of income as made by the AO from 20% to 10% without any basis. 11. Per contra, Shri Vivek Chavda, Ld. AR of the assessee submitted that the addition made by the AO was without any application of mind and, therefore, the Ld. CIT(A) had rightly allowed the relief. He submitted that the AO had not only made addition for entire contract receipt of Rs. 3,45,46,640/- but also made addition of profit on the contract receipts @ 20%, which resulted into double addition. According to the Ld. AR, both the additions could not have been made by the AO. He, therefore, strongly supported the decision of the ld. CIT(A) deleting the addition of Rs. 3,45,46,640/-, which was based on incorrect appreciation of facts of the case. With respect to admission of additional evidences by the ld. CIT(A) without allowing any opportunity to the AO, the ld. AR submitted that the matter may be set aside to the file of ld. CIT(A) and not to the AO. 12. As regarding addition on account of estimation of net profit, the Ld. AR submitted that the action of the Ld. CIT(A) in restricting the addition to 10% of the contract receipt was not correct. He submi....
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....uest of the assessee is to set aside the matter to the file of the Ld. CIT(A) while the Revenue has requested to set aside the matter to the AO. Since, the default of admitting additional evidence without allowing any opportunity to the AO, has been committed by the ld. CIT(A), we deem it proper to set aside the matter to the file of the first appellate authority. The ld. CIT(A) is directed to obtain a remand report of the AO on the additional evidences filed by the assessee in the course of appeal proceeding and thereafter re-adjudicate this issue. In the result, the ground no .- 1 taken by the Revenue is allowed for statistical purposes. 14. The second ground taken by the Revenue is against restricting the addition of profit on sale of flats/plots from 20% to 10%. Further, all the grounds taken by the assessee in the cross objection, pertain to this addition only. The assessee had disclosed net profit @3% of the booking receipts. It was explained by the assessee that this percentage was based on his long-term experience of more than 20 years in the business of construction activities. The working of the profit by the assessee at a pre-conceived rate of 3% of the booking receipts....
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....her, the appellant has shown 3% of the purported receipts as profit of the businesses which is arbitrary and whimsical and the rationale provided that why it chose 3% as the net profit rate for each of the project is unacceptable as it has no basis at all. It seems to be just the sweet will of the appellant to show 3% as net profit for each of the project. There is no method applied here. Therefore, I uphold the action of the AO to reject the book results as they are incomplete and incorrect. " 15. We do not find anything wrong with the order of ld. CIT(A) upholding the rejection of books of accounts of the assessee by the AO. When the books of accounts are rejected, the profit has to be worked out on estimate basis. The AO had applied a rate of 20% to work out the net profit out of the gross booking receipts. However, the AO didn't give any reason or any basis for application of this rate. On the other hand, the Ld. CIT(A) had restricted the addition @10% of the contract receipts. The presumptive rate of tax as stipulated u/s.44AB of the Act is 8%. Therefore, the net profit rate of 10%, as applied by the Ld. CIT(A), is found to be reasonable. The decision of the ld. CIT(A) on....