TaxTMI 
TaxTMI 
2024 (8) TMI 1575
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....trary estimation of income; estimation of income must be fair & reasonable and based on some valid basis in the line of business of the assessee; addition sustained in unjustified & is liable to be deleted. 2. On the facts & circumstances of the case and in law, Id CIT(A) has erred in not giving effect of NP shown of 3.20% (i.e. Rs. 8,02,179) in the ROI filed/ books of account; such NP shown of 3.20% on 'gross receipts' of Rs. 2,50,92,374 is liable to be considered & must be taken into account & thus, to that extent, the addition is liable to be deleted. 3. On the facts & circumstances of the case and in law, Id CIT(A) has erred in sustaining addition of Rs. 30,11,085/- by making NP estimation of 12% on 'gross freight receipts' of Rs. 2,50,92,374 (i.e., audited u/s 44AB) without considering/taking into account depreciation of claimed in the P&L account (i.e., 4.07% of the gross receipts) & must be taken into account & thus, to that extent, the addition is liable to be deleted. 4. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing. 3. The brief facts of the case culled out fro....
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.... assessee/transporter etc. Therefore, the bills related to freight paid furnished by the assessee did not appear to be genuine in absence of supportive documents. Therefore, the assessee was given a final opportunity by the AO to furnish his reply. In response to the Show Cause Notice issued on 13.04.2021, the assessee furnished his reply on 07.08.2021 stating that the assessee has never carried out any business in the said period and has been a victim of fraud. The reply of the assessee did not find favour with the AO as no supporting evidences were filed by the assessee related to expenses incurred amounting to Rs. 2,03,49,958/-. In the absence of any supporting documents in relation to expenses amounting to the tune of Rs. 2,03,49,958/- was disallowed and added to the income of the assessee. 4. Aggrieved with the aforesaid additions, assessee preferred an appeal before the Ld. CIT(A), wherein the contentions raised by the assessee have deliberated, considering the facts available on record. In absence of any submission uploaded by the assessee in the ITBA portal, Ld. CIT(A) proceeded to decide the appeal on the basis of statement of facts filed along with Form 35. Ld. CIT(A) ....
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....d on 20.11.2007, recorded as under:- "The points raised in this appeal may be categorized into following three issues: (a) Whether, while applying net profit rate to the gross receipts, the assessee is entitled for deduction on account of depreciation allowance from such receipts? (b) Whether interest paid on the borrowed capital is to be deducted from gross receipts while applying net profit rate? (c) Whether the net profit rate of 10% applied by the ITAT in the present case is just and reasonable? Taking up the first point, the matter is no longer res integra. The Division Benches of this Court in Commissioner of Income Tax v. Chopra Bros. India (P) Limited [2001] 252 ITR 412 and Girdhari Lal v Commissioner of Income Tax ITR 318 while considering the aforesaid issue, in view of the circular issued by the Board, had held in a case where the assessee makes a specific claim for depreciation and gives the information as required under section 32 of the Act, the Assessing Officer is bound to take the claim of the assessee into consideration. Following the aforesaid judgments, it is held that the assessee is entitled to deduction on account ....
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..... The assessee bagged this contract from IRB Ltd., who was the main contractor of NHAI. The construction of the Highway was started during the year and work to the extent of Rs. 1 crore was executed during the period under construction. The assessee is a civil contractor and the total receipts amounting to Rs. 9,96,62,747/- were shown during the year under consideration thereby showing the rate of profit @ 4.61%. The AO took the net profit at Rs. 99,66,275/- after applying 10% rate to the total receipts. Against this the salary to partners was allowed and the net income was determined at Rs. 79,66,275/-. Against the said addition the assessee went in appeal before the Id. CIT (A) and the Id. CIT (A) applied a net profit at 7% on the gross receipts declared by the assessee. It was also held that the deprecation as claimed at Rs. 2,13,22,380/- may be allowed. While allowing the depreciation the ld. CIT (A) relied upon the decision of the Hon'ble Punjab & Haryana High Court in the case of Lali Construction Co. v. Asstt. CIT [2015] 229 Taxman 286/54 taxmann.com 68 in which, it was observed that the depreciation allowable from net profit even if the total income is computed by apply....
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....ein the presumptive taxation is on estimated net profit on 8%. It was the submission that, considering the business of assessee and high volume of turnover, it is obvious and can be inferred that the assessee was running his business below the prescribed rate u/s 44AD, therefore, the reasonable estimation of Net profit should have been done, further, the request to allow the eligible depreciation may kindly be directed, which is permissible under the provisions of section 32 of the Act. 7. We have considered the rival submission, pursued the material available on record and case laws relied upon by the Ld. AR. Admittedly, in the present case the issue of addition on account of bogus / unexplained expenses incurred by the assessee to the tune of Rs. 2,03,49,958/- was cropped up because the assessee was unable to substantiate such expenses before the Ld. AO by producing corroborative evidence and satisfactory replies. Ld. CIT(A) had deliberated on this issue on the basis of material available with him, he considered the prayer of the assessee and in the interest of justice he observed that when the total receipt of the assessee is not disturbed by the Ld. AO, it is imperative that....