TaxTMI 
TaxTMI 
2025 (11) TMI 901
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....andis to the other two appeals in ITA Nos. 923 & 925/Bang/2025. Grounds raised by assessee in ITA No. 924/Bang/2025 "1. The order passed by the learned Principal Commissioner of Income Tax, Bengaluru-3, passed under section 263 of the Act is so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. The notice issued for initiation of proceedings under section 263 of the Act is bad in law. 3. The learned PCIT is not justified in law in invoking the jurisdiction under section 263 of the Act and setting aside the order of the learned assessing officer as being "erroneous and prejudicial to the interest of the revenue". 4. The learned PCIT is not justified in law in holding that the order passed by the assessing officer is bad in law, without appreciating that there was no error in the orders passed, much less prejudicial to the interest of revenue, on the facts and circumstances of the case. 5. The learned PCIT failed to appreciate that the provisions of section 263 of the Act shall be attracted only when the order is both erroneous and prejudicial ....
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....021. In the reply the assessee explained about the deductions from "Income from other sources" and furnished the details about the contract receipts. Thereafter the AO issued a notice u/s. 142(1) of the Act and several queries were raised including about the Form ITR 2. The assessee filed their detailed reply on 07/12/2021. In the said reply, the assessee submitted that he was not maintaining any books of accounts and therefore out of the total contract receipts, he had estimated his income at 6% but wrongly shown the same as income from other sources. The assessee also submitted that all the contract receipts are only through banking channels and requested to assess the same under the head business income. The assessee also brought to the notice of the AO that the similar estimation of income for the A.Y. 2019-20 was accepted by the CPC while processing the return u/s. 143(1) of the Act. 5. Again the AO issued a notice u/s. 142(1) of the Act and sought for the details about the reconciliation of 26AS with receipts and also sought for the copies of the GST returns. The AO also sought for the reason for filing non business ITR and also about the large deduction claimed u/s. 57 wi....
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.... 07/12/2021 and thereafter the AO had accepted the return of income filed. The assessee also submitted that the AO conducted proper enquiry and considered each and every points before passing the assessment order. The assessee also submitted that he has not declared his income u/s. 44AD of the Act and estimated his income from contract receipts at 6% based on the rate prescribed under that section and therefore the expenditure has been rightly claimed and allowed by the AO. 7. The Ld.PCIT had not accepted the explanations and confirmed his proposals for the following reasons: 1) The estimation of income u/s. 44AD is not applicable to income from other sources 2) Assessee had not maintained regular books 3) AO should have rejected the method of estimation and make a best judgment assessment. 4) AO should have atleast estimated the correct income at 8%. 8. Therefore the Ld.PCIT had arrived a conclusion that the order of the AO is erroneous and prejudicial to the interest of revenue and set aside the assessment order and directed the AO to verify the expenditure claimed and compute the total income of the assessee for A.Y. 2020-21. 9. As ag....
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....o reflected in Form 26AS. The assessee estimated the income at 6% of the contract receipts and declared the same as income from other sources. In the computation of income, the assessee also declared the income received from contract works and shown the same as income from other sources. In Schedule 4, the details of the contract receipts and the expenses were shown. 14. The return was processed and the AO had issued notices u/s. 143(2) and 142(1) of the Act since the assessee had filed non-business return and to verify the genuineness of the expenses deducted u/s. 57 of the Act. In the paper book filed, the copies of the notices and the replies filed by the assessee has been enclosed. From the said reply, we find that the assessee had given proper explanations to the various queries raised by the AO and explained the reason why he has filed ITR 2 instead of ITR 4. We find that the assessee had duly reported the total contract receipts and the reason for the estimation of profit at 6%. The AO considers the details and satisfied himself that the assessee had reported the income based on estimation and not reported the income u/s. 44AD of the Act. Therefore the AO had accepted the....