2025 (11) TMI 1850

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....der 03/03/2025. The impugned order emanated from the order of the National Faceless Assessment Centre, Delhi (for brevity, 'Ld.AO') passed u/s 147 r.w.s. 144B of the Act, date of order 30/03/2022. 2. The brief facts of the case is that the assessee is engaged in the business of civil construction and declared its revised income for the impugned assessment year amount to Rs. 40,01,190/- filed on dated 25/02/2014. The income was assessed at Rs. 2,74,23,670/- u/s 143(3) r.w.s. 144 of the Act on 28/03/2016 wherein the Ld.AO making disallowance of expenses applied section 44AD and arrived at a deemed net profit amount to Rs. 1,33,63,668/- which is @8% of the gross receipts amount to Rs. 16,70,45,850/-. The aggrieved assessee filed an appeal b....

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....facility the element of the profit should reasonably earnedis fixed @8% of the turnover, carried outby an assessee. Keeping in view of the above provisions and the fact in the instant case the assessee has not furnished any supporting evidence in support of the expenditure, claimed in the P&L account. Therefore, in such a situation it is fit case to invoke the provision of section 44AD of the I.T. Act to determine the income of the assessee. In view of the shove facts and the details available on record, it stashed that assessee fails to represent himself as well as furnish details called for till the date. Accordingly, book results of the assessee is rejected and the net profit of the assessee is calculated 8% of the tota....

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....despite the fact that the assessee did not appear despite receipt of notice and the AO had made full disallowance in respect of other aspects, full disallowance of expenditure in Pål was not made and section 44AD was wrongly applied. The Pid. expenses being Rs,14,46,17,516 (Direct expenses) and Rs. 1,97,23,865 (Indirect expenses) the total disallowance should have been sum of the two Le. Rs. 16,43,41,381 instead of just Rs. 1,33,63,668. One more remarkable fact is worth mentioning here that in the details of expenses, the assessee showed material expense for the year at Rs. 54,22,540 whereas the labour and wages expenses was shown at Rs. 12,35,51,003 which did not appear to be believable as in a construction business with such a low v....