9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (5) TMI 1006 - AT - Income TaxEstimation of income at 8% on main contract receipts and at 6% on sub-contract receipts - HELD THAT - Respectfully following the order of the Tribunal in the case of Shri K. Ramakrishna Contractor (P) Ltd. 2009 (12) TMI 966 - ITAT HYDERABAD we are inclined to direct the Assessing Officer to estimate the income of the assessee at 8% on main contract receipts and at 5% of the sub-contract receipts as aforesaid. This ground is allowed partly. Levy of interest u/s. 234B and 234C - We have heard both the parties on this issue. In our opinion in view of the judgement of the Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Others 2001 (10) TMI 4 - SUPREME COURT levy of interest u/s. 234B and 234C is mandatory and consequential in nature. Accordingly this ground is dismissed. In the result both the appeals of the assessee are partly allowed
Issues Involved:
1. Estimation of income at specific percentages on main contract and sub-contract receipts. 2. Levy of interest u/s 234B and 234C of the Income-tax Act, 1961. Summary: Issue 1: Estimation of Income The assessee, engaged in civil construction, failed to substantiate various expenses during assessment proceedings. The Assessing Officer estimated the income at 12% of gross receipts. On appeal, the CIT(A) directed the income to be estimated at 8% on main contract receipts and 6% on sub-contract receipts. The assessee appealed to the Tribunal. The Tribunal referred to the case of Shri K. Ramakrishna Contractor (P) Ltd., where it was held that once the books of account are rejected, the taxing authority must determine the true profits based on available material. The Tribunal noted that in similar cases, a profit rate of 12.5% was applied. However, in the assessee's case for the assessment year 2003-04, the Tribunal had estimated the profit at 8% for own contracts and 5% for sub-contracts after allowing depreciation. The Tribunal concluded that the assessee could either follow the precedent set in its own case for the assessment year 2003-04, provided it gives up the claim of depreciation, or follow the decision in the case of M/s Krishna Mohan Construction Company. The Tribunal directed the Assessing Officer to estimate the income at 8% on main contract receipts and 5% on sub-contract receipts. This ground was partly allowed. Issue 2: Levy of Interest u/s 234B and 234CThe assessee contested the levy of interest u/s 234B and 234C, relying on the Full Bench judgement of the Patna High Court in the case of Smt. Tej Kumari & Ors. v. CIT. The Tribunal, however, referred to the Supreme Court judgement in the case of CIT v. Anjum M.H. Ghaswala and Others, which held that the levy of interest u/s 234B and 234C is mandatory and consequential. Accordingly, this ground was dismissed. Conclusion:Both appeals of the assessee were partly allowed, with the Tribunal directing the Assessing Officer to estimate the income at 8% on main contract receipts and 5% on sub-contract receipts, and dismissing the ground regarding the levy of interest u/s 234B and 234C. Order pronounced in the open court on 27th May, 2011.
|
