2010 (5) TMI 951 - AT - Income Tax

Summary

Issues Involved: Appeal against CIT (A) order for assessment year 2005-06.

Determination of Profit on Contract Receipt and Treatment of Income:
The Assessing Officer determined profit at 8% on contract receipt of Rs. 5 lakhs and treated Rs. 92,510 as income from other sources instead of agriculture income declared by the assessee. The CIT (A) upheld these actions noting that the contract receipts were separate from the main business and that the assessee failed to prove the agricultural income. The CIT (A) used Section 44AD as a guiding force to determine the correct rate of profit on the contract receipt. The Tribunal found that the lower authorities did not properly consider the audited accounts filed by the assessee and directed the matter to be restored to the Assessing Officer for fresh consideration. The Assessing Officer was instructed to give the assessee another opportunity to substantiate the agricultural income claim, in accordance with the law. The appeal was allowed for statistical purposes.

Conclusion:
The Tribunal allowed the appeal for statistical purposes and directed the matter to be reconsidered by the Assessing Officer to provide the assessee with another opportunity to substantiate the agricultural income claim, in accordance with the law.