2017 (12) TMI 1530 - HC - Income Tax

Addition applying a net profit @ 8% in the case of an assessee engaged in the business of civil construction work - Held that - Tribunal has recorded concurrent findings of fact after appreciation of the material on record and has based its conclusions thereon. Under the circumstances, the impugned order being based upon concurrent findings of fact recorded by the Tribunal, does not give rise to any question of law, much less, a substantial question of law, so as to warrant interference.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal regarding addition made by Assessing Officer based on net profit rate in civil construction business.

Analysis:
1. The appellant-revenue challenged the Income Tax Appellate Tribunal's order dated 12.5.2017, proposing a substantial question of law regarding the correctness of deleting the addition made by the Assessing Officer in a civil construction business.
2. The assessment year in question was 2007-08, with the relevant accounting period being the financial year 2006-07.
3. The Assessing Officer observed discrepancies in the expenses declared by the assessee, such as carting/labour expenses, sales tax expenses, and truck/car repairing expenses, due to lack of proper documentation. Consequently, the Assessing Officer estimated the net profit at 8% of the total receipt, leading to a higher assessment.
4. The Commissioner (Appeals) disagreed with the Assessing Officer's approach, stating that since the books of accounts were not rejected, there was no basis for estimating the net profit. The Tribunal upheld this decision.
5. Mrs. Mauna Bhatt, representing the appellant, argued against the Tribunal's decision by reiterating the Assessing Officer's reasoning.
6. The Commissioner (Appeals) found that necessary details were indeed furnished during the assessment proceedings, contradicting the Assessing Officer's claim of lack of documentation. The Tribunal agreed with these findings and conclusions.
7. The Tribunal's order was based on concurrent findings of fact and material on record, leading to the dismissal of the appeal due to the absence of any substantial question of law warranting interference.

This detailed analysis highlights the key issues raised in the legal judgment, covering the challenges faced by the appellant-revenue regarding the addition made by the Assessing Officer and the subsequent decisions by the Commissioner (Appeals) and the Tribunal based on the evidence and findings presented during the assessment proceedings.