2014 (4) TMI 855 - HC - Income Tax

Appeal u/s 260A of the Act - Assessment of individual income - Civil construction work Production of adequate evidences - Held that - Tribunal was rightly of the view that it would be appropriate and reasonable to assess the income by estimating net profit of 10% of the gross contract - the Tribunal have exercised their discretion and jurisdiction in the matter of permitting the assessee to adduce additional evidence in accordance to the requirement to the statutory rules i.e. under rule 46(A) of the Act and have adopted the reasonable approach and based on the documents and additional evidence filed particularly work order and the payments after deduction of TDS came to the conclusion thus, the findings are neither perverse, illegal nor contrary to law warranting reconsideration now in this proceedings u/s 260A of the Act there is no need to interfere in the order of the Tribunal Decided against Revenue.

Summary

Issues:
Appeal under Section 260A of the Income Tax Act, 1961 challenging orders of Commissioner of Income Tax (Appeal) and the Appellate Tribunal regarding assessment of individual income for the assessment year 2008-09.

Analysis:
The respondent, engaged in civil construction work, filed a return of income for Rs. 1704329/- for the assessment year 2008-09. The Assessing Officer added Rs. 34086575/- to the individual income of the respondent as no adequate evidence was produced regarding income from contractorship business. Penalty was imposed due to lack of evidence. However, during the appeal, the respondent submitted additional evidence under Rule 46A, including work orders, invoices, and payment slips related to construction work for various companies. The Commissioner of Income Tax (Appeals) found the evidence sufficient to establish that the appellant received work orders and payments after TDS deduction. Based on this, the Commissioner estimated the net profit at 10% of the gross contract income, a decision upheld by the Income Tax Appellate Tribunal.

The appellant's counsel argued that the Assessing Officer was correct in assessing the entire income from the contract work due to the lack of initial evidence. However, the High Court held that the appellate authorities properly allowed the submission of additional evidence as per Rule 46(A) and made a reasonable decision based on the documents provided. The High Court found the concurrent findings of the Commissioner of Income Tax (Appeals) and the Tribunal to be reasonable, not perverse, illegal, or contrary to law. Therefore, the appeal was dismissed as there was no justification for interfering with the decisions made by the lower authorities.