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2020 (3) TMI 282 - AT - Income TaxRevision u/s 263 - Estimation of profit - HELD THAT - Since the income were assessed on estimated basis separate additions of Rs. 20 Lacs over and above the assessed income was uncalled for. Both the lower authorities were bound to follow the same. We find that Ld.CIT(A) at para 4.1 of the impugned order has correctly ascertained assessee s income at Rs. 1, 87, 524/- which was in consonance with the directions of Tribunal order 2015 (9) TMI 1680 - ITAT AHMEDABAD . The said computation comprised-off of estimated income @3% other income as per financial statements and disallowance u/s 40A(3). Against the same deduction of interest and remuneration to partner s have been allowed. The same is in consonance with the case history. Therefore on the facts and circumstances of the case we direct Ld. AO to adopt the income at Rs. 1, 87, 524/- and recompute assessee s tax liability. The appeal stands partly allowed. For AY 2007-08 we find that the approach of Ld.CIT(A) in this year was substantially correct. As per the Tribunal s order dated 18/09/2015 the income was to be reduced by Rs. 25 Lacs. However the observation that deduction of interest of Rs. 5 Lacs was not claimed by the assessee is not correct since upon perusal of financial statements as placed on record it is quite discernible that that assessee has claimed deduction of interest of Rs. 5 Lacs. Therefore there would be no occasion to issue the stated directions to Ld. AO. In nutshell the assessee s income would be taken as Rs. 7, 11, 694/- being differential of Rs. 32, 11, 694/- and Rs. 25, 00, 000/-. The appeal stands partly allowed.
Issues involved:
1. Assessment Year 2006-07: Discrepancies in assessing the total income and rectification application. 2. Assessment Year 2007-08: Errors in determining income and rectification application. Assessment Year 2006-07: Detailed Analysis: - The assessee contested the order of the Commissioner of Income-Tax (Appeals) for AY 2006-07. - The original return of income was filed at Rs. 11.35 Lacs after a survey action revealed an admission of Rs. 20 Lacs. - An assessment was framed determining income at Rs. 15.93 Lacs, rejecting the books of accounts and estimating profit at 3% of turnover. - The CIT(A) enhanced the income by Rs. 11.33 Lacs, comprising other income and business income. - The Tribunal held that further addition of the admitted income was unnecessary when profits were estimated. - The order was revised under section 263, leading to multiple rectification applications and revised income figures. - The Tribunal directed the AO to adopt the income at Rs. 1,87,524 in line with the previous order, partly allowing the appeal. Assessment Year 2007-08: Detailed Analysis: - The facts were similar to the previous year, with the income estimated at Rs. 29.06 Lacs by the AO. - The CIT(A) reduced the estimation to 3% of turnover and added other income, modifying the income to Rs. 32,11,694. - The AO erroneously provided relief of Rs. 8.91 Lacs, leading to rectification applications and further modifications. - The Tribunal directed a reduction of Rs. 25 Lacs in income, but the CIT(A) incorrectly observed that interest deduction was not claimed. - Upon review, the Tribunal found the CIT(A)'s approach substantially correct, and the income was determined at Rs. 7,11,694. - Both appeals were partly allowed, with the orders pronounced on 04/03/2020. This detailed analysis covers the discrepancies, rectification applications, Tribunal directions, and final income determinations for both Assessment Years 2006-07 and 2007-08.
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