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TMI Blog2022 (3) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee s books of accounts could be made particularly since the net profit was uniformly applied at 8% as an estimation. Adjust the TDS or refund back the same even though the said amount was deposited during the assessment year 2005-06 - HELD THAT:- CIT (A) directed the AO to withdraw the credit given for TDS . The ITAT while agreeing with the finding of the CIT (A) ought to have been to permit the Assessee to adjust the amount so paid or ordered it to be refunded to the Assessee. There is no explanation why this was not done. Learned counsel for the Department also could not support the above failure of the CIT(A) as well as the ITAT to issue such a direction. Question (ii) is also answered in the negative i.e. in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that separate addition on account introduction of un-explained partner s opening capital in the assessee s books of accounts can be made once the net profit rate is applied on contract receipts of the appellant for estimating its income from contract work when the provisions of section 68 is directly hit in the instant case? (ii) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in not giving any direction to the Income Tax Department to adjust the TDS or refund back the same even though the said amount was deposited during the assessment year 2005-06? (iii) Whether, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngg. Co. (2008) 302 ITR 246 (P H). 6. The impugned order of the ITAT discusses the findings of the CIT(A) regarding estimation of the net profit at 8%. The ITAT has, in fact, upheld the order of the CIT(A). If that is indeed the position, the question of adding the further sum as unexplained credit was not sustainable particularly in view of the decision of the Punjab Haryana High Court in Commissioner of Income Tax v. Aggarwal Engg. Co. (supra). A perusal of the said decision reveals that the Punjab Haryana High Court decided to follow the decision of the Allahabad High Court in CIT v. Banwari Lal Banshidhar (1998) 229 ITR 229 where it was held as under: When the gross profit rate is applied, that would take care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant assessee and against the Department by holding that the ITAT and the CIT(A) were not tried in failing to give a direction to adjust the TDS amount or refunded although the said amount to be deposited in AY 2005-06. Question No.(iii) 10. The proviso to Section 44AD (2), as it read at the relevant time, did permit the salary and interest paid to the partners of a firm to be deducted from income of the firm subject to the condition specified under Section 40(d) of the Act being fulfilled. This appears to have been lost sight of by the ITAT. Accordingly, question (iii) is also answered in the negative i.e., in favour of the Appellant assessee and against the Department by holding that the ITAT erred in law in not allowing de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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