9911796707
TMI Blog2022 (8) TMI 1562X X X X Extracts X X X X X X X X Extracts X X X X ..... e available material on record under the facts and circumstances of the case. In the present case, the disallowance resulted into profit @ 40% of the contract receipts which is very unreasonable. When the matter carried on appeal before the ld. CIT(A), one of the courses available before the CIT (A) is rejecting the book results, estimating the profits. This action of the ld. CIT (A) is not under challenge before us. Therefore, in our considered opinion, the ld. CIT (A) had rightly exercised one of the possible course of action available before him, when the additions were made by the Assessing Officer are arbitrary, unreasonable etc. Decided against revenue. Estimation of profit @ 10% of gross receipts from execution of civil contracts - a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses Amount 1 Site expenses 6,80,68,090/- 2 Tender expenses 15,51,476/- 3 Bank charges 7,49,699/- 4 Others 5,77,972/- Total 7,09,47,237/- 3. Being aggrieved by the above disallowances, an appeal was preferred before the ld. CIT(A), who vide impugned order held that the assessed income resulted @ 40% of the turnover which is impossible and had proceeded to estimate the income @ 10% of the turnover by rejecting the book results. 4. Being aggrieved by the decision of the ld. CIT(A), the Revenue is in appeal before us in the present appeal contending that the ld. CIT (A) ought not to have resorted to estimation of the profits, when the Assessing Officer had made a disallowance of the expenditure. The assessee filed the Cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the assessee was busy in preparing the books of accounts. He also submits that the assessment order was passed without giving sufficient opportunity. Thus, it was contended that the assessment order was passed in gross violation of principles of natural justice. 8. We heard the rival submissions and perused the material on record. The issue in the present ground of appeal relates to the validity of rejection of book results by the ld. CIT(A). The Assessing Officer made addition of Rs. 7,09,47,237/- by disallowing the expenditure as the assessee had failed to comply with the notices issued u/s 143(2) of the Act by resorting to best of judgement assessment. It is settled position of law that the Assessing Officer while making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of gross receipts are as under :- A.Y. Turnover N.P.% 2012-13 6,03,33,786 6.73% 2013-14 11,41,17,805 3.64% However, during the year under consideration, most of the works were executed through sub-contracts. Thus, it is submitted that estimation of profit @ 10% excessive and unreasonable and profit may be estimated at reasonable percentage. 11. On the other hand, ld. CIT-DR has not controverted the submissions made on behalf of the ld. AR. 12. In these circumstances, we are of the considered opinion that in order to meet the ends of justice, we direct the Assessing Officer to estimate the profit @ 5% of the contract gross receipts. Accordingly, the Cross Objection stands partly allowed. 13. In the result, the Cross Object filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
