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TMI Blog2024 (7) TMI 1607X X X X Extracts X X X X X X X X Extracts X X X X ..... rks.
AR has submitted that the assessee is not in civil contract business and section 44AD is not applicable as turnover of the assessee is more than 4 Crores.
AR has also submitted that in similar line of business, the profit margin is 3.5%. We have gone through the assessment order, CIT (A) order, and comparable cases. Considering the turnover and the nature of business, in our opinion 5% of turnover will be reasonable estimate for estimating the income of assessee. Appeals filed by the assessee are partly allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as under: "It is settled law that there is certain degree of guess work in best judgment assessment as held by Hon'ble Madhya Pradesh High Court in the case of Ganga Prasad Sharma vs. CIT 127 ITR 27 (MP). Therefore, considering the nature of work, surrounding facts of the case as well as on the basis of materials available on record, l apply a fair and reasonable net income ratio @8%, on total contract receipts of Rs. 5, 13, 96, 081 taking into account comparative net income in contract works. Therefore, the net, income for considered as 8% of total contractual Receipts which comes to Rs. 41, 11, 686/- which is hereby considered as the total income for the year under consideration resulting an addition of Rs. 30, 64 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following details at around 3.5% as under and the same may be adopted for estimation: Assessment years Gross Receipts (Rs.) Net Profit (%) 2014-15 3, 60, 65, 421/- 3.36 2015-16 3, 33, 58, 747/- 3.33 2016-17 3, 09, 65, 453/- 3.31 2017-18 3, 41, 76, 802/- 3.61 8. The Ld. DR has supported the orders of lower authorities and prayed to confirm the addition. 9. We have heard the rival contentions, and perused the materials available on record. Admittedly, the assessee does not maintain any books of accounts and has filed return of income @ 1.5% gross turnover. The A.O has taken 8% of the contract receipts estimated @ 8% of gross receipts citing the case of Ganga Prasad Sharma Vs. CIT 127 ITR 27 (MP) that there is a certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in restoring the order of the Commissioner of Income Tax (Appeals) and thereby set aside the order of the Tribunal. 11. Consequently, while partly allowing the appeals filed by the assessee, the Order of the Income Tax Appellate Tribunal is set aside and the order of the Commissioner of Income Tax (Appeals) is restored in fixing the income of the assessee at 5% on the gross turnover. " 10. In view of the above, the A.O is accordingly directed to estimate the income @ 5% of the turnover as under: Assessment Years Credits in the bank account 2014-15 Rs. 6, 97, 87, 399/- 2015-16 Rs. 9, 00, 21, 597/- 2017-18 Rs. 11, 32, 21, 776/- Assessment Year 2016-17: 11. The A.O on identical facts has made the addition on contract recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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