|The Tax Publishers2020 TaxPub(DT) 5193 (Hyd-Trib)
INCOME TAX ACT, 1961
Estimation of income of civil contractor at 8% of gross receipts taking the cue from section 44AD is reasonable though the limit exceeds against income determined at 8.5% of gross receipts by the AO.
Assessment - Estimation of income - Case of Civil contractor -
Assessee was engaged in the business of execution of civil contracts. AO in the absence of bills and vouchers to support the expenditure claimed by the assessee, rejected the books of account and estimated the income of the assessee @8.5% of the gross bills and accordingly determined the total income on main contract works executed by assessee. Held: Estimation of income @8% is reasonable. Even though the assessee had the turnover over and above the limit of section 44AD, Tribunal in the case of Arihant Builders Developers v. Asstt. CIT [(2007) 291 ITR 49 (Ind-Trib) : 2007 TaxPub(DT) 771 (Ind-Trib)] held that estimation of income taking the cue from section 44AD is reasonable though the limit exceeds. Therefore, taking into consideration the submissions of the assessee and the lead from the orders relied on by the assessee, estimation of income @8% meets the need of justice.
Followed:Arihant Builders Developers v. Asstt. CIT [(2007) 291 ITR 49 (Ind-Trib) : 2007 TaxPub(DT) 771 (Ind-Trib)].
FAVOUR : Partly in favour of assessee.
IN THE ITAT, HYDERABAD BENCH
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