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| The Tax Publishers2020 TaxPub(DT) 3609 (Guj-HC) INCOME TAX ACT, 1961
Section 148
Where AO in assessment order had not discussed anything or rather, was not able to justify in any manner the addition to the total income being 25% of the total receipts as the business profit of the assessee for the year and AO wrongly determined the profit at the rate of 25%, without any basis or credible material, therefore, appeal preferred by the Revenue was dismissed.
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Reassessment - Estimation of income @ 25% - Advances received from its customers -
Original assessment under section 143(3) was completed and thereafter, the case came to be reopened under section 147 by issue of a notice under Section 148. The objections raised by assessee as regards the re-opening came to be overruled. Assessment under section 143(3) read with section 147 came to be completed after making addition on account of business profit estimated at the rate of 25% of the total receipts on account of the disallowance under section 40A(3). Held: AO in the assessment order had not discussed anything or rather has not been able to justify in any manner the addition to the total income being 25% of the total receipts as the business profit of the assessee for the year. No reason worth the name was assigned by AO in this regard. AO wrongly determined the profit at the rate of 25%, without any basis or credible material. Tribunal ultimately concurred with findings recorded by CIT(A) and dismissed the appeal preferred by Revenue.
Relied:Samruddhi Corporation v. DCIT [ITA No.3035/AHD/2016, ITA No.3390/AHD/2016, dt. 17-7-2019] Param Anand Builders Private Ltd. v. ITO (1996) 59 ITD 29 (Mum) : 1996 TaxPub(DT) 1045 (Mum-Trib)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2009-10
IN THE GUJARAT HIGH COURT
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