INCOME TAX ACT, 1961

Section 145

Accounting method - Estimation of profit at 6% - Assessee not maintaining books of account -

The case was selected for scrutiny under CASS and notices were issued to assessee. But, assessee did not appear and therefore, AO was constrained to complete the assessment ex parte under section 144. AO observed that the assessee had gross receipts and after claiming expenditure under different heads he admitted total income. AO observed that assessee had not furnished any information, bills, vouchers, etc., in support of his claim of expenses debited to P&L account. Therefore, AO treated the entire gross receipts as assessee's income and brought it to tax. Assessee submitted that he was not maintaining books of account and claimed that profit in this line of business is 6% on own contracts. CIT(A) accepted assessee's contentions, but held 7% of gross receipts to be reasonable profit percentage. Held: CIT(A) without examining the profit percentage in the years before the assessment year 2012-13 and without giving any reasons had estimated the profit percentage at 7% of gross receipts. In view of the same, it would be deemed fit and proper to remand the issue back to AO with a direction to re-consider the issue and accordingly estimate the income de novo.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2012-13

SUBSCRIBE FOR FULL CONTENT