HARI MOHAN ,GUJRAT V. DCIT-3, MATHURA

ITA 362/AGR/2018

AI Insights

The case involves Shri Hari Mohan, a civil contractor, who appealed against the orders of the Commissioner of Income Tax (Appeals), Agra, for the Assessment Year 2012-13. The primary contention was regarding the estimation of income by the AO under section 144 of the Income Tax Act, which was initially set at 12% of gross receipts due to unsatisfactory responses from the assessee. The assessee argued that the net profit rates for the years 2010-11, 2011-12, and 2012-13 were significantly lower than the estimated rate. Upon reopening of the case, the AO estimated income again at 12% on revised gross receipts, which included work-in-progress. The Tribunal found the higher estimation unjustified and reduced the presumptive income rate to 6.5%, citing the provisions of section 44AD of the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126461 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHAILENDER SHRIVASTAVA LD
• Assessee Lawyers: ANURAG SINHA; LD
• Keywords: TDS; Presumptive income; Commissioner; Commissioner of Income Tax
• Section: 144; 44AD

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM 1. आयकरअपीलसं./ ITA No. 362/Agr/2018 (िनधा \u0012रणवष\u0012 / Assessment Year:2012-13) And 2. आयकरअपीलसं./ ITA No. 363/Agr/2018 (िनधा \u0012रणवष\u0012 / Assessment Year:2012-13) Shri Hari Mohan 82, Chitrakut Apartments, Near Bapu Dargah, Gorwa, Vadodara, Gujrat. बनाम/ Vs. DCIT-3, Mathura. \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. AHPPM-5638-N (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Sh. Anurag Sinha, Adv. – Ld. AR थ कीओरसे/Respondent by : Sh. Shailender Shrivastava – Ld. DR सुनवाईकीतारीख/Date of Hearing : 20-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by assessee for Assessment Year (AY) 2012-13 arises out of separate orders of first appellate authority. First, we take up appeal ITA No.363/Agr/2018 which arises out of an order passed by learned Commissioner of Income Tax (Appeals), Agra [CIT(A)] on 28-02- 2018 in the matter of an assessment framed by Ld. AO u/s 144 on 04-03- 2015. Having heard rival submissions, our adjudication would be as under. 2. From case records, it emerges that the assessee is a civil contractor and it filed returned income of Rs.16.52 Lacs. The assessee 2 reflected profit of Rs.15.06 Lacs against gross receipts of Rs.301.05 Lacs. In the absence of any satisfactory response from the assessee, Ld.AO estimated income of 12% and made addition of Rs.21.06 Lacs on best judgement basis. During first appeal, the assessee tabulated that its Net profit for AYs 2010-11, 2011-12 and 2012-13 was 1.03%, 4.74% and 5% and accordingly, assailed impugned estimation. However, Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. 3. Subsequently, the case of the assessee was reopened by Ld. AO on the ground that actual contractual receipts were Rs.540.32 Lacs. The assessee stated that receipts include closing work-in-progress whereas contractor had shown this amount as work done and deducted TDS on the same. The Ld. AO, in para-6, concurred with the said submissions but again ended up making estimation of 12% on gross receipts of Rs.540.32 Lacs. The Ld. CIT confirmed the same against which the assessee is in further appeal before us vide ITA No.362/Agr/2018. 4. Upon perusal of factual matrix, it could be seen that though the assessee is having high turnover, it has failed to furnish books of accounts before lower authorities in any of the proceedings. It is another fact that the assessee’s net profit rate in this year is much better than the profit rate reflected in earlier years. Considering this fact, higher estimation of 12% is not justified since 44AD itself provide for presumptive income of 8%. Considering the facts of the case, we direct Ld. AO to estimate the income @6.5% of turnover as declared by the assessee. The Ld. AO has concurred that assessee’s receipts include WIP though TDS on contractual payments had been deducted by 3 contractor. Therefore, we direct Ld. AO to accept the turnover as declared by the assessee and recompute the income of the assessee. 5. Both the appeals stand partly allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) 8ा ियक सद9 /JUDICIAL MEMBER लेखा सद9 /ACCOUNTANT MEMBER Dated: 22.04.2025 आदेश की ;ितिलिप अ=ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु1/CIT 4. िवभागीय ितिनिध/DR 5. गाड7फाईल/GF ASSISTANT REGISTRAR ITAT AGRA "