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ITAT deleted addition of 1% of NP and disallowed expenses at Rs 2 lakhs
ITAT deleted addition of 1% of NP and disallowed expenses at Rs 2 lakhs
Assessee filed his return of income. Assessment was completed u/s 144 (of Income Tax Act, 1961). AO made additions of 1% NP from retail business of petroleum products, 8 % of income from civil contract business etc. CIT(A) only confirmed addition on income from civil contract business. ITAT deleted addition of 1% of NP which was on higher side, and disallowed expenses at Rs 2 lakhs instead of estimation of income @8% from contract receipts.-500679
1. Assessee filed his return of income showing a total income of Rs. 24,80,601 and agricultural income of Rs. 2,90,000.
2. The assessment was completed u/s 144 (of Income Tax Act, 1961) on a total income of Rs. 41,72,990.
3. AO made additions with regard to retail business of petroleum products; agricultural income; claim u/s 80C (of Income Tax Act, 1961); interest payment on housing loan; and estimation of income of the assessee from civil contract business.
4. CIT(A) only confirmed the addition with respect to estimation of income of the assessee from civil contract business.
The ITAT held as under:
5. Looking to these facts the application of 1 % N.P. on retail business of petroleum product against declared 0.61 % by assessee can not be said justified, specifically the N.P. rate declared in higher side as compared to immediately preceding year.
6. Thus the action of A.O. is considered against the facts available on record and same is hereby not approved.
7. Looking to the facts of the case, trading addition to some extent in declared income from contract receipts is called for.
8. However looking to the net profit declared 5.01 % in assessment year under consideration and 5.45% in preceding assessment year 2009- 10, it would be fair and reasonable to meet ends of justice to make the disallowances out of direct and indirect expenses claimed and shown in trading.-cum- P&L account at Rs. 2,00,000 instead of application of estimation of income from contract receipts at 8% made by A.O.
9. Thus assessee gets relief of Rs. 11,32,711.
Case Reference - Deputy Commissioner of Income Tax Vs. Shri Umesh Vikram Singh.
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCHES: "B" LUCKNOW
BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
ITA No: 236/LKW/2014
(AY: - 2010-11)
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