BANKULA JAGA RAO REDDY,GANJAM vs. ITO, NEW DELHI

It was submitted by the ld. AR that the assessee is engaged in the business of commission agent for prawn seeds. It was the submission that the assessment year 2015-2016 was the first year of the assessee’s business. It was the submission that the return filed by the assessee came to be processed and the assessment came to be completed u/s.143(3) of the Act originally on 28.04.2017 accepting the returned income. The return of the assessee was the subject matter of revision u/s.263 of the Act by the Pr.CIT and vide an order dated 17.03.2020, the ld. Pr.CIT set aside the assessment to the file of AO with a direction to redo the assessment in regard to two issues, being one the profit of the assessee and secondly to bring to tax the interest from bank accounts which had not been offered to tax by the assessee. It was the submission that the consequential assessment order was passed u/s.143(3) r.w.s.263 of the Act on 01.09.2021, wherein the AO estimated the income of the assessee @8% by applying the provisions of Section 44AD of the Act on the turnover of Rs.6,67,98,896/-. The AO also brought to tax the interest income earned by the assessee from the bank account. It was the submission that on appeal, the ld. CIT(A) though deleted the reference of Section 44AD of the Act by the AO, however, upheld the addition. It was the submission by the ld. AR that he does not want to challenge the addition representing the bank interest. However, in regard to the issue of percentage of net profit, the ld. AR has placed before us the net profit disclosed by the assessee for the subsequent assessment years as follows :-