SURENDRA SINGH PATEL,BADNAWAR vs. INCOME TAX OFFICER, DHAR

ITA 294/IND/2025Status: DisposedITAT Indore24 June 2026AY 2020-215 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee claimed the receipts as business income, not income from other sources, and potentially covered under Section 44AD. Considering the detailed submissions and paper book filed before the Tribunal, the matter was restored to the AO for de novo adjudication.

What were the facts?

The assessee claimed a deduction of Rs. 99,86,650/- under Section 57 against labour contract receipts. The AO, due to lack of substantiation, restricted the deduction to 50% and disallowed the remaining amount. The assessee's appeal to the CIT(A) was unsuccessful.

What were the issues?

Whether the AO correctly disallowed a significant portion of the deduction claimed under Section 57 without considering the nature of the assessee's business and providing a fair opportunity for substantiation.

Which sections of the Income-tax Act were involved?

Section 57,Section 144,Section 144B,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI Dr. MANISH BORAD & SHRI PARESH M. JOSHI

For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 22.6.2026

PER Dr. MANISH BORAD, A.M: This appeal of Assessee pertaining to A.Y. 2020-21 is directed against the order of First Appellate Authority

ITA No.294 of 2025 2

dated 20.1.2025 which is arising out of the order u/s 263 w.r.s.144 r.w.s. 144B of the Income Tax Act 1961 (hereinafter called as the ‘Act’) framed on 01.09.2022 by ITO-Dhar.

2.

The only issue raised in this appeal through eleven grounds of appeal is against the disallowance u/s 57 Of the Act at Rs.49,93,325/-.

3.

Facts, in brief, are that the assessee is an individual and filed his return of income declaring total income at Rs.4,10,000/-. Due to non-compliance, the AO passed best judgment assessment u/s 144 observing that under the head

The order continues below.

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