ACIT, CIRCLE-4, PATNA vs. AMIT KUMAR SINGH, PATNA

ITA 95/PAT/2020Status: DisposedITAT Patna30 September 2026AY 2015-1616 pages
AI SummaryPartly Allowed

What were the facts?

The appeals by the Revenue challenge orders of the CIT(A) for Assessment Years (AY) 2015-16 and 2017-18, which arose from assessment orders passed by the AO under Section 143(3) and 271(1)(c) of the Income Tax Act, 1961. For AY 2015-16, the assessee, engaged in Civil Contract work, declared a total income of Rs. 1,97,04,240/- on gross receipts of Rs. 56,56,21,799/-. The AO rejected the assessee's books of account under Section 145(3) due to non-compliance with notices and lack of supporting evidence for expenses, estimating profit at 8% of gross receipts. The CIT(A) restricted the addition to 4.52% of gross receipts and allowed depreciation. The Revenue appealed this reduction.

What did the Tribunal hold?

The Tribunal held that the AO was justified in rejecting the assessee's books of account under Section 145(3) due to non-compliance and lack of supporting documents. The Tribunal found that the CIT(A) reduced the net profit rate from 8% to 4.52% without cogent reasons and reversed the CIT(A)'s order on this issue, upholding the AO's estimation of 8% net profit. Regarding the addition under Section 68 for unsecured loans, the Tribunal noted that the assessee's argument that no further addition can be made once income is estimated is not justified, as the business income computed under Chapter IV-D is routed through the profit and loss account to the balance sheet. However, considering the facts and circumstances, the Tribunal remitted the issue of Section 68 addition back to the AO for fresh consideration and decision, with a strict warning against adjournments. The Tribunal also noted that the CIT(A) had incorrectly stated that Section 145 was not invoked by the AO.

What were the issues?

1. Whether the CIT(A) erred in reducing the estimated net profit rate from 8% to 4.52% on gross receipts for AY 2015-16, despite the assessee's non-compliance with assessment notices and failure to provide supporting documents for expenses, thereby rejecting the AO's estimation under Section 145(3). Assessee's contention: Relied on the CIT(A)'s order and the judgment in *Shyam Bihari vs. CIT* (Patna High Court). Revenue's contention: The AO rightly applied an 8% net profit rate due to the assessee's repeated non-compliance and lack of evidence. The CIT(A) reduced the rate without cogent reasons. The CBDT Circular relied upon by the CIT(A) requires complete details, which the assessee did not provide. The AO's estimation under Section 145(3) is correct. 2. Whether the addition made by the AO under Section 68 for unsecured loans was justified, especially when the books of account were rejected and income was estimated under Section 145(3). Assessee's contention: Once income is estimated under Section 145(3), no further addition can be made under Section 68. Relied on *ACIT vs. Shri S. Moorthy* (ITAT Chennai) and a judgment dated 24.04.2020. Revenue's contention: The addition under Section 68 is justified as it pertains to a balance sheet item, which is part of the overall business income computation. Relied on *Basir Ahmed Sisodia vs. ITO* (SC). The CIT(A) wrongly noted that Section 145 was not invoked.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 271(1)(c),Section 145(3),Section 142(1),Section 68,Section 28,Section 44DB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA BENCH, PATNA

For Appellant: Shri Nishant Maitin, CA
For Respondent: Shri Bharat Bhusan, CIT-DR
Hearing: 23.09.2026Pronounced: 30.09.2026

PER LAXMI PRASAD SAHU, AM: These appeals filed by the revenue against the separate orders passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the learned Commissioner of Income-tax (Appeals), Patna – 2 [hereinafter referred to as ‘the ld. CIT(A)’], vide DIN No.

2 ITA Nos.95 & 88/Pat/2020/AYs 2015-16 & 2017-18 ACIT & DCIT vs. Amit Kumar Singh ITBA/APLS/S/250/2020-21/1027358037(1), dated 22.06.2020 and ITBA/APL/S/250/2020-21/1027732433(1), dated 17.08.2020 arising out of separa

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 271(1)(c)

All 24,918 judgments and leading authorities on Section 271(1)(c) →

Latest GST High Court judgments

Search GST case law →