BONTALA ALEEM MIAH,KURNOOL vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, KURNOOL

The learned Principal Commissioner of Income Tax should have appreciated that the Order of Assessing Officer is neither erroneous nor prejudicial to the interest of the revenue.

The learned Principal Commissioner of Income Tax should have appreciated that the Assessing Officer completed the Assessment after proper enquiry and that it is in consistent with the assessment Orders passed in the earlier years. Therefore, the learned Principal Commissioner of Income Tax should have not interfered with the Order of the Assessing Officer U/s.263 of the Income Tax Act.

The learned Principal Commissioner of Income Tax should have seen that additions U/s.40A(3)/40(a)(1a) cannot be made when once the income is estimated by the Assessing Officer.

The learned Principal Commissioner of Income Tax should have seen that the Assessment is completed by the Assessing Officer after taking into account the manner in which the assessments were completed in the earlier years and that the same facts and the same circumstances compared to the earlier years, exist this year also.

The learned Principal Commissioner of Income Tax is not justified in directing the Assessing Officer to assess the total income at 8% or at such amount determined taking into account the violations U/s. 40A(3)/40(a)(1a) whichever results in higher income.

The brief facts of the case are that the assessee is an individual engaged in the business of civil contracts filed his return of income for 3 ITA 814/Hyd/2019 the relevant assessment year on 27.11.2014 admitting total income of Rs.24,10,790/-. Thereafter the case was selected for scrutiny under CASS and the assessment was completed u/s.143(3) of the Act vide order dt.30.06.2016 wherein the Ld.AO estimated the income of the assessee at 6% of the gross receipts of Rs.10,92,25,344/- which works out to Rs.55,53,521/- as against the income declared by the assessee for Rs.24,34,596/- and thereby made an addition of Rs.41,18,925/-. The Ld.AO briefly arrived at such conclusion because the assessee had not maintained proper vouchers and bills with respect to the expenditure incurred by him. The Ld. Pr.CIT, Kurnool after examining the order of the Ld.AO made the following observations: -

The assessee had disclosed Rs.1,42,239 in his return of income under the head “Income from other source” which was omitted to be assessed by the Ld.AO in the assessment order.

The Ld.AO has estimated the income of the assessee at 6% of the turnover however there was no proper explanation for the same when the nature of work the assessee was engaged in generates more income. 3. The assessee had not deducted tax at source for the payments made towards expenditure incurred which was not taken into consideration by the Ld.AO while framing the assessment. 4. There was lack of inquiry by the Ld.AO for making the assessment.