SHRI RAMESHBHAI ISHWARBHAI PATEL,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-2., PATAN

Relevant facts are in a narrow compass. There is no dispute that this assessee is a civil contractor engaged in construction business. His profit & loss account disclosed gross contract receipt of Rs.86,15,906/- whereas various government agencies TDS as well as Form 26AS would state the said amount to be of Rs.1,37,20,757/-. The same resulted in difference of Rs.51,04,851/-. Learned counsel representing assessee is fair enough in stating that he could not reconcile the amount in question of Rs.24,40,009/- making the Assessing Officer to treat it as undisclosed contract income in question. The CIT(A) affirms the Assessing Officer’s action making the impugned addition.

We have heard both the parties. The assessee concedes that the amount in dispute represents his civil construction contract income in the course of hearing. His only plea is that once this is the case, the impugned addition could be made only qua the net profit element @8% as per Section 44 AD of the Act. Learned Departmental Representative fails to dispute the crucial fact that the impugned sum represents assessee’s business income only. We proceed in this backdrop to notice that the assessee has declared gross profits @ 12.45% and 10.04% in the preceding two assessment years and @ 11.89% in the impugned assessment year. We accordingly deem it appropriate that an estimated gross profit addition @ 12% in the impugned assessment year qua the amount in question of Rs.24,40,009/- would be just and proper. Learned counsel fairly accepts the same in the course of hearing. We order accordingly with a rider that our instant estimation would

This assessee’s appeal is partly allowed in above terms.