AGGARWAL CONSTRUCTION CO,CHANDIGARH vs. DEPUTY COMMSSIONER OF INCOME TAX CIRCLE-1, BATHINDA
Facts
The assessee, a civil contractor, had its books rejected by the AO, who estimated a profit rate and added Rs. 8 lakhs as unsecured loans under Section 68. The CIT(A) confirmed these additions. The assessee appealed to the ITAT.
Held
The ITAT reduced the estimated profit rate on material sales from 2% to 1.25% based on a prior assessment year's decision. It deleted the addition of Rs. 8 lakhs under Section 68, finding that the loan was advanced through banking channels and sourced from FDR maturities, thus discharging the assessee's onus.
Key Issues
The key legal issues were the estimation of the profit rate on contract receipts and material sales, and the validity of an addition made under Section 68 for unsecured loans.
Sections Cited
Section 68, Section 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “DB” BENCH, AMRITSAR
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & SHRI UDAYAN DASGUPTA, JM
IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AMRITSAR VIRTUAL HEARING BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND SHRI UDAYAN DASGUPTA, JM
आयकर अपील सं. / ITA No.384/ASR/2023 (िनधा�रण वष� / Assessment Year: 2016-17) M/s Aggarwal Construction Co. DCIT Circle - 1 बनाम/ H No. 613, Sector – 36B Central Revenue Building, Vs. Chandigarh - 160036 Civil Lines Punjab - 151001 �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAMFA-7129-G (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Sudhir Sehgal (Advocate) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Charan Dass (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 05-02-2026 घोषणाकीतारीख /Date of Pronouncement 11.02.2026 : आदेश / O R D E R
Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2016- 17 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC dated 03-11-2023 in the matter of an assessment framed by Ld. AO u/s 143(3) on 21-12-2018. Though the assessee has raised multiple grounds of appeal, however the only grounds urged by Ld. AR before us are qua estimated profit rate and addition
of Rs.8 Lacs as made by Ld. AO u/s 68. Having heard rival submissions, the appeal is disposed-off as under. 2. The assessee acted as a civil contractor. During asessment proceedings, the Ld. AO rejected books of the assessee and estimated profit rate of 2% on gross sale of material and 6% on gross contract receipts. The Ld. AO also made addition of Rs.8 Lacs being unsecured loans as taken from Shri Puran Singh on 15-09-2015. Since the assessee did not file the requisite documents, the amount of Rs.8 Lacs was added u/s 68. The Ld. CIT(A) confirmed the action of Ld. AO against which the assessee is in further appeal before us. 3. We find that in AY 2014-15, on similar facts, Ld. CIT(A) vide order dated 15-02-2019 has reduced profit rate of 2% to 1.25%. Therefore, taking the same view, we direct Ld. AO to estimate profit rate of 1.25% on sale of material. The estimation of 6% on gross contract receipts is correct. The corresponding grounds stands partly allowed. 4. So far as the unsecured loan of Rs.8 Lacs is concerned, Ld. AR has placed on record copy of bank statement of Shri Puran Singh. The perusal of the same would show that the unsecured loan has been advanced through banking channels and the same has been sourced by the lender out of FDR maturities. Therefore, the onus of Sec.68 stood discharged by the assessee. This addition is thus deleted. This ground stand allowed. No other ground has been urged in the appeal.
The appeal stands partly allowed.
Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.
-Sd- -Sd- (UDAYAN DAS GUPTA) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:11.02.2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR
ITAT AMRITSAR
