SH. RAJ KUMAR,GHAZIABAD vs. ITO, GHAZIABAD
What did the Tribunal hold?
The Tribunal directed the AO to assess the assessee's income at 8% of gross receipts, applying the presumptive tax rate prescribed under Section 44AB of the Act.
What were the facts?
The assessee, a Civil Contractor, had 20% of purchases disallowed and 20% of sundry creditors added to income by the AO for lack of evidence. The CIT(A) confirmed this addition.
What were the issues?
Whether the disallowance of purchases and addition of sundry creditors were justified, and if a presumptive tax rate is applicable.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-2’, NEW DELHI
Before: SHRI J. SUDHAKAR REDDY
This is an appeal filed by the assessee against the order dt. 31.3.2014 of Ld.CIT(A), Muzaffarnagar for Assessment Year 2008-09.
The facts in brief are that the assessee is a Civil Contractor. The A.O. disallowed 20% of the purchases as the assessee could not produce books of accounts and evidences. Further 20% of the sundry creditors amounting to Rs.99,700/- were added to the income. On appeal the First Appellate Authority confirmed the same.
On consideration of rival submissions, I am of the considered opinion that the ends of justice would be met if the income of the assessee is determined at 8% of gross receipts by applying presumptive tax rate prescribed u/s 44AB of the Act. In the result the appeal of the assessee is allowed in part. The A.O. is directed to assess the income of the assessee at 8% of his gross receipts as prescribed u/s 44 AB of the Act.
In the result, the appeal by the assessee stands partly allowed. Order pronounced in the Open Court on 14th October,2015.
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