What did the Tribunal hold?

The Tribunal found that while the rejection of books was not challenged, the 8% estimation was excessive. Considering the assessee's disclosed income of 5.59% and previous Tribunal rulings, the income was estimated at 7% of gross receipts.

The Assessing Officer made an ex-parte assessment under Section 144, estimating the assessee's income at 8% of gross contract receipts due to non-compliance. The CIT(A) confirmed this estimation.

What were the issues?

Whether the estimation of income at 8% of gross contract receipts by the Assessing Officer was reasonable, given the assessee's failure to produce books of account.

Shantilata Singh vs ITO | ITAT Cuttack 2017

Income Tax Appellate Tribunal, CUTTACK ‘SMC’ BENCH,

Before: SHRI N.S SAINI

For Appellant: Shri S.N.Sahu, AR

For Respondent: Shri D.K.Pradhan, DR

Pronounced: 05/01

This is an appeal filed by the assessee against the order of CIT(A)-

Cuttack, dated 25.1.2016, for the assessment year 2010-2011.

The only grievance in this appeal is that the ld CIT(A) erred in confirming

the action of the Assessing Officer in estimating the income of the assessee @

8% of gross civil contract receipts in an order passed u/s.144 of the Act is

excessive.

2 ITA No. 97 /CT K/20 16 Asse ssment Year : 20 10- 201 1

I have heard the rival submissions and perused the orders of lower

authorities and materials available on record. In the instant case, the assessee

is engaged in the business of contract works and the Assessing Officer

required the assessee to produce its books of account, etc for verification. The

Assessing Officer allowed a number of opportunities to the assessee but the

assessee failed to comply with the notice of hearing issued by the Assessing

Officer and, therefore, the assessment was made u/s.144 of the Act by

estimating the income of the assessee applying the rate of 8% to the gross

contract receipts of Rs.1,21,00,287/- and estimating the income at

Rs.9,68,023/-.

On appeal, ld CIT(A) confirmed the action of the Assessing Officer.

Before me, the submission of ld A.R. of the assessee is that during the

year under appeal, the assessee has shown income @ 5.59% of gross civil

contract receipts. He submitted that this Bench of the Tribunal in the case of

other assesses in similar line of business has held the estimation of income

applying the rate of 4.5% to 5% of gross civil contract receipts to be

reasonable. Hence, he prayed that the income of the assessee should be

estimated at 6% of the gross civil contract receipts.

On the other hand, ld D.R. relied on the orders of lower authorities.

3 ITA No. 97 /CT K/20 16 Asse ssment Year : 20 10- 201 1

I find that the rejection of books of account by the Assessing Officer is

not challenged before me. The only issue to be adjudicated by me is whether

applying the rate of 8% to the gross civil contract receipts by the Assessing

Officer in estimating the income of the assessee is reasonable or not. The ld

A.R. of the assessee has submitted that the assessee himself has disclosed

income @ 5.59% of gross civil contract receipts. In the given facts and

circumstances of the case, I am of the considered opinion that it would meet

the ends of justice, if the income of the assessee is estimated by applying the

rate of 7% to the gross civil contract receipts. I, therefore, modify the order

of the ld CIT(A) accordingly.

In the result, the appeal filed by the assessee is partly allowed.

Order pronounced in the open court on 05/01/2017 in the presence of parties.

Sd/- (N.S Saini) ACCOUNTANT MEMBER

Cuttack; Dated 05/01 /2017 B.K.Parida, SPS

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Copy of the Order forwarded to : 1. The Appellant : Shantilata Singh, W/o Lt Gokul Kumar Singh, Badahat, Kendrapara 2. The respondent :ITO, Ward-2, Paradeep. 3. The CIT(A), Cuttack 4. CIT, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER,

ASST.REGISTRAR, ITAT, Cuttack

SHANTILATA SINGH,CUTTACK vs. ITO, WARD-2, PARADEEP

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