ACIT, CIRCLE-62(1), NEW DELHI vs. SUBODH GUPTA, DELHI
What did the Tribunal hold?
The Tribunal held that Section 44AD was not applicable due to the assessee's turnover exceeding the prescribed limits. Citing a previous High Court judgment in the assessee's own case, the Tribunal declined to interfere with the CIT(A)'s order.
What were the facts?
The Revenue appealed the CIT(A)'s order, which reduced the estimated profit from 8% to 5% of civil contract works and allowed depreciation. The Assessing Officer had estimated 8% net profit on gross receipts, invoking Section 44AD.
What were the issues?
Whether Section 44AD is applicable when turnover exceeds the prescribed limits and the correctness of the profit estimation and depreciation allowance.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Dr. B. R. R. KumarMs. Astha Chandra
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the Revenue against the order of ld. CIT(A)-20, New Delhi dated 28.02.2018.
Following grounds have been raised by the Revenue:
“1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in reducing the percentage of profit to 5% of civil contract works as against 8% of civil contract work upheld by the Hon’ble Delhi High Court in the case of the assessee itself in AY 2009-10. 2. On the facts and in circumstances of the case and in law, the ld. CIT(A) has erred in allowing depreciation of Rs.20,09,838/- when the Assessing Officer had rejected the books of accounts of the assessee.”
Subodh Gupta 3. Heard the arguments of both the parties and perused the material available on record.
The turnover of the assessee during the year was Rs.33.05 Cr. The Assessing Officer estimated 8% as net profit on the gross receipts invoking the provisions of Section 44AD of the Income Tax Act, 1961.
The ld. CIT(A)-20, New Delhi, Smt. Sulekha Verma held that the profit determined @ 8% by the AO is excessive and the net profit has been determined @ 5% reduced by the depreciation.
Having gone through the order of the ld. CIT(A) and keeping in view the fact that the provisions of Section 44AD of the Income Tax Act, 1961 are not applicable to the case of the assessee owing to the turnover which is above the turnover limits prescribed by the Act and keeping in view the judgment of the Hon’ble Jurisdictional High Court in dated 09.12.2014 in assessee’s own case for the A.Y. 2009-10 on the similar issue, we decline to interfere with the reasoned order of the ld. CIT(A).
In the result, the appeal of the Revenue is dismissed. Order Pronounced in the Open Court on 31/08/2023.
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