Madnani Construction (P) Ltd. v. CIT

296 ITR 45High Court2008#10479 most cited

What is Madnani Construction (P) Ltd. v. CIT authority for?

A best judgment assessment cannot be invoked solely because a business has made low profits in a particular year. The Assessing Officer must demonstrate specific errors or deficiencies in the books of account before rejecting them and resorting to estimation.

10

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2016 to 2025.

Also referred to as

Madnani Construction (P) Ltd v CIT · 296 ITR 45 · best judgment assessment · rejection of books of account · section 145(3) · low profit · audited report · P&L account · undisclosed income · opportunity of being heard · section 143(3)

Sections most often in play

Section 115BBESection 143(3)Section 145(3)Section 68Section 69Section 133ASection 44AB

Issues it is cited on

best judgment assessmentrejection of books of accountsection 145(3)section 133aundisclosed incomesection 11previous yearopportunity of being heardsection 143businesssection 14person

Judgments citing Madnani Construction (P) Ltd. v. CIT

Rais Ahmed Mewafarosh, Dungarpur vs. DCIT, Central Circle-2 Udaipur, Udaipur

In the result both these appeals are partly allowed

ITA 639/JODH/2024[2019-20]Status: DisposedITAT Jodhpur27 May 2025AY 2019-20

Bench: Shri Rajpal Yadav, Hon'Ble & Dr. Mitha Lal Meena, Hon'Ble

Section 115Section 115BSection 133ASection 143(2)Section 143(3)Section 145(3)

…by the department by pointing out any specific mistake/ deficiency in the books of account or by the AO that the profits and gains cannot be properly deduced from such book of account. 8.2 On similar facts, in the case of Madnani Construction (P) Ltd v/s CIT 296 ITR 45 (Gau), it has been held that Low profit in a particular year is itself cannot be a ground for invoking the powers of best judgment assessment without support of any material on record-AO relied upon a part of a transaction for the preceding year while rejecting the other. This is not permissible in law. Without pointing out any error in the P&L a/…

Rais Ahmed Mewafarosh, Dungarpur vs. DCIT, Central Circle-2, Udaipur

In the result both these appeals are partly allowed

ITA 638/JODH/2024[2018-19]Status: DisposedITAT Jodhpur27 May 2025AY 2018-19

Bench: Shri Rajpal Yadav, Hon'Ble & Dr. Mitha Lal Meena, Hon'Ble

Section 115Section 115BSection 133ASection 143(2)Section 143(3)Section 145(3)

…by the department by pointing out any specific mistake/ deficiency in the books of account or by the AO that the profits and gains cannot be properly deduced from such book of account. 8.2 On similar facts, in the case of Madnani Construction (P) Ltd v/s CIT 296 ITR 45 (Gau), it has been held that Low profit in a particular year is itself cannot be a ground for invoking the powers of best judgment assessment without support of any material on record-AO relied upon a part of a transaction for the preceding year while rejecting the other. This is not permissible in law. Without pointing out any error in the P&L a/…

DCIT, Circle, Yamunanagar vs. M/S Symbiosis Pharmaceuticals Pvt. Ltd., Yamunanagar

In the result, appeal is dismissed

ITA 326/CHANDI/2019[2014-15]Status: DisposedITAT Chandigarh04 Jan 2024AY 2014-15

Bench: The Due Date As Prescribed In Section 139(1) Of The I.T. Act, 1961 Whereas The Assessee Has Filed Its Return Of Income After The Due Date.

For Appellant: Shri Dhruv Goyal, CAFor Respondent: Shri Sarabjeet Singh, CIT-DR
Section 139Section 139(1)Section 80ASection 80I

…etc. have neither been rejected nor are doubted, accounts could not be bye-passed merely on the whims and fences of the parties”. Almost, the same view was taken in “Madnani Construction Corporation P. ITA 326/CHD/2019 A.Y. 2014-15 36 Ltd. Vs CIT” (2008) 296 ITR 45 (Gauhati) and “Pyare Lal Mittal Vs ACIT” (2007) 291 ITR 214 (Gauhati). 18.3 In “M/s Amar Nath & Sons, Kurukshetra Vs the ITO, Ward-2, Kurukshetra”, vide order dated 18.04.2012 (copy assessment ACL Paper Book -1, at pages 21-26), passed in ITA 227/CHD/2012, for assessment year 2008-09, the Chandigarh Bench of the Tribunal has held that there mu…

Mahesh Kumar, Faridabad vs. Income Tax Officer, Faridabad

Appeal are allowed

ITA 2134/DEL/2023[2014-15]Status: DisposedITAT Delhi22 Dec 2023AY 2014-15

Bench: Shri Kul Bharatassessment Year: 2014-15

Section 2(47)Section 53A

…1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER Assessment Year: 2014-15 Mahesh Kumar, Vs Income-tax Officer, H. No. 352, Near Shiv Mandir, Faridabad. Tilpat, Amar Nagar, Faridabad. PAN- AZHPK1325Q APPELLANT RESPONDENT Appellant by Sh. Vineet Gupta, CA & Sh. Apurv Sharma, CA Respondent by Shri Om Parkash, Sr. DR Date of hearing 19.12.2023 Date of pronouncement 22.12.2023 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC)…

Giriraj Prasad Goyal, Tonk vs. ITO Tonk, Tonk

In the result, both appeals of the assessee are allowed for statistical

ITA 200/JPR/2023[2014-15]Status: HeardITAT Jaipur05 Jul 2023AY 2014-15

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Shrawan Kumar Gupta (Adv.)For Respondent: Smt. Monisha Choudhary (Addl. CIT)
Section 143(3)Section 147Section 148Section 24

…ng on the facts, nature of exp., comparable cases and the ld. AO has blindly ignored these very vital facts and made the disallowance without any basis and hence, the same may kindly be deleted in full. 7.1 In the case of Madnani Construction (P) Ltd V/s CIT 296 ITR 45 (Gau) it has been held that without pointing out any error in the P&L account and audit report, the power of the best judgment assessment could not be invoked and low profit in a particular year itself cannot be a ground for invoking power of best judgment assessment. 7.2 In the case of ACIT v/s Sarv Prakash 24 DTR 91 (Agr)™ it has been held that…

ITO, New Delhi vs. Sh. Sunil Nayyar, Delhi

In the result, the appeal of the revenue is dismissed and Cross

ITA 6168/DEL/2016[2012-13]Status: DisposedITAT Delhi24 Feb 2020AY 2012-13

Bench: Sh. Kuldip Singhdr. B. R. R. Kumarita No. 6168/Del/2016 : Asstt. Year : 2012-13 Income Tax Officer, Vs Sh. Sunil Nayyar, Ward-49(3), R/O 81-A, Vikrant Enclave, New Delhi Mayapuri, New Delhi-110064 (Appellant) (Respondent) Pan No. Abvpn3963B

For Appellant: Sh. Jagdish Ajmani, CAFor Respondent: Sh. Saras Kumar, Sr. DR
Section 68

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Sh. Kuldip Singh, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 6168/Del/2016 : Asstt. Year : 2012-13 Income Tax Officer, Vs Sh. Sunil Nayyar, Ward-49(3), R/o 81-A, Vikrant Enclave, New Delhi Mayapuri, New Delhi-110064 (APPELLANT) (RESPONDENT) PAN No. ABVPN3963B CO No. 09/Del/2017 : Asstt. Year : 2012-13 Sh. Sunil Nayyar, Vs Income Tax Officer, R/o 81-A, Vikrant Enclave, Ward-49(3), Mayapuri, New Delhi-110064 New Delhi (APPELLANT) (RESPONDENT) PAN No. ABVPN3963B Assessee by : Sh. Jagdish Ajmani, CA Revenue by : Sh. Saras Ku…

Paliwal Jewellers, Jaipur vs. ITO, Jaipur

In the result, appeal of the assessee is allowed for statistical purposes

ITA 82/JPR/2017[2012-13]Status: DisposedITAT Jaipur27 Nov 2017AY 2012-13
For Appellant: Shri Shrawan Kr. Gupta (Advocate)For Respondent: Shri Shailendra Sharma (Addl. CIT)
Section 143(3)Section 40A(3)

…e M/s. Paliwal Jewellers. the disallowance without any basis and hence, the same may kindly be deleted in full. ” In support, the ld. Counsel for the assessee placed reliance on the following judicial pronouncements :- Madnani Construction (P) Ltd V/s CIT 296 ITR 45 (Gau) ACIT v/s Sarv Prakash 24 DTR 91 (Agr)™ CIT v/s Ranichhera Tea Co. 207 ITR 979 (Cal) CIT vs. Swaminarayan Vijay Carry Trade (P.)Ltd. (2013) 84 CCH 311 (Guj) CIT vs. PORRITS & SPENCER (A) LTD. (2010) 324 ITR 260 (P&H) The ld. Counsel for the assessee also submitted that :- “ Books not rejected: Further it is very pertinent to note that o…

ACIT, Meerut vs. M/S Arihant Pulication (India) Ltd., Meerut

The appeals of the Revenue are dismissed

ITA 5405/DEL/2013[2010-11]Status: DisposedITAT Delhi16 Jun 2017AY 2010-11

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

Section 145(3)

…In the Income-Tax Appellate Tribunal, Delhi Bench ‘A’, New Delhi Before : Shri I.C. Sudhir, Judicial Member And Shri L.P. Sahu, Accountant Member ITA No. 5405/Del./2013 & 6640/Del./2014 Assessment Year: 2010-11 & 2011-12 A.C.I.T., Circle 1, vs. Arihant Publication (India) Ltd., Meerut. 24-26, Kalindi Colony, T.P. Nagar, (Appellant) Meerut. (PAN – AAECA 7236R) (Respondent) Assessee by Shri S.K. Jain, Sr. DR Revenue by Shri Deepak Kapoor, Advocate Date of Hearing 24.05.2017 Date of Pronouncement 16.06.2017 ORDER Per L.P. Sahu, A.M.: These two appeals by the Revenue are directed against the orders of ld. CIT(A),…

DCIT, Cir-32, Kolkata vs. M/S Spml Cisc (Jv), Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 635/KOL/2014[2009-2010]Status: DisposedITAT Kolkata03 Feb 2017AY 2009-2010

Bench: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi

Section 142(1)Section 143(3)Section 145(3)

…dicial pronouncements in support of its aforesaid submissions:- (i) ITO-vs.- Girish M. Mehta [296 ITR (AT) 125 (Rajkot)]; (ii) Eagle Synthetics Pvt. Limited –vs.- ITO [8 ITR (Trib.) 211(Ahmedabad)]; (iii) Madnani Construction Corporation P. Limited –vs.- CIT [296 ITR 45 (Guwahati)]. 4. After taking into consideration the submission made by the assessee as well as the case laws cited in support, the ld. CIT(Appeals) found merit in the stand of the assessee and deleted the addition made by the Assessing Officer to the total income of the assessee by estimating the gross profit of the business of execution of works…

ACIT, New Delhi vs. M/S. S.K. Sharma Contractor, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 2673/DEL/2012[2006-07]Status: DisposedITAT Delhi02 Mar 2016AY 2006-07

Bench: : Shri C.M. Garg & Shri L.P. Sahu

For Appellant: Smt. Anima Barnwal, Sr. DRFor Respondent: Shri L.M. Aggarwal, C.A
Section 144Section 145(3)Section 40

…homas and Company P. Ltd. 2.74% 3.00% 4 ITA No. 2673/Del./2012 The assessee firm has shown NP rate @ 4.17%. Reliance is also placed on following cases for wrong invocation of section 145(3) of the Act. (i). M/s. Madnani Construction Company (P) Ltd. vs. CIT 296 ITR 45 (Gau.) (ii). M/s. Ashok Kumar & Co. vs. ITO (2004) 2 SOT 518 (Asr.)(SMC) (iii). M/s. CM Francis & Co. (P) Ltd vs. CIT (1970) 11 449 Kerela High Court (iv). Sh. Imran Ahmed vs. CIT (1982) Tax LR (NOC) III Alld. H.C. (v). M/s. Valtamp Transporter (P) Ltd. vs. CIT (1981) 129 ITR 105, 113, Guj. HC (vi). CIT vs. Dalmia Contract (Bharat) Ltd. (2002) 254…

Madnani Construction (P) Ltd. v. CIT (296 ITR 45) — Cited in 10 Judgments | BharatTax