Thirumal Arun Mohan Dass Vs ACIT (ITAT Chennai)
Reopening Survives, Presumptive Income Estimation @8% Sustained; Wrong Head Claim u/s 57 Corrected Partly
For AY 2015-16, Assessee, an individual civil contractor, had not filed return originally and filed return in response to notice u/s 148 declaring income by estimating profit @6% of gross receipts. AO estimated profit @10% of receipts reflected in Form 26AS. CIT(A) restricted estimation to 8% by relying on Assessee’s own subsequent years’ returns filed on presumptive basis. Tribunal noted that where no books were maintained and income itself was offered on estimated basis, Assessee could not justify adoption of 6%, particularly when in later years he himself accepted 8% presumptive rate. Estimation @8% was therefore upheld and appeal for AY 2015-16 dismissed.
For AY 2020-21, Assessee declared income on presumptive basis but, due to ITR utility limitations for receipts exceeding Rs.2 crore, routed part of receipts under “Income from other sources” and claimed 92% deduction u/s 57. AO disallowed entire claim holding that once income is declared on presumptive basis, no further expenditure deduction is permissible. Tribunal held that receipts from Karnataka Road Development Corporation Ltd., subjected to TDS u/s 194C, were clearly business receipts wrongly shown under other sources and only profit element @8% was taxable thereon, directing deletion of balance 92% addition. However, receipt from LIC of India was rightly treated as non-business income and disallowance of deduction u/s 57 in respect thereof was sustained. Consequently, appeal for AY 2020-21 was partly allowed, while AY 2015-16 appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
These two appeals by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short “CIT(A)”) passed u/s. 250 of the Income Tax Act, 1961 ( in short “the Act”) both dated 26.06.2025 for Assessment Year (AY) 2015-16 & 2020-21.
