Sat Inder Constructions Private Limitd Vs DCIT ASMNT (ITAT Cuttack)
The Income Tax Appellate Tribunal (ITAT) Cuttack has allowed an appeal by Sat Inder Constructions Private Limited, ruling that an income estimation made by the Assessing Officer (AO) was unsustainable because the assessee’s books of account were not formally rejected under Section 145 of the Income Tax Act, 1961. The decision was pronounced on July 17, 2025.
The case pertains to the Assessment Year 2017-18. Sat Inder Constructions Private Limited, engaged in civil contract business, had filed its return of income on November 4, 2017, declaring an income of ₹1,31,21,770/- on total receipts of ₹30,03,06,603/-.
The dispute arose when the AO estimated the assessee’s income at 8% after depreciation. The assessee’s representative, Shri P.K. Mishra and B.N. Behera, argued before the ITAT that the AO had estimated income without formally rejecting the books of account, which is a prerequisite for such estimation.
The Senior Departmental Representative, Shri Nishanth Rao B, countered that the AO had indeed provided reasons for the estimation in the assessment order, citing issues such as allegedly bogus labour charges and the assessee’s apparent lack of sufficient plant and machinery for the scale of civil construction work undertaken, without claiming hire charges. The Department further argued that the CIT(A) had also detailed these reasons, and these reasons should be interpreted as an implied rejection of the books. It was also contended that the assessee failed to substantiate its return, including details for deductions under Section 80G.
