Era Infra Saidutta JV Vs ACIT (ITAT Delhi)
Delhi ITAT partly allowed the assessee’s appeal arising from rejection of books u/s 145(3) & estimation of profits. The assessee, a JV executing infrastructure contracts, had declared net profit of about 1.65% on gross receipts of ₹20.75 crore. The AO rejected the books on the ground that complete books, ledgers & supporting evidence relating to contract expenses were not produced, & estimated profit @ 8% of turnover, resulting in addition of ₹1.31 crore (after giving credit for declared profit).
Tribunal held that where the assessee fails to furnish complete books & relevant evidences enabling proper determination of profits, rejection of books u/s 145(3) is justified. However, considering the assessee’s own past profit trend (around 1.7% in earlier years) & the nature of contracts, estimation of net profit at 8% was found to be excessive. In the interest of justice, the Tribunal restricted the estimated net profit to 2% of turnover & directed deletion of the balance 6% addition. The issue of penalty u/s 270A was held to be premature. Accordingly, the appeal was partly allowed
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the Revenue is preferred against the order of the NFAC, dated 26.03.2024 pertaining to A.Y. 2017-18.
