Entire receipt cannot be treated as income, in absence of material, presumptive net profit of 8% should be considered

Ravindranath J. Mishra Vs ITO (ITAT Surat)

ITAT Surat held that addition of entire contractual receipt is unsustainable in law as the entire receipt cannot be treated as income. In absence of any material to show net profit rate, presumptive net profit rate of 8% is to be considered as estimated income.

Facts- The assessee’s case was re-opened for A.Y. 2010-11 by recording reasons that as per details in ITS data, the assessee has received contractual receipt of Rs.8,95,080/- from Paras Pumps Pvt. Ltd. AO further recorded that no return of income was filed by assessee for assessment year under consideration. On the basis of information available on ITS data, AO was of the view that income of assessee has escaped assessment to the extent of contractual receipt of Rs.8,95,080/-.

Notice u/s. 148 of the Act was issued and served upon the ae on 31.03.2017. AOecorded that no response was made on the part of assessee. AO further noted that several notices issued to the assessee and on the basis of statement reflected in Form 26AS about contractual payments of Rs.8,96,080/-. AO made addition of entire sum.

Aggrieved by the addition in the assessment order, the assessee filed appeal before NFAC/Ld. CIT(A), however, addition made by AO confirmed. Being aggrieved, the present appeal is filed.

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