Case Law Details
Shrinet & Shandilya Construction (P) Ltd. Vs Addl. CIT & DCIT (ITAT Delhi)
Once the trading results and books of accounts have been rejected and income is being estimated by applying net profit rate on the declared gross contract receipt, then no other addition is required to be made on account of any other trading items including the trade creditors or any other direct expenses as well as trading liabilities shown in the accounts. The reason being that, when the books of accounts are rejected and income is assessed on the principle of cbest judgment assessment’, then entries of the amounts shown in the books of accounts cannot be held to be reliable. Once business income of the assessee from the contract receipt business has been assessed at 8%, then it take cares of all other additions made on account of trading account and any liability including outstanding amount of trade creditors. Thus, we agree with the contention of the Ld. Counsel that if the income has been assessed after rejecting the books of accounts and net profit rate has been applied, then no separate addition on account of trade creditors should be made.
FULL TEXT OF THE ITAT JUDGMENT
The aforesaid cross appeals have been filed by the assessee as well as by the revenue against the impugned order dated 8.9.20 14, passed by Ld. CIT (Appeals) XI New Delhi for the quantum of assessment passed u/s 143(3) for A.Y. 2010-11. In assessee’s appeal, following grounds have been raised:
“Ground No. 1
Please become a Premium member. If you are already a Premium member, login here to access the full content.
