Smt. Archana Dutta Vs ACIT (ITAT Agra)
The ITAT Agra considered the assessee’s appeal for Assessment Year 2011-12 arising from an assessment completed under Section 144 of the Income-tax Act, 1961. The assessee, engaged in civil contract and road construction work for Government departments, had filed a return declaring total income of ₹17,96,170. The Assessing Officer (AO) completed the assessment by estimating net profit at 12% of the gross contract receipts after rejecting the books of account under Section 145(3), resulting in a substantial trading addition. The AO also made additions towards short-term capital gains, unexplained capital introduction under Section 68, and disallowance under Section 43B.
The AO rejected the books of account on the ground that the assessee’s non-cooperation led to a best judgment assessment under Section 144. Applying the decision of the Punjab and Haryana High Court in CIT v. Prabhat Kumar, the AO estimated profit at 12% of the gross contract receipts.
On appeal, the Commissioner (Appeals) upheld the rejection of books under Section 145(3), observing that the assessee had failed to furnish the required details, making it impossible to determine the true profit. However, relying upon an earlier Agra Bench decision involving a civil contractor, the Commissioner (Appeals) reduced the net profit rate from 12% to 8%, taking the view that the presumptive rate under Section 44AD should be applied after rejection of books.
