JPE And DK Infra (JV) v/s Assessing Officer

Parties Involved

Facts Summary

The assessee, a Joint Venture between M/s J.P. Enterprises and M/s D.K. Infrastructure Private Limited, was awarded a contract for the construction of roads in Nagpur by the Nagpur Municipal Corporation. The assessee sub-contracted the entire work to M/s J.P. Enterprises without retaining any profit. The Assessing Officer made an addition of Rs. 57,51,500, i.e. 8% of the total receipts of Rs. 7,18,93,817. The Commissioner of Income Tax (Appeals) dismissed the appeal filed by the assessee. The assessee appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Assessing Officer was correct in making an addition of Rs. 57,51,500?
• 2. Whether the estimation of the income of the assessee @ 8% of the contract receipts is on an ad-hoc basis?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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