M/s Nagendra Rai Ashok Vs. ACIT, Range-III, Mirzapur

Parties Involved

Facts Summary

The assessee, M/s Nagendra Rai Ashok, was engaged in the business of executing contracts under the Madhya Pradesh Rural Road Development Authority (MPRRDA). During the assessment years 2009-10 and 2010-11, the assessee filed regular returns but did not produce supporting books of accounts or documents. The Assessing Officer (AO) completed the assessment under section 143(3) of the Income Tax Act, estimating income at 7.25% of gross contract receipts. The assessee appealed against the order of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT) initially estimated profits at 6.30% of gross receipts. However, upon reconsideration, the Tribunal reduced the profit estimation to 6% of the gross contract receipts, considering the demurrage charges and other deductions claimed by the assessee.…

Legal Issues

• 1. Estimation of contract business profits at a flat percentage of gross contract receipts.
• 2. Addition u/s 69A amounting to Rs. 33,13,079/- and disallowance of interest u/s 40(a)(ia), amounting to Rs.3,40,272/-.

Judgment Outcome

Decided in favour of Assessee.

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