Ranjeet Kumar vs. Principal Commissioner of Income Tax

Parties Involved

Facts Summary

The assessee, Ranjeet Kumar, derives income from the supply and distribution of Rail Neer under the name and style of Proprietor M/s. Rashmi Enterprises. He filed his return of income on 04.12.2017 declaring a total income of Rs.4,31,410/-. His case was selected for a limited scrutiny, and the Assessing Officer passed a scrutiny assessment. The Assessing Officer assessed the income of the assessee with the help of section 44AD, estimating the income at 10% of the gross receipt and determining the taxable income at Rs.9,97,910/-. The Principal Commissioner of Income Tax (PCIT) found the assessment order erroneous and prejudicial to the interest of revenue, leading to the issuance of a show-cause notice. The assessee did not respond to the notices, and the PCIT set aside the assessment order, directing the Assessing Officer to re-examine the issues afresh after hearing the assessee.…

Legal Issues

• 1. Whether the Assessing Officer correctly applied the presumptive rate of 10% to the turnover of Rs.9979123/- reported in P&L Account and determined total net profit from the business at Rs.997912/- treating the cash deposits in Bank Accounts as gross receipt of business.
• 2. Whether the assessment order is prejudicial to the interest of revenue.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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