Vallabh Infra vs. ACIT

Parties Involved

Facts Summary

The assessee, Vallabh Infra, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2016-17. The assessee, a builder, had filed an income return on 27.09.2016 declaring total income of Rs.17,39,690/-. The case was selected for limited scrutiny to examine whether the income from the real estate business was correctly offered for tax. The Assessing Officer (AO) found that the assessee had shown a gross profit of Rs.82,90,716/- on sales of Rs.6,55,34,200/- which worked to 12.65%. The AO computed the gross profit at Rs.1,09,66,430/- by applying the Percentage Completion Method and added a differential gross profit of Rs.26,75,715/- to the total income. The assessment was completed under Section 143(3) of the Act on 28.12.2018 at a total income of Rs.44,15,410/-. The assessee filed an appeal before the First Appellate Tribunal, which was dismissed by the Ld. CIT(A). The assessee is now in appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. The order of the Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (CIT(A)) is bad in law.
• 2. The learned CIT(A) erred in fact and in confirming the addition amounting to Rs. 26,15,715/- made by the AO by wrongly applying the gross profit margin based on Percentage Completion Method.
• 3. The Honourable CIT(A) erred in fact and in law by passing order without considering submissions made by the appellant to the AO against the Show Cause Notice.

Judgment Outcome

Decided in favour of Assessee.

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