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September 2025

Assessment — Rejection of books of account — Estimation of net profit at 8% — Disallowance u/s. 43B while computing income and tax liability — Since profit was estimated after rejecting books of account Tribunal could not restore the matter to the Assessing Officer to consider whether addition was required to be made.

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 3 mins

29. [2025] 177 taxmann.com 181 (Cal.):

Skyscraper Projects (P.) Ltd. vs. Addl.CIT:

A. Ys. 2012-13: Date of order 28/07/2025:

S. 43B of ITA 1961

Assessment — Rejection of books of account — Estimation of net profit at 8% — Disallowance u/s. 43B while computing income and tax liability — Since profit was estimated after rejecting books of account Tribunal could not restore the matter to the Assessing Officer to consider whether addition was required to be made.

The Assessee is engaged in the business of civil construction. The assessee filed its return of income for AY 2012-13. The Assessee’s return was selected for scrutiny. In the course of assessment, the Assessing Officer rejected the books of account of the Assessee and estimated the net profit at 8%, as was done in the earlier assessment years. However, while computing the tax liability, the Assessing Officer made a disallowance u/s. 43B of the Income-tax Act, 1961 and added the said amount while computing tax liability.

CIT(A) held that once the Assessing Officer has estimated the income after rejecting books of account, it is presumed that all the provisions of sections 29 to 4

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