TMI Blog2018 (3) TMI 2006X X X X Extracts X X X X X X X X Extracts X X X X ..... esumptive taxation basis u/s. 44AD of the Act. The contention of the A.O. that the recipients are not maintaining any details is ill-founded because of the immunity granted u/s. 44AD of the Act. The recipients are not obliged to maintain any books of accounts if they return their profit u/s. 44AD of the Act. Further, the income of Saumya Mining Ltd. has been accepted as such in its assessment framed u/s. 143(3) of the Act. In our considered opinion, when the contract receipts of the assessee has been accepted in toto. We fail to understand if the assessee has not incurred these expenditures then how could it execute the contract work allotted to it. Also as the books of accounts of the assessee are audited and the A.O. has not poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. During the year under consideration, a survey u/s. 133A of the Act was conducted on 2.06.2010 on the business premises of the assessee. During the course of the survey operations, statement of Shri Rajesh Agrawal was recorded who offered an amount of Rs. 3.75 crores on account of bogus trade creitors as his undisclosed income for the year under consideration. 5. During the course of the scrutiny assessment proceedings, the A.O. asked the assessee to furnish the details of expenses claimed under the head work payment at Rs. 18.06 crores. The A.O. found that in the immediately preceding year, the assessee has claimed Rs. 12.50 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the above 8 persons are close/ relatives of the Director of the assessee company, the A.O. observed that in all the above cases, the payments were shown as credits at the year end and further observed that none of these persons have executed any contract work for any other persons other than the assessee company. 7. On further query, the assessee furnished the copy of accounts of all the persons. The A.O. was of the opinion that the assessee is in the habit of claiming bogus expenses, therefore not convinced with the contentions of the assessee. The A.O. disallowed the sum of Rs. 2,13,94,500/- treating the work payment expenses as bogus. 8. Proceeding further, the A.O. noticed that the assessee has claimed expenditure of Rs. 7,96,72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5%. The ld. CIT(A) further observed that the PAN details of all the subcontractors were made available to the A.O. and the A.O. has not brought on record anything in rejection of the claim of expenditure by the asessee. The assessee has calculated the income surrendered during the course of survey separately. Having convinced with the contentions of the assessee, the ld. CIT(A) deleted both the disallowances. 11. Aggrieved by this, the revenue is before us. The ld. D.R. strongly supported the findings of the A.O. Per contra, the ld. Counsel for the assessee reiterated what has been stated before the lower authorities. 12. We have given a thoughtful consideration to the orders of the authorities below and with the assistance of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts of the assessee are audited and the A.O. has not pointed out any defect in the books of accounts of the assessee. More importantly, the allegation that the assessee s gross profit and net profit have substantially reduced during the year is also not correct. The following chart shows the profitability of the assessee for the year under consideration vis- -vis previous year:- Particulars Year ended 31.03.2010 Year ended 31.03.2009 Total receipt including increase/ (decrease) in closing stock Contract and Other expenses 4,362.22 3,944.81 Contract and Other expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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