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2012 (8) TMI 10 - AT - Income TaxAddition on account of low gross profit - rejection of the book results by invoking section 145(3) - Held that:- The primary reason weighing with the Assessing Officer to hold the book results as unreliable is on account of incurrence of site expenses of Rs 51,13,893/- which was unverifiable as it was entirely based on self-made vouchers. Secondly, the labour payments of Rs 62,62,166/- was also found abnormally increased to 28.97% in comparison to 14.92% and 20.23% incurred in assessment year 2003-04 and 2004-05 respectively -no credible and convincing explanation has been rendered by the assessee. Section 145(3) of the Act has been correctly invoked by the Revenue authorities in this case. Quantum of income determined by the Assessing Officer after rejection of the book results - Held that:- The estimation is quite excessive and unjustified considering past history wherein level of profits declared by the assessee are not so huge, we deem it fit and proper that an addition of Rs 5,00,000/- would suffice to plug the leak of revenue, if any, on this account. Disallowance invoking section 40(a)(ia) - non deduction of tax a source - held that:- Find fit and proper to remit the matter back to the file of AO for a decision afresh as the remand is necessitated in view of the decision of the Special Bench in the case of Merilyn Shipping & Transports (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ) whereby it has been laid down that the disallowance under section 40(a)(ia) shall be limited to only such expenditure which is found payable as on 31st March of the year and not to expenditure which has otherwise been actually paid during the year itself - appeal of assessee partly allowed.
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