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2012 (11) TMI 946 - AT - Income TaxSelection of case for scrutiny - held that:- procedure for selection of cases for scrutiny for noncorporate assessees is for the cases for taking into scrutiny during the financial year 2005-06 and selection in the financial year 2005-06 can only be taken for the preceding years to financial year 2005-06. Therefore, the Ld. CIT(A) is not justified in deciding the issue following the said procedure which is not available during the impugned financial year 2005-06 relevant to the assessment year 2006-07. - Decided in favor of assessee. Disallowance of Salary and Wages – genuineness of wages - Held that:- AO has treated the wages of one month as genuine and others as ingenuine. - In the absence of any explanation by the assessee, the authorities have to make best judgment assessment which should be honest and fair. - This view is fortified by the decision of the Hon’ble Supreme Court, in the case of Brij Bhushan Lal Praduman Kumar vs. CIT [1978 (10) TMI 2 - SUPREME COURT] Though arbitrariness cannot be avoided in such estimate, the same must not be capricious but should have a reasonable nexus to the available material and circumstances of the case - If the additions, as made by the AO are compared with the turnover of the assessee, the income of the assessee comes at 40.32% which is almost 4 to 5 times of the income shown in the past and also in the case of other contractors. Therefore, the assessment made by the AO is not based on the facts but an arbitrary assessment. - Deletion of addition by CIT(A) confirmed - Decided in favor of assessee. Addition made on account of bogus purchases of materiaL – Held that:- the AO was not justified in making specific addition without giving any opportunity to the assessee - no infirmity in the order of CIT(A) in this regard - C.O. of the assessee, the same is supportive in nature and therefore, did not require any adjudication and the same is dismissed accordingly - In the result, the appeal of the Revenue is partly allowed and C.O. of the assessee is dismissed.
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