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2013 (10) TMI 424 - AT - Income TaxEstimation of income - Whether can be applied Net Profit rate of 10% in view of the decision of the ITAT, Amritsar Bench in the case of Assessing Officer vs. Pooja Construction Co [1998 (8) TMI 111 - ITAT AMRITSAR] – Held that:- CIT(A) has not brought on record any comparable case and the fact of sub-contract has not been rebutted with the A.O. and therefore, the ld. CIT(A) is not justified to decide the issue at the back of the A.O. without affording opportunity of being heard to the A.O. - CIT(A) is not justified to reduce the net profit rate of 10% to 8%. Thus, the order of the A.O. is restored and the decision of the ld. CIT(A) is reversed. – Decided against the Assessee. Additions on account of violation of provisions of section 40A(3) of the Act - Non deduction of TDS at source under sections 194C & 194J with regard to hire charges of machinery and legal expenses and with regard to the disallowance u/s 40(a)(ia) – Held that:- Additions discernible from the books of accounts should not have been made because the books were rejected by the A.O - Profit has been estimated after rejection of books of accounts, other provisions of the Act have become redundant - Certain disallowances like 40A(3) and 40(a)(ia) have been incorporated in the Act to curb the menace of bogus expenditure through the instrument of banking transactions and TDS provisions respectively. The addition for violation of these provisions are treated as deemed income which is by fiction of law are not ordinarily the real income. When it has come to notice that the appellant has not complied with the provisions of section 40A(3) and 40(a)(ia) then it is liable for additional income irrespective of the fact that what is total quantum of receipt and what should have been the reasonable profit out of it. - Decided against the assessee.
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