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2014 (2) TMI 572 - AT - Income TaxAdmission of additional grounds – Held that:- Relying upon National Thermal Power Co. Ltd. vs. CIT [1996 (12) TMI 7 - SUPREME Court] - there may be several factors justifying raising of a new plea in an appeal and each case has to be considered on its own facts - There should be reasonable cause for furnishing additional evidence belatedly - there is reasonable cause for not raising these grounds on earlier occasion the reasons advanced by the assessee are satisfactory – thus, the additional grounds raised by the assessee are admitted for adjudication. Estimation of income at 12.5% of the gross receipts – Held that:- The Tribunal is consistently holding that in case of estimation of income in respect of contract works, the income is to be estimated at 8% of the receipts of main contract works – Relying upon M/s. C. Eswara Reddy & Co. vs. ACIT [2011 (1) TMI 1238 - ITAT HYDERABAD] - the profit at 8% for main contract and for sub contract at 5%. It may not be out of place to mention that the Tribunal uniformly estimating the profit from main contract at 8% to 12.5% depending upon the factual situation and 5% to 7% on the sub contract depending upon the factual situation – thus, estimation of profit at 8% by the CIT(A) on main contract and at 5% on sub contract is justified - Thus, the AO is directed to estimate income of the assessee at 8% of the gross receipts on contract works – Decided partly in favour of Assessee. Addition made u/s 68 of the Act - Held that:- It is for the assessee to provide the explanation for cash credits, when the assessee has not pleaded that the cash credits came out of the past intangible additions, it would not be open to the Tribunal to hold that the cash credits would be covered by such additions – Relying upon CIT vs. G. M. Chennabasappa [1958 (9) TMI 78 - ANDHRA PRADESH HIGH COURT] - The omission to claim set off of past intangible additions against cash credits would give rise to a presumption that the former amounts were not available for set off - When the alternate plea that tangible additions in the past could take care of cash credits of current year is not taken at the earlier stage and no materials are placed on record to substantiate the same, rejection of such plea would be justified - The availability of funds representing the intangible additions should be quantified not with reference to what the assessee offered for taxation but what was actually adopted in assessments for taxation – thus, the assessee failed to show how the addition u/s. 68 is related to estimated income – thus, the addition made u/s 68 sustained – Decided partly in favour of Assessee.
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