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2014 (12) TMI 341 - AT - Income TaxEstimation of income - Rejection of books of accounts u/s 145 maintained in the regular course of business – Held that:- Assessee contended that the statements showing the working of centage for the current year and the same working for the preceding years from AY 2004-05 to 2008-09 - centage was considered in each year and thereafter, the closing work in progress was determined and therefore, the addition made by the AO is not justified - centage charges are not fixed and it is varying on the basis of type of contract - certain state government works are allotted to the assessee on which no centage is admissible - these works include M.P./M.L.A. works allotted by the district level authorities works and non centage works - the assessee is bound to execute these non centage works also - the addition was made by the AO by applying the blanket rate of 12.5% for centage charges whereas the claim of the assessee is that on M.L.A./M.P. Nidhi, no centage charges is receivable but as per the details available, in respect of some contracts in respect of M.L.A./M.P. Nidhi, the assessee has also shown centage charges - the working of the assessee is not proper and the basis adopted by the AO is also not scientific – thus, the order of the CIT(A) is set aside and the matter is remitted back to the AO for fresh decision – Decided in favour of assessee. Addition of earned interest on unutilized fund payable to UP Govt. deleted – Held that:- Out of total amount shown as interest on unutilized fund at ₹ 34,07,81,937/- as against opening balance of ₹ 29,12,39,888/-, the AO has treated the amount of ₹ 4,95,42,098/- as income of the assessee for the present year - This amount is difference in opening balance and closing balance - no finding is given by CIT(A) that in fact, the amount of interest income is earned in respect of interest on unutilized fund – thus, the order of the CIT(A) is set aside and the matter is remitted back to the AO for fresh decision in after examining this contention of the assessee that as per the direction of the U.P. Government, from whom the grant was received by the assessee, if any unutilized fund is kept in bank and any interest is earned then such interest income is not income of the assessee and it has to be treated as extra grant by the Government – Decided in favour of revenue.
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