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2018 (1) TMI 1608 - AT - Income TaxRejection of books of accounts - estimation of net profit @ 8% - addition on the contract receipts - HELD THAT:- Considering the various aspects recorded by the authorities below, the Bench are of the view that the rejection of books of account is justified. However, with regard to claim of estimation of net profit of business other than the grit business, the Bench find that the ld. CIT(A) has relied on the findings of the ITAT in the case of A.Y. 2010-11. However, in the decision for the A.Y. 2011-12, the ITAT has found that the declared profit of the assessee was more than 8% of the gross receipts subject to deduction on account of depreciation and interest, therefore, the addition was deleted. G.P. rate for the year under consideration was better than the earlier two immediate preceding years. Net profit @ 8% of gross receipts subject to further deduction on account of depreciation and interest are held to be reasonable. Such view has been held by the Hon’ble Rajasthan High Court in the case of CIT Vs Jain Construction Co & ors.[1999 (9) TMI 26 - RAJASTHAN HIGH COURT] . In assessee’s case, the net profit rate subject to deduction of depreciation and interest comes @8.09% of the gross receipts, which is more than 8%. Wherever even books of account are rejected by the Assessing Officer then also no trading addition is required to be made as held in the case of CIT Vs Gotan Lime Khanij Udhyog [2001 (7) TMI 19 - RAJASTHAN HIGH COURT] . CIT(A) was not justified in sustaining the part addition in both business of the assessee. Hence, appeal of the assessee stands allowed.
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