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2019 (11) TMI 700 - AT - Income TaxRejection of books of accounts - NP determination - AO applied 8.5% Net profit rate - HELD THAT:- CIT (A) followed the finding of the ITAT Jodhpur based on past history. Department of Income Tax also preferred an appeal against the order of the ITAT before the Hon’ble Jurisdictional High Court which was dismissed by the Hon’ble High Court. The ITAT Jodhpur mentioned “From the above chart it is clear that for A.Y. 2010-11, the assessing officer had applied N.P. Rate at 8.50%, however, the ITAT Jodhpur Bench has accepted the declared result of 1.85%, which was also approved by the Hon’ble Jurisdictional High Court. AO has not referred any example of other businessmen or traders. So, past history of the assessee is best example. So far Grounds (i) and (ii) are concerned, Ld. CIT(A) rightly applied Net Profit Rate 1% by increasing from 0.92% to 1% N.P. Rate. Accordingly, we do not find any infirmity in the order of the ld. CIT(A) for applying the NP rate of 1%. In the result, grounds taken by the revenue are dismissed. Addition made U/s 40(a)(ia) and 40A(3) - payment made for JCB hire charges - HELD THAT:- In this Act, the JCB is included in Goods Carriage. According to Section 194C (6), no deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of contract during the course of business of plying, hiring or leasing goods carriage, on furnishing of his PAN Number to the person paying or crediting such sum so that assessee company was not liable to deduct TDS as the JCB owner has submitted his PAN for non-deduction of TDS. Coordinate Bench in various cases have held that when the profit is estimated by rejecting books of account, no disallowance U/s 40(a)(ia) of the Act is to be made. Disallowance made u/s 40A(3) we found that the assessee has made the payment to the parties as they insist for payment on the very day. Due to genuine hardship of the parties, assessee has to pay in cash. Technically, the payment are covered by the provisions of Section 40A(3) but the same was considered along with Rule 6 DD (b) as it existed then which duly provided for the genuine hardship that may be caused to the taxpayer. Nowhere the A.O. found that the payment was not genuine or that the payment was not for the purpose of business. In the case of CIT vs Smt. Santosh Jain [2006 (8) TMI 167 - PUNJAB AND HARYANA HIGH COURT] , it was held that where the income of the assessee has been computed by applying a Gross Profit Rate, there is no need to look into the provisions of Section 40A(3) of the Income Tax Act, 1961, as applying the Gross Profit Rate takes care of expenditure otherwise than by way of crossed cheques also. Following the above judicial pronouncements, we do not find any merit in the addition made by the A.O. U/s 40(a)(ia) and 40A(3) of the Act. Accordingly, we confirm the action of the ld. CIT(A) in deleting the disallowance so made by the A.O.
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