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2015 (5) TMI 605 - AT - Income TaxG.P. addition - rejection of books of accounts - Held that:- Here in this case when existence of Consortium is not doubted the only issue remains if letting out the entire job to one of the party of the Consortium was a fact or not in the case and consequent payments made were excessive or not. For the same the appellant has placed heavy reliance upon the decision in the case of CIT vs. M/s.Ray Bel Consortium given by Hon'ble Bombay High Court [2012 (7) TMI 372 - BOMBAY HIGH COURT]. As gone through the same which deals with sec.40A(2) and supports the case of the appellant and hence of the considered opinion that books of account were not liable for rejection and there was no requirement for estimating profit when the same has been reflected on the actual basis. - Decided in favour of assessee. Disallowance of water charges and sewerage charges - AO disallowed water and sewerage charges treating that loss as reimbursement of expenses to sub-contractor. The AO also made addition of receivable on account of work contract tax refund - CIT(A) deleted the addition made by the AO by estimating profit at 10 of the gross receipts by observing that assessee is only special purpose vehicle in the form of joint venture - Held that:- Respectfully following the decision of the jurisdictional High Court in case of M/s Ray Bel Consortium (supra), we do not find any infirmity in the order of CIT(A) for deleting the addition made on account of profit estimation as well as disallowance of amount deducted by municipal corporation on account of water and sewerage charges. Further the CIT(A) has upheld the addition on account of tax refund which was deducted by Municipal Corporation of Brihan Mumbai. As per our considered view, the amount of income tax refund is not in the nature of income but was on account of refund of tax deducted by municipal corporation as no income accrued in respect of these contracts in assessee’s hand. This refund is also required to be passed on by the assessee to the two members of AOP. Accordingly, we direct the AO to verify the same and decide the issue afresh. - Decided in favour of assessee for statistical purposes.
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