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2016 (2) TMI 190 - AT - Income TaxRejection of books of accounts - adoption of NP rate of 9% - Held that:- As ample opportunities have been given to the assessee to produce the books of accounts, the assessee being contractor, is statutorily bound to maintain bills, vouchers, cash book, stock register etc. and in the absence of maintenance of the said records, the AO is left with no option but to invoke section 145(3) of the IT Act and estimate the income of the assessee. Even otherwise the assessee had admitted before the authorities below for rejection of books of account and application of 9% NP rate on contractual receipts subject to depreciation and interest. In our view, once the complete books of account have not been produced, the AO was right in rejecting the books of account and has righty done so. Even otherwise, the assessee has no legs to stand that the books of account and the NP rate of 9% has been wrongly decided by the AO. The admission of the assessee is the best evidence against the assessee. Once the assessee himself has admitted the imposition of 9% NP rate subject to depreciation and interest, the AO was left with no other option but either to accept the offer or to determine the N.P. on the basis of comparable material on record or on the basis of past history. - Decided against assessee Addition on account of interest income from FDRs - Held that:- We are in agreement with the ld. A/R for the assessee that the FDRs were required to furnish performance guarantee to get a contract awarded in assessee’s favour and to procure said guarantee, it had kept amount in fixed deposit. Therefore, the income earned on this account cannot be treated as Income from other sources. The contention of the assessee are supported by various judgments relied on by ld. A/R. We find that the decisions cited by ld. CIT (A) are not applicable to the facts of the assessee’s case. We, therefore, taking into consideration various judgments mentioned above, deleted the additions made by the AO. - Decided in favour of assessee Addition on account of taxi plying, on estimate basis - Held that:- AO has not given any basis for making this addition. Therefore, we do not find any justification in the order of the AO for making this addition. The addition is thus deleted.- Decided in favour of assessee Disallowance on account of non business use of cars - Held that:- The assessee has not produced any log book in respect of running of vehicles, therefore, personal use of vehicles cannot be rued out. But the disallowance made by the AO is on higher side, therefore, we restrict the disallowance to ₹ 13,116/- (10%).- Decided in favour of assessee in part.
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