TMI Blog2005 (10) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... d in deleting the addition without reconciling the total cash available and the source of payments effected through cheques." 2. Briefly stated, the facts are that the assessee is a contractor and was engaged in the contracts awarded by PWD. In the return of income filed for the asst. yr. 1995-96, the assessee had shown net profit of Rs. 22,990 on contract receipts of Rs. 14,73,914. The net profit rate shown by the assessee was worked out to 1.55 per cent on contract receipts. The assessee was asked to produce books of account and other supporting evidences in respect of his income and expenses. The assessee submitted that he had not maintained regular books of account and, therefore, he was unable to produce the same. It was also submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee. The assessee ultimately filed a detailed letter dt. 26th Dec., 2000 in which he had submitted a fund flow statement for acquisition of new assets. However, the said fund flow statement was rejected. The AO made various additions on the basis of balance sheet under s. 69 of the Act. Thus, the AO made the assessment on a total income of Rs. 7,94,820 as against the returned income of Rs. 22,990 after making an addition of Rs. 6,64,788. 3. On appeal, the learned CIT(A) has deleted the additions made by the AO by observing thus: "I have considered the facts as pointed out by the AO as well as the explanations and submissions of the appellant and noticed that the additions made under s. 69 and others totalling to Rs. 6,64,788 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n year. The AO though assessed the business income of the assessee by applying s. 44AD but has also assessed other income as declared by the assessee. At the same time, he still proceeded to make the addition under s. 69 alleging that various investments in the purchase of car and other assets, repayment of liability reduction of sundry creditors, etc. have taken place during the previous year, the source of which was not explained. He has further submitted that the basic question that arises for consideration is that once the legislature itself allowed the assessee (a civil contractor) not to maintain any books of account and once the income in the case of such an assessee has already been assessed. what is the necessity to refer to other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going was also submitted before him and it is notable that in almost all cases, the outgoings were by account payee cheques only. Admittedly, the assessee was in respect of a substantial amount of Rs. 14.81 lakhs during the year from PWD Department as is evident from the certificate of TDS filed along with the return of income. Admittedly, these funds were available as deposited (from) time-to-time in the bank account and, therefrom, the same were drawn and utilized towards these outgoings. There were various other credits also. The AO has not at all doubted/denied the substantial receipts from the PWD Department nor it was shown that the same was utilized elsewhere. Thus, all the outgoings had to be treated fully explained, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Therefore, the provisions of the other sections of the Act would be independently applicable to the facts of a case even if the income of the assessee engaged in the civil construction business is assessed under s. 44AD of the Act. It is however seen that the CIT(A) has examined the source of purchase of the assets/reduction of liability in great detail and has found that the same has been duly explained by the assessee inasmuch as the same were mostly made by account payee cheques/drafts. The Department has not placed any material on record to rebut the said finding of the learned CIT(A). We, therefore, uphold the order passed by the CIT(A) deleting the addition made by the AO. 7. In the result, the appeal of the Revenue is d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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