2012 (8) TMI 268

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..... ess of the order of the Ld. CIT(A). Ground nos. 1, 2 and 3 are taken up together. The facts giving rise to these grounds suggest that during the course of the assessment proceedings the A.O. was not satisfied with the correctness of the books of accounts. The A.O. was also not satisfied with the supporting evidences given for the claim of expenses under various heads which promoted the A.O. to reject the books of accounts and apply the net profit rate of 10%. When this matter was taken before the Ld. CIT(A), the Ld. CIT(A) found that the major head of expenses were water proofing expenses, wages, salary and allowance, Labour charges, Transportation and debris lifting and Conveyance expenses. The Ld. CIT(A) also found that the Auditors have .....

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..... jected by the Ld. CIT(A). However, as the claim of bad debts is allowable u/s.36(vii) and as the Ld. CIT(A) has directed to adopt the net profit rate of 7% , such estimation of profits covers all the expenses which are allowable u/s. 30 to section 37 of the Act. We do not find any reason to interfere with the findings of the Ld. CIT(A). Ground nos. 4.1, 4.2 and 4.3 taken up together are dismissed. 6. By ground nos. 5.1 and 5.2, the appellant has shown its grievance that the Ld. CIT(A) has recommended the ehhancement of income and at the same time, the Ld. CIT(A) has held that no deduction on account of interest to Bank of Baroda can be allowed. The facts of the case are that the assessee has claimed interest payable to Bank of Baroda amoun .....

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..... the case suggest that the assessee was having fixed deposit with Bank of Baroda, Bori Bunder Branch of which the assessee has not shown accrued interest in its books of accounts. However, at the same time, it was noticed by the A.O. that the assessee has debited an amount of Rs. 37,18,420/- as interest payable to Bank of Baroda. The A.O. sought an explanation from the assessee why it has not shown interest earned on fixed deposits. The assessee explained that the bank has filed a recovery suit against the assessee and as the matter is subjudiced before the DRT, the assessee will make necessary entries after receiving the orders from the DRT. This contention of the assessee was rejected by the A.O. who was of the opinion that since the ass .....

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