TMI Blog2012 (8) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... s for dis-allowance of claim of depreciation. It is not merely question of rejection of books of account, but the issue of application of 10% profit rate as accepted by the assessee himself is based on the incriminating documents found during survey and the non-maintenance of basic records to indicate true and correct profit, therefore, plea of the assessee to the effect that the rate of profit decided by the AO in cases of other civil contractors should be applied, is of no substance where facts are materially different - Decided against assessee - I.T.A.No. 106/Ind/2012 - - - Dated:- 12-6-2012 - SHRI JOGINDER SINGH, AND SHRI R.C.SHARMA, JJ. Appellant by : S/Shri S. S.Deshpande B.L. Gupta, Advocates Respondent by : Shri Darshan Singh, CIT DR O R D E R PER R. C. SHARMA, A.M. This is an appeal filed by the assessee against the order of CIT(A) dated 05.01.2012 for the assessment year 2007-08. 2. Rival contentions have been heard and records perused. The brief facts of the case are that the assessee is an individual engaged in the business of civil contract with government/government undertakings in M.P. The assessee filed his return showing income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory deduction on account of depreciation is to be allowed in terms of CBDT circular dated 1st February, 1972. 6. On the other hand, the ld. CIT DR relied on the findings recorded by the lower authorities for estimating profit at 10% which was based on the statement recorded during course of survey after considering the incriminating documents found at assessee s business premises. 7. We have considered the rival submissions and have gone through the orders of the authorities below. We had also deliberated on the various case laws cited by ld. Authorized Representative and ld. CIT DR during the course of hearing before us in the context of factual matrix of the case. From the record, we found that the assessee is a civil contractor and during the course of survey, statement of the assessee was recorded in respect of various incriminating papers relating to business of civil contractor found at business premises. In his statement dated 20.01.2009 he has been specifically confronted regarding incriminating documents and on the basis of such incriminating papers and vouchers, the assessee had admitted his net income @ 10% of the gross receipts. 8. The CIT(A) has categorically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayments were made. Similarly, as per answer to Q. No.8 (c), the appellant admitted further illegal payments of Rs.28,00,000/- as per documents inventoried as LPI-8 page 41. In Q.No.9 as per document D-2 page 2, the appellant further admitted such illegal payments. The perusal of statement of Shri Rajendra Kumar Garg indicates that such statement was recorded in a systematic and elaborate manner. Specific questions have been asked and the appellant has also replied in a specific manner. The statement is contained in 7 pages and each page is signed by the appellant as well as the official in whose presence statement was recorded. It is further noticed that the appellant has been confronted on the vital incriminating document on which he has given very specific replies. In the last, the appellant has admitted to have read the whole statement and that such statement was given in complete conscious without any duress. It also appears that the counsel of the appellant was also available on the premises when the statement was recorded as the AR has further stated that post dated cheques were filled in by the appellant. These facts will indicate that prima facie it is not a case of coercio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents, inventoried as LPI-8 page 164 and it was also admitted that such illegal payments were adjusted in the expenses shown on account of contract business. Similarly, as per impounded documents inventoried as per LPI-8 page 41, illegal payment of Rs.28.00 was admitted. As per impounded documents D-2, page-2 also illegal payment was accepted. The appellant during the appellate proceedings also admitted irregularities in the maintenance of books of account. The documents impounded during survey definitely indicated that the books of account maintained by the appellant were not reliable and such glaring defects necessitated application of provisions of section 145(3) of IT Act. Therefore, keeping in view such glaring defects in the books of account and the statement of the appellant during the course of survey with reference to the incriminating documents discussed hereinabove, the books of account of the appellant were not true and complete and accordingly, the Assessing Officer has rightly applied provisions of section 145(3) of IT Act and taken net profit rate of 10 % on contract receipts as agreed by assessee himself, and the same was correctly confirmed by the ld.CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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