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TMI Blog2012 (10) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... to apply the N.P. rate 4% on the total receipt as against 8% applied by the A.O. 1a. While doing so, the Ld. CIT(A) has failed to appreciate that the A.O. applied the N.P. rate of 8% after examining the books of account and duly established hat the receipts on account of sale of old dismantled material had been suppressed, expenditure on account of wages had been inflated and stock particulars were not verifiable. 2. It is prayed that the order of the ld. CIT(A) be set-aside and that of the A.O. be restored. 3. The appellant requests for leave to add or amend or alter the grounds of appeal before the appeal is heard and disposed of." 3. In the C.O. the assessee has raised following grounds: "1. That on the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.09.2009. In response to the said notices, the authorized representative of the assessee attended the proceedings before the A.O. from time to time and furnished all necessary documentary evidence alongwith the books of account, bills and vouchers in support of expenses claimed etc. The AO examined the same. After examining all necessary documentary evidence filed by the assessee, the AO found that during the year under consideration, the assessee executed two contracts of M.E.S. as per profit & loss account of the assessee annexed with the return of income on receipts of Rs.5,93,57,918/-. During the year under consideration, the N.P. of Rs.17,07,660/- has been returned, which gave the net profit rate of 2.87% only as compared to 4.38% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd incomplete and not reflecting true and correct assessable income of the assessee-firm by inflating all expenses and suppressing the receipts. 6. The AO has relied upon various case laws on the subject and used the same against the assessee, which is at pages 13 to 15 and lastly the AO held that the Hon'ble Jurisdictional High Court as well as the ITAT have upheld the application of N.P. rate @ 10% to 12% in the cases of civil contractors and the assessee is also not entitled to any further deduction on account of depreciation. He finally held that in the case of the assessee under consideration, the turnover is much more than Rs.40 lacs. The N.P. rate is extremely low and therefore, it would be fair and reasonable to estimate N.P. rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receding assessment year. The assessee has furnished its reply dated 4th Nov., 2009, which was reproduced by the AO in para 3 of his order. The AO having still doubt on the subject and asked various questions for which the assessee has given reply with the support of evidence. No doubt, there are certain wages register regarding booking of labour etc. are not verifiable. In other words the assessee has not verified the same to the satisfaction of the A.O. Therefore, the AO has rightly applied the provisions of section 145(3) of the Act, for the reasons discussed in detail in paras 4(a), 4(b) & 4(c) in the assessment order and he rejected the books of account. The ld. first appellate authority has also rightly upheld the action of the A.O. b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate authority has reduced the N.P. rate of 4% to the gross receipts computed by the A.O. instead of 8% applied by the A.O. on the basis of previous assessment year and especially the increase in the rates of the material used by the assessee in its construction business. The ld. first appellate authority has discussed each and every aspect on the issue in dispute and lastly has rightly directed the A.O. to apply N.P. rate @ 4% to the gross receipts computed by the A.O. in order to meet ends of justice. 9.2. Keeping in view the facts and circumstances of the case explained above and the well reasoned order passed by the ld. first appellate authority, we are of the considered view that no interference is called for in the well reasoned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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