TMI Blog2013 (12) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... other sources - Also the income should be assesseed by applying net profit rate of 8% to this income - Partly allowed in favour of assessee. Disallowance u/s 40(a)(ia) - Held that:- Following CIT V/.s. Banwari Lal Banshidhar [1997 (5) TMI 37 - ALLAHABAD High Court] - No disallowance could be made in view of the provisions of Section 40A(3) read with rule 6DD(j) of the Income-tax Rules, 1962, as no deduction was allowed to and claimed by the assessee - When the gross profit rate was applied, that would take care of everything and there was no need for the Assessing Officer to make scrutiny of the amount incurred on the purchases made by the assessee - Decided against Revenue. - ITA No. 1864/Hyd/11, ITA No.1898/Hyd/11 - - - Dated:- 18-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.1,15,30,536. 3. The assessee has filed the appeal before us raising as many as six grounds, but the basic issues which arise for consideration are the following- (a) Estimation of income @ 8% of the gross contract receipts; (b) Assessment of the amount of Rs.43,48,636 disclosed by the assessee as business income, under the head 'other sources' 4. At the time of hearing before us, the learned Authorised Representative for the assessee appearing before us, submitted that he is not pressing the grounds contesting the estimation of income at 8%. Those grounds are accordingly rejected. As for the other grounds relating to the second issue of assessment of Rs.43,48,636 under the head 'other sources', it is seen that the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that as the interest income has already been charged to tax at the rate of 30% under business income, the same cannot be charged to tax again. In support of such contention, the learned Authorised Representative for the assessee relied upon a decision of the Hon'ble Madhya Pradesh High Court, in the case of Ferro Concrete Construction (India) (P) Ltd. V/s. CIT(290 ITR 713). 6. The learned Departmental Representative on the other hand, supported the order of the CIT(A). 7. We have considered the submissions of the parties and perused the orders of the Revenue authorities. As can be seen from the finding of the CIT(A) in paragraph 6.7 of his order, the CIT(A) does not dispute the fact that the income from metal account, miscellane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio laid down by the Hon'ble Madhya Pradesh High Court in that case, we direct the Assessing Officer to treat the income from metal account amounting to Rs.39,51,350 and miscellaneous income of Rs.2,28,800 as income from business, and part of the business turnover of the assessee and accordingly apply the net profit rate of 8% to this income also. So far as interest on fixed deposit of Rs.1,58,486 is concerned, we uphold the view taken by the lower authorities in treating the same as income from other sources. However, the Assessing Officer should see to it that the same income is not taxed twice. Consequently, assessee's grounds on this issue are partly allowed. 8. In the result, assessee's appeal, ITA No.1898/Hyd/2011, is partly allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions can be made on account of statutory disallowance. In support of such contention, the learned Departmental Representative relied upon a decision of the Visakhapatnam Bench of the Tribunal in the case of K. Venkata Raju V/s. Additional CIT in ITA No.312/Vizag/2008 dated 3.5.2013 12. The learned Authorised Representative for the assessee on the other hand, contended that once income is estimated by rejecting the books of account, there can be no separate addition/disallowances under the provisions contained under S.30 to S.43. In support of such contention, the learned Authorised Representative for the assessee relied upon the following decisions- (a) Teja Constructions (129 TTJ (Hyd)(UO) 57) (b) ITO V/s. Kenaram Saha and Subhash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under (headnote): "affirming the decision of the Tribunal, that no disallowance could be made in view of the provisions of Section 40A(3) read with rule 6DD(j) of the Income-tax Rules, 1962, as no deduction was allowed to and claimed by the assessee. When the gross profit rate was applied, that would take care of everything and there was no need for the Assessing Officer to make scrutiny of the amount incurred on the purchases made by the assessee." The above decision of the hon'ble Allahabad High Court would be squarely applicable to the case of the assessee. When a net profit rate is applied, there remains no scope for further disallowance of any expenditure. In view of the above, we respectfully following the above decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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