TMI Blog2015 (6) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1 lac without confirming the rejection of book result U/s 145(3) of the Act. The defects pointed out by the Assessing Officer are sufficient to reject the book result. However, we find that AO had estimated the income higher side and had not compared the past history of the case and also had not made any comparison with another case of similar line of business. Therefore, we confirm the addition @ 6% net profit subject to interest and remuneration to the partners. The Assessing Officer is directed to recalculate the income as per above findings given by the Bench. - Decided partly in favour of revenue. - ITA No. 1082/JP/2011 - - - Dated:- 27-3-2015 - R P Tolani, JM And T R Meena, AM,JJ. For the Appellant : Mrs Neena Jeph (JCIT) For the Respondent : Shri R K Bhalla (CA) Shri Rajender S Meel (CA) ORDER Per T R Meena,AM. This is an appeal filed by the department against the order dated 16/09/2011 passed by the learned CIT(A)-III, Jaipur for A.Y. 2008-09. The effective grounds of appeal are as under:- (i) the CIT(A) has passed a perverse order in restricting the trading addition of ₹ 34.39 lakh, simply, on the ground that the G.P. rate of 5.08% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was replied by the assessee vide letter dated 12/08/2010 and stated by the assessee that the work has been carried out in slums and remote areas where cost of material/loading and unloading transportation charges are higher. It is further explained that the assessee's work was of different nature requiring lot of digging and filling work. It is argued that purchase order rates were same in earlier two years but expenditure had increased but the submission was without any corroborative evidence. Similar many of the expenses particularly the expenses under head other direct expenses, water charges, fooding charges, office rent etc. are not without proper vouchers but also unreasonably high and payment is made mostly in cash. After considering above defects in the books of account, the learned Assessing Officer estimated the N.P. rate @ 10% and addition of ₹ 34,39,982/- was made by the Assessing Officer. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the learned CIT(A), who had allowed the appeal fully by observing as under:- 2.3 I have carefully gone through the observations of the A.O. and relevant submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t have became insignificant and redundant. Accordingly, the act of rejection of the books of account U/s 145(3) on the part of the A.O. is held as untenable and unwarranted, thus cancelled accordingly. Similarly, thought, the appellant has shown substantial higher profit ratio (i.e. 5.08%), then the previous year (5.06%), however, an ad hoc addition of ₹ 1,00,000/- is found essential to be sustained to take care of all the incriminating aspects and leakage of income, if any, due to the shortcomings pointed out by the A.O. related to the issue under consideration. Accordingly, the trading addition up to ₹ 1,00,000/- made u/s 145(3) is sustained and balance is deleted. Consequently, this ground of appeal is partly upheld. 4. Now the Revenue is in appeal before us. The learned D.R. vehemently supported the order of the Assessing Officer and argued that number of deficiencies were found in the books of account including opening and closing stock. Payment through cash, self made vouchers, which were verified by the Assessing Officer and detailed findings have been given in the assessment order and these defects are sufficient in case of civil contractor to reject the boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the assessee is better than the immediately preceding year. The net profit has been increased from ₹ 6,37,917/- to ₹ 39,70,558/-. Gross receipt has also been increased from 2.62 crores to ₹ 7.81 crores. The various courts have held that if the assessee has declared better G.P. compared to preceding year, no addition can be made. The case laws referred by the A.R. are as under:- 1. ITO Vs. M/s Bhagirath Kaswan Contractor (ITA No. 404/Jodh/2013). 2. Addl.CIT Vs. Lakhani Shoes Limited 34 Tax Worls 32 (JP) (ITA No. 173/JP/2000). 3. J.C. Sharma Vs. ITO 33 Tax World 80 (JP) (ITA No. 258/JP/1996). 4. Brij Bhushan Lal Praduman Kumar Vs. CIT (1978) 115 ITR 524 (SC). 5. CIT Vs. Popular Electric Co. (P) Ltd. (1993) 203 ITR 630 (Cal.). 6. Ashok Kumar Co. Vs. ITO (2004) 2 SOT 518 (Asr.) The learned Assessing Officer had not pointed out any specific defect or discrepancy in the books of account maintained by the assessee, which is question of fact. The learned CIT(A) had found that the account maintained by the respondent were neither defective nor incomplete. Even the Assessing Officer has not any fault as such with the system of accounting being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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