TMI Blog2015 (7) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... k, the assessee has earned 10.38% from sub contract work and therefore profit from sub contract work cannot be at par with profit from contract work. The Hon'ble Bombay High Court in the case of R.B. Jessaram Fatechand (1969 (7) TMI 10 - BOMBAY High Court ) has held that in the case of cash transaction where delivery of goods is taken against payment, it is hardly necessary for the seller to bother about the name and address of the purchaser. The account books of an assessee cannot therefore be rejected merely on the ground that the particulars of the assessee are not mentioned in the case of cash transactions. The Hon'ble Punjab & Haryana High Court in the case of Om Overseas (2008 (3) TMI 44 - HIGH COURT PUNJAB AND HARYANA a) has held that in absence of any specific defects pointed out in the books of account, the book results cannot be rejected merely on the ground that there is fall in profit ratio. Since in the instant case, we have already held that the defects as pointed out by the Assessing Officer are trivial in nature which do not call for rejection of the book results, therefore, consideration the totality of the facts of the case and in view of our discussion in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails of work completed by them are not mentioned. Further, most of the signatures placed on register were in English which according to the AO seems to be doubtful. Further, no independent verification can be made in the available circumstances. Therefore, he was of the opinion that the wages claimed at ₹ 1,83,01,225/- as against ₹ 1,30,66,346/- in the preceding year cannot be justified. Similarly, from verification of the transport bills, he noted that the bills do not show Telephone No., Registration No., detailed addresses etc. The transport bills do not show the mode of Vehicle, Vehicle No. etc. Therefore, he was of the opinion that independent verification cannot be made. Further, the transport bill does not support voucher of Hamali expenses. He therefore was of the opinion that the transport charges amounting to ₹ 6,73,606/- during the impugned assessment year as against ₹ 2,92,377/- in the preceding assessment year seems very excessive. The Assessing Officer similarly noted on verification of sub contract bills that most of the bills show similar entries like Cement, Concrete for Canal site, laying chip masonary etc. Further, some of the bills rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adoption of GP profit @20% adopted by the Assessing Officer as against 13.60% by the assessee is concerned he observed that the assessee was not able to explain the fall in GP rate from 19.26% to 13.60%. He observed that there is some truth in the explanation of the assessee that due to increase in certain overhead expenses as well as royalty payment there was decline in profit. However, the assessee could explain only to the extent of ₹ 33,43,403/- towards fall in gross profit due to such higher royalty payment and increased overhead expenses. Thus, the difference of ₹ 21,65,495/- still remains unexplained. Therefore, he was of the opinion that if net profit is adopted at 8% then the net profit will be ₹ 69,50,123/- as against net profit of ₹ 47,21,819/- leaving the difference of ₹ 22,28,304/-. However, considering the fact that certain percentage has been retained by M/s. Right Construction from whom the assessee has received some contract work, he held that a lumpsum addition of ₹ 20 lakhs will meet the ends of justice. He accordingly directed the AO to restrict the addition of ₹ 20 lakhs. 6. Aggrieved with such part relief given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster do not give the complete address of the labourers and some of the signatures are in English, (2) the transport expenses do not give the mode of transport and vehicle number etc., and (3) the payment to sub contractors are not fully verifiable due to incomplete address and most of the payments are made by cash. 8. So far as the signature of the labourers in English is concerned he submitted that the same cannot be a ground for rejection of the book results. Now-a-days even highly educated persons are doing labour work, therefore, merely because some of the labourers have signed in English the same cannot be a ground to disbelieve the wage register. So far as the transportation expenses are concerned the Ld. Counsel for the assessee drew the attention of the Bench to pages 76 to 82 of the paper book and submitted that out of the transportation charges of ₹ 6,72,606/- the major amount is paid to Shri Khilari Balasaheb K. He submitted that his PAN number was given and TDS of ₹ 13,604/- was deducted from the bill amount. His complete address was also given. Referring to the bills issued by him he submitted that since Shri Khilari Balasaheb has issued the bills giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The assessee has fully explained all the details. Referring to the copy of the assessment order for A.Y. 2012-13 he submitted that the AO has accepted the book results and has not gone for any estimation. Referring to the decision of Hon'ble Punjab Haryana High Court in the case of CIT Vs. Om Overseas reported in 315 ITR 185 he submitted that in absence of specific defect in the books of account the lower profit cannot be a ground for rejecting the book results. Referring to the decision of the Hon'ble Bombay High Court in the case of R.B. Jessaram Fatechand (Sugar Department) Vs. CIT reported in 75 ITR 33 he submitted that the Hon'ble High Court in the said decision has held that books of accounts cannot be rejected and profit estimated merely on the ground that address of the assessees are not mentioned in the case of cash transactions. He accordingly submitted that the CIT(A) was not justified in upholding the rejection of books of account and sustaining addition of ₹ 20,00,000/-. 12. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO. He submitted that the AO had categorically given a finding that the book resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons totalling to ₹ 13,210/-. Further, complete address of all the 5 transports are given. Therefore, under these circumstances, we are of the considered opinion that the Assessing Officer should not have disbelieved the transportation charges. Similarly, the other ground on which the AO rejected the books of account is that some of the signatures are in English in the wage register and that is an incomplete wage register since the work done by the labourers are not mentioned. We find the Ld.CIT(A) has already rejected the contention of the AO regarding signature in English and the Revenue is not in appeal. Further, wages register usually do not give the nature of work done. Address of the labourers in some registers are optional. This in our opinion cannot be a ground for rejecting the book results. 15. So far as the payment to the sub contractors are concerned we find from pages 83 and 84 of the paper book that the assessee has given complete address of the 17 labour contractors giving their name, address, etc. The assessee has given PAN Numbers in all cases and TDS has been deducted from such payments. Under these circumstances we do not find any justification for rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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