GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (8) TMI 1091 - ITAT JAIPUR

2015 (8) TMI 1091 - ITAT JAIPUR - TMI - Estimation of net profit - assessee did not produce the complete books of account and he filed an affidavit that there was a dispute with the accountant and he was not given the books of account. - Held that:- On verification of asset disclosed by the assessee, he has only Jeap. It appears that this computer owned by the somebody else, therefore, the claim of assessee that accountant had taken books of account appears to be false. Accordingly, we confirm t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unt - undisclosed income of the assessee - Held that:- On verification of the balance sheet of the assessee, it is found that bank account in SBBJ, Gangapur City, SBBJ, Sawai Madhopur and FDR with PNB, Gangapur City has been disclosed by the assessee. The ld CIT(A) has considered these bank accounts and no adverse inference has been drawn by him except the addition of ₹ 9,026/-. This Bench has confirmed the addition @ 9% C.P., therefore, no addition is required to be made on account of any .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

revenue.

FDR interest treated as income from other sources - Held that:- Undisputed fact revealed from the order of the ld CIT(A) and form No. 35 that this ground has not been raised before the ld CIT(A). Further before us, no application for additional ground has been made by the AR of the assessee. Therefore, this ground is not maintainable and we accordingly dismiss the same. - Decided against assessee. - ITA No. 338/JP/2013, ITA No. 284/JP/2013 - Dated:- 11-8-2015 - SHRI R.P. TOL .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

king Net profit ratio 12.50% instead of 5.66% as declared by the assessee and CIT(A) has erred in law as well as in facts in sustaining the same by reducing net profit from 12.50% to 9%. 2. The ld A.O. and CIT(A) has erred in law as well as in fact in wrongly considering FDR interest as income from other sources without considering the direct nexus between interest paid to banks and interest received on FDRs. Ground of ITA No. 284/JP/2013 On the facts and in the circumstances of the case, the ld .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s appeal as well as revenue s appeal are against arbitrarily taking net profit ratio 12.50% instead of 5.66% and restricting the addition of ₹ 14,87,696/- by applying NP rate of 9% as against total addition of ₹ 20,66,244/- made by the A.O. by applying NP rate of 12.50%. The ld Assessing Officer observed that the assessee filed return for A.Y. 2008-09 on 25/10/2008 at ₹ 9,02,010/-. The case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed for hearing on 03/8/2010. There was no response from the assessee on this date also. Again the case was refixed on 17/08/2010 through notice U/s 143(2) and case was refixed for 17/08/2010. The assessee s AR alongwith assessee s son were appeared but they again sought adjournment for 26/8/2010. On 26/08/2010 both the persons again appeared and partly filed information before the Assessing Officer and case was adjourned for 02/9/2010. On 02/9/2010 nobody appeared from the side of the assessee a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed for 15/10/2010. On 15/10/2010 again the assessee did not appear. On 26/10/2010 notice U/s 143(2) was issued for fixing the case for 08/11/2010. In response to this notice, the authorized representative Shri Arun Kumar Agarwal, son of the assessee appeared before the Assessing Officer and he requested to produce complete books of account with vouchers for verification and case was adjourned for 15/11/2010. Notice U/s 143(2) was again issued on 22/11/2010 and assessee was asked to made complian .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was a dispute with the accountant and he was not given the books of account. Therefore, he is unable to produce the complete books of account for verification. The assessee was agreed to assess his income @ net profit of 8%. The ld Assessing Officer made assessment in absence of complete books of account, non-cooperation of the assessee in producing the bills/vouchers and he decided the case. He relied on the decision of the Hon ble Rajasthan High Court in the case of Shri Ram Jhanwar Lal Vs. IT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bserving that the Assessing Officer as well as the ld CIT(A) are right in confirming the rejection of book result. However, in his opinion by considering the turnover of the assessee, a net profit rate of 9% was considered reasonable. 4. Now both are in appeals before us. The ld AR of the assessee has submitted that the assessee is a civil contractor and having work for government department like PHED and Marketing Board and has declared a net profit rate of 5.66% on the gross receipt of ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

egarding purchase of raw materials. However, certain details such as books of account, stock register could not be produced by the assessee for the reason of an ongoing dispute with the accountant of assessee who is in the possession of assessee s books of account. This fact was duly submitted before the ld A.O. alongwith an affidavit in support thereof which is part of the record and duly acknowledged by ld A.O. in his assessment order. It was further requested that the income of the assessee b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has not considered the audit report where no defects had been pointed out by the auditor and he estimated the net profit @ 12.5% without allowing the deduction on account of interest and depreciation resulting into the application of NP rate, which is more than double of the NP rate declared by the assessee. While doing so, the ld A.O. completely brushed aside the genuine reason pleaded by assessee that the books of account owing to the ongoing dispute with assessee s accountant and also ignored .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ased. There was a tough competition in awarding the contract at lower rate compared to rate received in the preceding year, which ultimately resulted into lowering the profit of the assessee. The ld Assessing Officer relied upon the case, which are distinguishable on facts and circumstances. Finally he submitted that 9% rate confirmed by the CIT(A) is very higher side and same is deserved to be reduced to a reasonable profit rate subject to statutory allowing of depreciation and interest. 5. At .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

18.81%, which has been gone down to 11% during the year under consideration. Similarly, the net profit in preceding year was 9.1%, which has also gone down to 5.66%, the assessee has not explained any reason. Therefore, order of the Assessing Officer may please be confirmed. 6. We have heard the rival contentions of both the parties and perused the material available on the record. As per audit report, the assessee maintained books of account on computer. However, the assessee had claimed that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as well as C.P. had gone down during the year. The affidavit filed by the assessee is not without any doubt as books were maintained in computer, which cannot be taken by the assessee. On verification of asset disclosed by the assessee, he has only Jeap. It appears that this computer owned by the somebody else, therefore, the claim of assessee that accountant had taken books of account appears to be false. Accordingly, we confirm the net profit @ 9% subject to third party interest and depreciat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessing Officer observed that he scrutinized copy of bank account of the assessee, the same was maintaining in the Punjab National Bank (in short PNB), Gangapur City having bank account No. 7153, in which various deposits were made. The account was partly credited through cash deposit and partly from clearings. As the assessee had not produced complete books of account, purchase and sales and other expenses vouchers for verification to the Assessing Officer, therefore, it was difficult to verif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

but the bank had also not supplied the details of these deposits. He finally concluded that these undisclosed cash deposits is also from the contract business, therefore, he applied 12% C.P. rate on ₹ 32,64,896/- and made addition of ₹ 4,08,112/- in the income of the assessee. 8. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who has partly confirmed the addition by observing that most of the entries were transfer entries .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al before us. The ld DR has vehemently supported the order of the Assessing Officer and argued that before the Assessing Officer, the assessee has not submitted any reply in response to credit entry made in the bank account maintained with PNB. The ld CIT(A) has also accepted the assessee s argument and evidences even without providing any opportunity to the Assessing Officer, therefore, the ld CIT(A) was not justified in deleting the addition of ₹ 3,99,086/-. 10. At the outset, the ld AR .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

No. 51034533452 and account No. 51029310284 and another account maintained with Union Bank of India being account No. 498004010012043. The assessee has submitted these evidences before the ld CIT(A) and has drawn our attention on page No. 30 to 52 of the paper book and argued that these credit entries were disclosed by the assessee. Therefore, order of the ld CIT(A) may please be accepted. 11. We have heard the rival contentions of both the parties and perused the material available on the reco .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n ble Rajasthan High Court in the case of CIT Vs. G. K. Contractor 19 DTR 305 (Raj) wherein the Hon ble Jurisdictional High Court held that when net profit is estimated by the Assessing Officer by rejecting the book result U/s 145(3) of the Act, no separate addition can be made on account of cash creditor, which is squarely applicable in the case of the assessee. As we have already decided the net profit @ 9% in the case of assessee, therefore, other additions cannot be made. Accordingly, revenu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dition of ₹ 7,98,000/- in the total income of the assessee. 13. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal by observing that the assessee had disclosed net profit of ₹ 9,35,596/- @ 5.66% C.P. as against this he confirmed the addition at ₹ 14,87,697, which resulted in net addition of ₹ 5,61,126/-. There was cash withdrawal from the bank account of the assessee and net addition uphe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version