TMI Blog2011 (1) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in confirming the book results. For this, assessee has raised the following ground No.1:- (I) Rejection of Book Result:- (1) The learned Commissioner of Income-tax (Appeals) erred in confirming rejection of Book Result disregarding the fact that the books and records were destroyed in floods. (2) The appellant submits that mere fall in gross profit without pointing out any specific defect cannot be considered sufficient for rejection of Book Result. On the facts and in the circumstances of the case and as per law, the Book Result ought to have been accepted. 3. At the outset, it is noticed from the orders of lower authorities that assessee s main plea was that the books of account have been destroyed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04/-. For this, assessee has raised the following ground No.2:- (II) Estimate of Gross Profit:- (1) The learned Commissioner of Income-tax (Appeals) erred in confirming estimation of gross profit at 33.97% when the gross profit was better than that shown in A.Y. 2004-05 and in respect of fall from earlier year, reasons were furnished and which have not been rejected. (2) On the facts and in the circumstances of the case and as per law, the addition made by estimating gross profit at ₹ 14,61,504/- may be deleted. 5. The brief facts leading to the above issue are that the assessee is engaged in the business of civil and mechanical contractor. The Assessing Officer during the assessment proceedings required the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %, 45.02% and 27.88%, for AY.2006-07, 2005-06 A.Y.2004-05 respectively. The average profit of last three years comes to 33.95% 3.15 In light of the above, the undersigned of the considerate opinion that the profit in second option should be taken as the profit of this year also, that is at 33.97%. This leads to estimation of gross profit at flat 33.97% in following manner: In Rs. Particulars A.Y. 2006-07 Turnover 29496133 G.P. Margin Rs.85,58,332 i.e.@ 29.02 Estimated G.P @ 33.97 ₹ 1,00,19,836 Difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.35 1745630 3.44 210111 0.66 Other deductions 2010522 0 Total direct expenses 20937802 31302612 23687145 Gross profit 855833 19448426 8314490 Gross Profit % 29.02 38.32 25.98 The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005-06 45.02 2006-07 29.02 The average of the above should be taken as GP and accordingly re-compute the income. This issue of assessee s appeal is allowed but for statistical purposes for re-computation of income with the above direction. 7. The next issue in this appeal of assessee is against the order of CIT(A) in confirming the disallowance of 5% expenses. For this, assessee has raised the following ground No.III.:- (iii) Disallowance of Expenses:- (i) The learned Commissioner of Income-tax (Appeals) erred in confirming disallowance of 5% of expenses across the board when the Books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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