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2016 (3) TMI 19 - ITAT JAIPUR

2016 (3) TMI 19 - ITAT JAIPUR - TMI - NP rate determination - CIT(A) has calculated NP rate @ 6.28% on given facts and figures by the assessee against 5.16% shown in the year under consideration - Held that:- AR had not controverted the finding given by the ld CIT(A). The ld AR had not challenged the rejection of books of account, therefore, book result cannot be accepted as such. The past history also showed that the assessee had shown much more NP rate even on higher gross receipts. The assess .....

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whereas this rate was 5.28% in preceding year, therefore, there was a substantial decline in NP rate during the year. The AR has not explained this reason alongwith evidence. Moreover, in the present case as well as there is rejection of books of account and the assessee has failed to maintain proper books of account namely stock register, labour charges register, qualitative details and record of the invoices, therefore, on account of record has rightly been rejected by the authorities below, .....

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f assessee - ITA No. 55/JP/2013, ITA No. 114/JP/2013, ITA No. 195/JP/2015 - Dated:- 27-1-2016 - SHRI T.R.MEENA, AM AND SHRI LALIET KUMAR, JM For The Assessee : Shri Mahendra Gargieya (Adv) For The Revenue : Shri O.P. Bhateja (Addl.CIT) ORDER PER T.R. MEENA, A.M. Appeals for A.Y. 2009-10 are cross appeals one filed by the assessee and the another by the revenue arise against the order dated 27/11/2012 passed by the ld CIT(A)-II, Jaipur and appeal for A.Y. 2011- 12 filed by the revenue arises agai .....

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invoking Sec. 145(3) of the Act. The provision so invoked being contrary to the provisions of law and facts, the same may kindly be quashed. Consequently the trading addition of ₹ 30,98,811/- kindly be deleted in full. Alternatively and without prejudice to above 2.2. ₹ 30,98,811/-: The ld CIT(A) further erred in law as well as on the facts of the case in applying the NP rate of 6.28% (after depreciation, interest & remuneration to partners) as against NP rate of 5.16% declared .....

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est granted of ₹ 1,04,059/- U/s 244A of the Act. The appellant totally denies its liability of charging. The interest so charged/withdrawn, being contrary to the provisions of law and facts, kindly be deleted in full. Ground of revenue s appeal ITA No. 114/JP/2013 (AY 2009-10):- On the facts and in the circumstances of the case and in law the ld CIT(A) has erred in:- (i) Adopting N.P. rate of 6.28% as against the N.P. rate of 8% applied by the A.O. notwithstanding the fact that rejection o .....

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es of the case and in law the ld CIT(A) has erred in deleting the addition of ₹ 19,46,289/- U/s 40(a)(ia) for non deduction of TDS U/s 194H on bank Guarantee Commission made by the A.O. 2. The ground No. 1 of assessee s appeal as well as revenue s appeal for A.Y. 2009-10 are revolving around rejection of books U/s 145(3) of the Income Tax Act, 1961 (in short the Act) and applied 8% NP rate in A.Y. 2009-10 and 15% NP rate in A.Y. 2011-12 and the revenue s appeals in both the assessment year .....

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7,66,24,588/-. Besides this the assessee had shown income from hire charged of ₹ 9,10,000/- and trade discount of ₹ 9,02,392/- in trading account. In A.Y. 2011-12, the assessee had shown net profit of ₹ 29,17,201 @ 3.4% on gross receipt of ₹ 8,57,89,385/-. The ld Assessing Officer further in both the years has held that the assessee had not maintained day to day stock register, consumption register, opening and closing inventory and also had not maintained any details, vo .....

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Assessing Officer on the basis of defects pointed out in assessment order had held that in assessee s case, no correct profit can be deduced, therefore, he applied Section 145(3) of the Act and proposed 8% NP rate for A.Y. 2009-10 and 15% NP rate for A.Y. 2011-12. In A.Y. 2009-10, the ld Assessing Officer has observed that the assessee had shown interest income of ₹ 19,73,753/- earned on FDRs, which has not been shown separately by it. The assessee had also not filed any detail of expense .....

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11- 12, which was found by him at higher side. The assessee has shown interest income in A.Y. 2011-12 at ₹ 6,27,176/-, which has been considered by the Assessing Officer as income from other sources, which has been included by the assessee in business receipt. The Assessing Officer finally calculated the income on the basis of net profit @ 8%. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who in A.Y. 2009-10 has held that bo .....

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ion to the partner. After considering various case laws and past history of the assessee, she applied N.P. rate of 6.28% instead of 5.16% shown by the appellant in A.Y. 2009-10. As much higher NP had been disclosed in earlier year on lower contract receipts that too after reducing/considering depreciation, interest and remuneration to partners. The estimation of net profit @ 6.28% in A.Y. 2009-10 after reducing/considering depreciation, interest and remuneration to the partners as in consonance .....

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7,75,26,980/-, which did not include hire charges income and interest income totaling to ₹ 28,53,755/- and this NP had been estimated by her with reference to the NP shown by the appellant himself after reducing depreciation, interest and remuneration to the partner. The hire charges and interest income was treated as income from other sources by the ld CIT(A) in A.Y. 2009-10. 3.1 In A.Y. 2011-12, the ld CIT(A) has held that net profit rate of 13.73% before depreciation, interest and remun .....

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educing the NP rate from 8% to 6.28% and treating the income from hire charges and interest as business income. In A.Y. 2010-11, the revenue was against not confirming the addition @ 15% NP rate and disallowance U/s 40(a)(ia) at ₹ 19,46,279/- for non-deduction of tax U/s 194H of the Act on bank guarantee commission. The AR of the assessee has submitted for A.Y. 2009-10 that the assessee has shown NP rate @ 5.11% after interest, depreciation and remuneration to the partner as against NP rat .....

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and interest on FDR and rent of machine was treated as income from other sources. He has also disallowed ₹ 54,264/- on account of deposit of employees contribution towards PF U/s 36(v)(a). The ld AR further submitted that when book result is rejected U/s 145(3) then the ld Assessing Officer should have estimated the income fairly, Section 145 of the Act does not confer blind power upon the Assessing Officer to estimate the income on whatever figure but the past history of the case is to be .....

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better than the last year even provisions of Section 145 is applicable. He further argued that the assessee trading results are better than the last year as appellant has shown net profit @ 5.11% compared to 5.09% including interest on FDR and rent on machine after interest, salary and depreciation. The Hon ble ITAT has considered this issue in assessee s own case in A.Y. 2007-08 in ITA No. 165/JP/2006 order dated 21/09/2007. In case of assessee in A.Y. 2007-08, the Hon ble ITAT has allowed the .....

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d on the decision in the case of CIT Vs Amrapali Jewels (P) Ltd. (2012) 65 DTR 196 (Raj.) for net profit rate. He further argued that the interest income of ₹ 19,43,753/- on FDR and ₹ 9,10,000/- from rent of machine is part of business receipt. The FDR were placed with various government departments. The appellant is bound to furnish performance security and to place various FDRs on account of guarantees. The appellant had declared hire charges income and interest income in P&L a .....

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d included receipt on account of hire charges and interest and others. The ld Assessing Officer rejected the book result U/s 145(3) of the Act and applied net profit rate @ 15% subject to interest. The ld CIT(A) deleted the addition by following the order of the Hon ble ITAT and ld CIT(A) in preceding year. He again reiterated the same argument made in A.Y. 2009-10 in fair estimation of income, the addition need not to be made even Section 145 is invoked, better results, better results even aver .....

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e rival contentions of both the parties and perused the material available on the record. The ld CIT(A) has calculated NP rate @ 6.28% on given facts and figures by the assessee against 5.16% shown in the year under consideration. The ld AR had not controverted the finding given by the ld CIT(A). The ld AR had not challenged the rejection of books of account, therefore, book result cannot be accepted as such. The past history also showed that the assessee had shown much more NP rate even on high .....

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ion to partner is 3.4% whereas this rate was 5.28% in preceding year, therefore, there was a substantial decline in NP rate during the year. The AR has not explained this reason alongwith evidence. Moreover, in the present case as well as there is rejection of books of account and the assessee has failed to maintain proper books of account namely stock register, labour charges register, qualitative details and record of the invoices, therefore, on account of record has rightly been rejected by t .....

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f appeal is dismissed. 8. The assessee has raised additional ground on addition confirmed by the ld CIT(A). The assessee has taken any ground before the ld CIT(A) on this issue of payment of PF and ESI as cleared from form NO. 35 for A.Y. 2009-10, therefore, at this stage, the assessee is not entitled to raise additional ground without raising this issue before the ld CIT(A), which is also not permitted under the law. Accordingly, this addition ground raised by the assessee is dismissed. 9. Grou .....

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