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M/s Gupta K.N. Construction Co. Versus D.C.I.T., Circle-7, Jaipur.

2016 (4) TMI 335 - ITAT JAIPUR

Estimation of N.P. rate - Held that:- The assessee has claimed third party interest from the net profit rate estimated but on verification of the past history, it is found that the assessee never claimed third party interest against the net profit rate applied by the Assessing Officer. Therefore, we do not find any merit on ground of the assessee’s appeal. Similarly interest on FDR has also been assessed by the Assessing Officer as income from other sources, which has been accepted by the assess .....

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essing Officer is directed to calculate the income as per observation made by us. - ITA No. 61/JP/2016 - Dated:- 4-3-2016 - SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM For The Assessee : Shri S.L. Jain (Adv) and Mrs. Premlata (Adv) For The Revenue : Shri O.P. Bhateja (Addl.CIT) ORDER PER: T.R. MEENA, AM This is an appeal filed by the appellant against the order dated 14/12/2015 passed by the learned CIT(A)-III, Jaipur for A.Y. 2012-13. The effective grounds of appeal raised by the appellant a .....

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t which is binding on all officers employed in the execution of the Act [ Navneet Lai Jhaveri V/s K.K. Sen.AAC (1965) 56 ITR 198 (SC), and therefore the assessment order so made is without jurisdictions, illegal and void ab-initio. 3. That the learned Authorities below have grossly erred in law and facts in making/ confirming trading addition of ₹ 93,51,479/- and not placing reliance on the past history of case. The department, ITAT, Hon'ble High Court has estimated income on the basis .....

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ned Authorities below have grossly erred in law and facts in taxing bank interest as income from other source instead of income from business on funds lying in the business. 6. That the learned Authorities below have grossly erred in law and facts in charging interest u/s, 234(B) of ₹ 1,58/436/- , 234(D) of ₹ 2,41,396/- & 244(A)Rs. 2,32,703/-. 2. The assessee derived income from civil construction work. The assessee firm filed its return on 26/09/2012 declaring total income of &# .....

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011-12. All the grounds of the appeal are against rejection of books of account U/s 145(3) of the Act, the Assessing Officer made assessment out of jurisdiction, not considered the past history of the case, not allowed third party interest and treating interest income as income from other sources and charging interest under various sections. The ld Assessing Officer further observed that the assessee has not maintained stock register, consumption register, opening and closing stock inventory. Th .....

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77; 23,12,462/- for which no documentary evidence had been produced before the Assessing Officer. He also claimed printing & stationary expenses, vehicle repairing expenses, repair and maintenance expenses and office expenses without any bill vouchers. The ld Assessing Officer asked to produce the books of account on various dates but no compliance has been made by the partners of the firm. Summons to all the partners were also issued to make compliance of query raised by the Assessing Offic .....

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. After considering the various facts, the ld Assessing Officer applied 11% NP rate on total contract receipts of ₹ 15,38,53,690/- and addition of ₹ 93,51,579/- was made in the income of the assessee. Further the interest income also assessed as income from other sources of ₹ 23,94,707/-. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had dismissed the assessee s appeal by observing that the assessee had not c .....

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ation and depreciation. The interest to the third party has also not been allowed by her on the basis of A.Y. 2011-12 as the assessee has accepted the order for A.Y. 2011-12 and did not file any appeal against the order. Therefore, following the principle of consistency, she found no reasons to interfere in the finding of the Assessing Officer. She further held that interest U/s 234(B), 234(D) and 244(A) are consequential of the above findings. 4. Now the assessee is in appeal before us. The ld .....

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of account consisting of cash book, ledger, purchase vouchers, cash payment vouchers, bank statement, loan statement etc. The accounts were audited U/s 44AB of the Act by the qualified person, who had not pointed out any defect, which was also produced before the Assessing Officer. Therefore, invocation of provisions of Section 145(3) has no merit. He further relied various decisions of the various courts on rejection of books of account. Further it is argued that even in invoking provisions of .....

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arduman Kumar Vs. CIT 115 ITR 524 (SC). He further argued that even books are rejected U/s 145, it is not mandatory in each and every case, addition is required to be made as held by the jurisdictional High Court in the case of CIT Vs. Gotan Lime Khaniz Udyog 256 ITR 243 (Raj.). The appellant had disclosed better net profit this year compared to preceding year. Even average net profit of last six years, it is further submitted that it is a settled law where there is an ad hoc application of NP r .....

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he ld CIT(A) s order is well reasoned and had already been considered all the facts and legal issue raised by the assessee. The assessee had not produced complete books of account during the course of assessment proceedings, therefore, rejection of books U/s 145 of the Act is justified and also net profit has been decided by the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. The AR of the assessee has not been able to prove .....

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sing ground No. 2 by the assessee. Accordingly, ground No. 2 of the assessee s appeal is also dismissed. When books of account had been rejected U/s 145(3) of the Act by the Assessing Officer, the only option is left before him to estimate fair income on the given circumstances and nature of the business by comparing the case of by collecting the evidences. The net profit during the year under consideration is 4.95% before interest and remuneration on total contract receipt of ₹ 15,38,53,6 .....

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