TMI Blog2016 (4) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... jecting the books of account. The judgments relied upon by the ld. Counsel for the assessee are not applicable to the facts and circumstances of the case and the judgments relied upon by the AO while passing the assessment order are squarely applicable to the facts and circumstances of the case. Hence, the appeal of the assessee is partly allowed to that extent. - Decided in favour of assessee in part - ITA Nos. 199/JP/2015 - - - Dated:- 24-2-2016 - SHRI T.R.MEENA, AM AND SHRI LALIET KUMAR, JM For The Assessee : Shri Shrawan Gupta (Advocate) For The Revenue : Shri Kailash Mangal (JCIT) ORDER PER SHRI LALIET KUMAR, J.M. The present appeal filed by the assessee is arising from the order dated 09.01.2015 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence the AO may kindly be directed to treat the interest receipts as business receipts. 3. The ld. AO erred in law as well as on the facts of the case in charging of interest u/s 234B, 234C 234D as consequential in nature. The appellant totally denies it liability of charging of any such interest. Hence the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 2. Brief facts of the case are that the assessee is a contractor engaged in civil construction work and running of heavy goods vehicle/machineries on hire. He has submitted the return of income on 30.9.2009 which was revised on 24.02.2010 declaring the income of ₹ 1,25,99,660/-. The return was processed under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lidated expenses under the head Contract expenses and no head-wise bifurcation of details of expenses are maintained as a result, the AO has issued show cause notice asking the assessee to explain as to why in view of the defects pointed out, section 145(3) be not invoked. Accordingly the books of accounts were rejected by the AO relying upon the judgment of Hon ble Supreme Court in case of S.N. Samasivayam Chettair, 38 ITR 579, Basti Ram Narayan Das Maheshwari vs. CIT, 210 ITR 438 and CIT vs. British Paints India Ltd. 188 ITR 44. 2.2. After rejecting the books of account, the AO has applied the NP rate of 8.5% on the basis of past history, as upheld by the ld. CIT (A) for the A.Y. 2006-07 subject to further deduction of depreciation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO for applying NP rate 8.5% subject to depreciation and interest to third parties is confirmed. As regards treating the interest income on FDR as income from other sources it may be noted that even if when the FDR are got issued for business purposes the fact is that such income is not part of the contract receipts and whatever expenses are incurred in respect of obtaining of such FDR, such expenses are already claimed in the P L account. The appellant has also shown such income in the P L account separately. Therefore such income is net of the expenditure already incurred and is to be taxed separately even if FDRs were got issued for contract business. Therefore the action of the AO taxing ₹ 49,01,129/- being FDR interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e @ 8.5% subject to deduction of depreciation, interest paid to third party. The ld. CIT (A), on appeal by the assessee, had confirmed the order of the AO on both the counts i.e. for rejection of books of account and applying NP rate of 8.5%. The Hon ble Jurisdictional High Court in the matter of CIT vs. Gupta K.N. Construction Co. in DB ITA No. 59/2014 decided on 18th August, 2014 has held as under :- 2. Brief facts which have been noticed from the impugned order and other material on record are that the respondentassessee being a partnership firm is engaged in the business of civil contractor and has furnished his income tax return for the above assessment year under appeal alongwith audit report and other information. The responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absolutely silent as to justifying net profit rate to the extent of 13.7%,whether the addition/ disallowance made by the AO can be said to be appropriate. The assessment order is totally silent about similarly situated other traders/businessman showing net profit over and above what the assessee had shown and compared by the Assessing Officer and no evidence has been brought on record as to how the Assessing Officer was justified in applying net profit rate at 13.7%. In our view while comparing with the past history, if the results are fair and reasonable then invariably no addition needs to be made. 11. Though the argument of the ld. officer of the Revenue can be said to be proper and justified that in a case where the assessee mani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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