9911796707
TMI Blog2017 (2) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... case was adjourned to 16.11.2016 and the parties were informed. On 16.11.2016, none appeared on behalf of the assessee. As nobody appeared on behalf of the assessee we proceed to dispose of this appeal by hearing the Ld. DR. 2. The Ld. DR submits that the assessing officer while completing the assessment disallowed 20% of the purchases and 10% of labour charges for the reason that the assessee has not produced books of accounts, cash book, bills, vouchers, stock register etc though specifically called for. Since the assessee could not produce any information as called for by the assessing officer, the assessing officer disallowed 20% of purchases and 10% of labour charges incurred and completed the assessment accordingly. Ld. DR submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r observing as under "3.3 I have considered arguments of the Ld.AR and perused assessment order. The purchase register and labour register and purchase bills were asked to be produced by the AO by show cause notice dated 5.12.2011. Prior to that the assessee had vide its reply dated 19.10.2011, 11.8.2011, 14.11.2011 & 28.10.2011 had given to the AO all the details of various expenditure claimed in the books of accounts including, the details of purchases above Rs. 1 lac with name and address, month wise details of labour charges, labour register, details of receipts and other expenses debited in the P&L A/c. It was only on 9.12.2011 that the books of accounts were lost in transit as claimed by the appellant. Though some details of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gross Profit Percentage 2006-07 2016903 387245 19.2 2007-08 11510690 1300708 11.3 2008-09 25800467 1419026 5.5 2009-10 27763905 1638070 5.9 From the above chart it is clear that there is a substantial fall in GP to 5.9% in AY 2009-10 and 5.5% in AY 2008-09 as compared to GP of 19.2% A.Y. 06-07 & 11.3% in AY 07-08. When the appellant was asked to explain the fall in GP as compared to AY 2006-07 & 2007-08, it was stated that there is increase in material cost from 5 to 10% during the year as compared to earlier year which has resulted in fall in GP. It is logical that when cost of material increases, the contract prices are also increased. It is not the case that the assessee has undertaken fixed rate contracts from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the same are liable to be rejected u/s. 145(3). In case of Kanpur coal syndicate 53 ITR 225(SC), it has been held that the powers of AAC are co-terminus with that of AO and he can do what AO can do or direct the AO what he failed to do. In the case of Raj bahadur Hardutroy Chamaria 66 ITR 443 (SC) the apex court held that the competence of CIT (A)is not restricted to examining those aspects of assessment which are complained by the assessee but his competence ranges over the whole assessment and it is open to him to correct the ITO not only regard to matter raised by the assessee but also with regard to a matter which has been considered by the AO and determined in the assessment. Thus after rejection of book results the profits have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses are required. Hence in place of adhcc disallowance of Rs. 14,60,381 out of purchases & Rs. 23,04,404/- out of labour expenses, the addition is confirmed to the extent of Rs. 11,38,320/- only. In result this ground is partly allowed." 4. On going through the order of the Ld. CIT (Appeals) and the findings and observations there on, we do not find any infermity in estimating the gross profit by the Ld. CIT (Appeals). However, at the same time, we observe that there is a wide gap in gross profit percentage declared by the assessee during the assessment years 2006-07 and 2009-10, therefore, the average gross profit rate arrived by the Ld. CIT (Appeals) at 12% and further reduction of 2% granted for fall in profits due to competitive pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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