TMI Blog2017 (12) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the decisions relied upon by the Ld. Counsel for the assessee Shri Ram Jhanwar Lal Vs. ITO and Ors (2008 (7) TMI 505 - RAJASTHAN HIGH COURT. Assessee is also directed to discharge the onus from his side by furnishing the relevant comparable cases during the remand proceedings before the AO to help him taking best decision relating to profit percentage. Accordingly, Ground No.2 raised by the assessee is partly allowed for statistical purposes. Addition u/s.69 - we find the CIT(A) is not fair in directing the AO to assess the said amount of ₹ 20 lakhs of capital introduced by the partner of this firm. We find there are similar capital introduction by other partners and AO/CIT(A) did not consider need of taxing the same in the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant facts of the case are that the assessee is a Civil Contractor and is a sub-contractor to M/s. Ashoka Buildcon Ltd., Nashik for the year under consideration. The sub-contract involves six lanning of Pimpalgaon-Nashik-Gonde section on NH3. Assessee filed the return of income declaring total income of ₹ 31,95,837/- and the AO determined the assessed income of the assessee at ₹ 1,34,24,870/-. AO made various item-wise additions on account of bogus purchases as well as on account of unexplained cash credits u/s.69 of the Act. 4. During the First Appellate proceedings, the CIT(A) found that turnover of the assessee during the year under consideration is around ₹ 13.36 crores (rounded off). CIT(A) held that all is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee into the firm. CIT(A) treated the same as income of the assessee. Deviating from this approach, on the other such cash introduction into the firm, CIT(A) directed the AO to make 5. Aggrieved with the above enhancement of the income by the CIT(A), the assessee filed the present appeal before us with the above extracted grounds. 6. Regarding the addition of ₹ 2,00,41,924/-, Ld. Counsel for the assessee submitted that it is extremely unfair to estimate the profits of the assessee, who is merely a sub-contractor, applying the rate of 15%. To support the same, Ld. Counsel for the assessee submitted that the assessee s own net profit in the A.Y. 2011-12 and subsequent assessment years with meager turnover of a crore, which is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices and other correspondences with the assessee, Ld. Counsel submitted that the CIT(A) initially proposed for adopting only 10% as GP rate without giving any deductions. However, due to some reasons, the CIT(A) changed his mind and adopted an extremely higher GP rat of 15% without any sustainable reason and unsupported by any judgments to support his decision. 9. We heard both the parties on this issue of estimation of GP rate. There is no dispute on the facts about rejection of books of account u/s.145 of the Act. Ld. Counsel for the assessee did not press this issue before us. We also perused the decisions cited by the Ld. Counsel for the assessee in the case of S.K. Jain (supra) and find with 6.25% the same are nowhere close to 15% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee over the years which are recorded by the assessee and find there is huge variance ranging from 2.40% to 9.70%. There is GP rate of 19.07% for A.Y. 2014- 15 too and it appears to be an extraordinary GP rate. Excluding the said extraordinary item, the average of the rest of the profit rates from A.Yrs. 2011-12 to 2017-18 works out to 5.92%, which far below the profit rate of 6.25% confirmed by the Indore Bench of the Tribunal in the case of S.K. Jain (supra). Further, on perusal of the said decision of Indore Bench Tribunal, we find the facts of the case does not seem to be comparable to the facts of the present case where the assessee is a Civil sub-contractor to M/s. Ashoka Buildcon Ltd., and is subcontracted for work of shifting of dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and u/s.32 relating to the depreciation out of the profits so estimated by the AO in the remand proceedings and pass a speaking order on this issue after considering the decisions relied upon by the Ld. Counsel for the assessee (1) Shri Ram Jhanwar Lal Vs. ITO and Ors 321 ITR 400 (Raj.), (2) Tejas Construction Vs. ACIT 189 TTJ 213 (Hyd.) and (3) Narula Transport Company Vs. ACIT 87 TTJ 803 (Amr.). Assessee is also directed to discharge the onus from his side by furnishing the relevant comparable cases during the remand proceedings before the AO to help him taking best decision relating to profit percentage. Accordingly, Ground No.2 raised by the assessee is partly allowed for statistical purposes. 12. Regarding the other issue of addit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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