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GOYAL CONSTRUCTION CO. Versus ASSISTANT COMMISSIONER OF INCOME-TAX

2002 (9) TMI 875 - ITAT AGRA

IT APPEAL NOS. 1733 & 2955 (DELHI) OF 1995 - Dated:- 25-9-2002 - N.K. KARHAIL, JUDICIAL MEMBER AND M.L. GUSIA, ACCOUNTANT MEMBER For The Appellant : K.C. Agarwal For The Respondent : A.R. Gautam ORDER Per M.L.Gusia, Accountant Member. - These two appeals of the assessee pertain to assessment year 1990-91. Both the appeals are decided by this consolidated order for the sake of convenience. Appeal No. 1733/Del/95 2.1 In this appeal there are three grounds of appeal. However, during the course of h .....

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nfirming the rate of profit @ 11% against the rate applied 12.5% by the Asstt. Commissioner of Income-tax, Investigation Circle, Gwalior, after considering the position w.r.t. assessment year 1988-89 as well as 1989-90, whereas in the year 1988-89 and 1989-90 rate was 10.45% and 7.57% respectively before allowing the interests and depreciation. Accordingly the rate of 11% ought to held that the rate is before allowing the interest and depreciation." 2.2 The facts of the issue are that the a .....

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. He, therefore, invoked the provisions of section 145 and applied rate of 12.5% of contract receipts, which comes to ₹ 1,34,870 before depreciation. The CIT(A) in his order uphold the Assessing Officer s action rejecting the books of account and applying the provisions of section 145. He did not accept the plea taken by the assessee that by rejecting the books of account, the Assessing Officer was changing the method of accounting of the assessee as according to CIT(A), it is misplaced be .....

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index for labourers and prices having gone up, he reduced the rate from 12.5% to 11%. 2.3 During the course of hearing, the ld. Counsel to the assessee did not emphasis about the rejection of books of account. However, more emphasis were given on the past history of the case. He filed paper book and on page 1 of the paper book, it was shown that gross profit for assessment years 1988-89, 1989-90 and 1990-91 @ 9.84%, 7.6% and 10% respectively before depreciation and interest. 2.4 But we noted th .....

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t 11% of the contract receipt. The ld. Counsel to the assessee also argued that the assessee could not fully devote to the work of contract for the reason that the contract work was being done in the region of Chambal river, which is famous for dacoity and the assessee was receiving threating letters from the dacoits for extracting money. 2.5 On the other hand, the ld. DR relied on the decision of the Hon ble Allahabad High Court in the case of Saraya Engg. Works, 158 ITR 455 and also the decisi .....

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ome from the truck plying. We also noted that this year, the rate of profit has been declared at 3.97% before depreciation which is very low, therefore, we hold that for the reasons mentioned in the assessment order about the defects in the books of account, the Assessing Officer has rightly invoked the provisions of section 145. Further, having regard to the judgment of Hon ble Allahabad High Court in Saraya Engg. Works, 158 ITR 455, we uphold the order of the CIT(A) and thus, the appeal of the .....

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ces and in law." 3.2 The facts of the issue are that the books of account of the assessee-firm has declared loan in the name of M/s. Kushwaha & Kushwaha Co. in two parts of ₹ 30,000 and ₹ 10,000 by account payee cheque No. 030199, dated 25-4-1989 and 030915, dated 24-5-1989 respectively. The relevant entries in the books of the assessee have been passed on 28-4-1989 for ₹ 30,000 and on 24-5-1989 for ₹ 10,000. The Assessing Officer noted that the above are cash de .....

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s an act of the firm. But the reply of the assessee was not accepted by the Assessing Officer and mentioned in the penalty order that the deposit of ₹ 30,000 and ₹ 10,000 were accepted by the assessee-firm in cash from M/s. Kushwaha & Kushwaha Co. and which is in contravention to the provisions of section 269SS, hence penalty of ₹ 40,000 was levied under section 271D of the Income-tax Act. 3.3 During the course of hearing, the ld. Counsel to the assessee filed paper book co .....

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n cash and on 24-5-1989, the amount of ₹ 10,000 was deposited by cheque, which was withdrawn in cash on the same day. During the course of hearing, the ld. Counsel to the assessee argued that Shri Suresh Chand Goyal is partner of the assessee-firm and the cheque received from M/s. Kushwaha & Kushwaha Co. were first deposited in partners savings bank account and thereafter withdrawing the same in cash, the amount was deposited with assessee-firm in the name of Kushwaha & Kushwaha Co .....

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see firm while the accounts of the assessee-firm show the loan obtained from M/s. Kushwaha & Kushwaha Co. Though the deposit has been shown by the assessee-firm as received by account payee cheque but no such account payee cheque was issued by Kushwaha & Kushwaha Co. in the name of the assessee-firm. The ld. counsel of the assessee could not explain that why M/s. Kushwaha & Kushwaha Co. did not issue cheque directly to the assessee-firm and what was the necessity that it, as claimed, .....

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