TMI Blog2018 (3) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 which was not challenged by the assessee before the ld. CIT(A). As all other facts of the assessee are same as of the immediate preceding year, therefore in our considered opinion, it would serve the end of justice to the assessee if the estimate is scaled down to the profit @ 5.77% of the gross turnover. The grievance of the assessee is, as such, partly allowed. - ITA No.2246/Kol/2016 - - - Dated:- 16-3-2018 - Shri Waseem Ahmed, Accountant Member And Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri P.K. Agrawalla, FCA For The Respondent : Shri Arindam Bhattacherjee, Addl. CIT-DR ORDER PER Waseem Ahmed, Accountant Member:- This appeal by the assessee is directed against the order of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee is a Partnership Firm and engaged in civil construction services. During the assessment proceedings, the AO found that the most of the business expenses were supported with the self-made vouchers and no day-to-day stock register was maintained. The AO also asked the assessee to produce certain documents but the assessee failed to file the same. Therefore, the business expenses claimed by the assessee were not substantiated on the basis of lack of the documentary evidences. Accordingly AO rejected the books of accounts u/s 145(3) and estimated the profit @ 6.5% of the gross turnover and hence the addition was made amounting to ₹ 56,10,944/- to the total income of the assessee. 4. Aggrieved assessee preferred an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had not preferred appeal for those years, whereas It had preferred appeal for the subject assessment year. It have a closer look at the arguments of the appellant-assessee, It is worthwhile to look closely and compare the figures for the three years under consideration: a. For the A.V 2010-11, the scrutiny assessment has been completed on 30.03.2013, after the rejection of books. For that year the Ld.AO had a compared the results of the assessee with another case, namely M/s Valecha Engineering, which was a public listed company in the same line of business. The Ld, AO has reckoned that the profits before Interest and depreciation was to be estimated at 7.5% of the turnover. In effect, after Interest and depreciation, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is 5.48 % as against 5.44% for the immediate preceding A.Y, which had almost 80% more turnover. In the circumstances, in my considered opinion, while the Ld AO was correct in rejecting the books of accounts, the estimation of 6.50% as net profit over the turnover appears to be high when compared to the figures and method adopted by the Ld.AO in the immediate two preceding years which had been subject to scrutiny, and there appears to be merit In the arguments advanced by the Ld A.R for the appellant. The Ld AO has also not elaborated on the reasons as to why he has adopted a higher figure for the subject assessment year when the figures adopted In the earlier years, more specifically A.Y 2010-11 was based on a comparable case of a listed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Whether addition in gross profit rate of assessee with reference to case of another assessee was justified when assessee's past history was available and there was no material difference In facts pertaining to relevant assessment year and past history year - Held, no [para7] [ In favour of assessee ] 6. Having considered the entirely of the situation, I find that It would be adequate and fair is the profit percentage is kept at 6% nearer to the percentage adopted in the earlier years by the Ld AO. 6% of the turnover would work out to ₹ 3,42,65,420 (6% of ₹ 57,lO,90,332/- ) and the difference would work out to ₹ 29,45,490/-. This portion of the addition made by the Ld AO out of ₹ 56,10,944/- Is therefore su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on turnover and thereby sustaining addition of ₹ 29,45,490/- merely on surmises and guesses without any comparative case and ignoring steep fall in turnover and ignoring still improvement in income percentage. The ld. AR before prayed that the addition confirmed by the ld. CIT-A should be reduced from 6% to 5.48% as declared by the assessee. On the other hand the ld. DR vehemently relied on the order of Authorities Below. 6. We have heard the rival contentions perused the materials available on record. There is no dispute with regard to the rejection of books of accounts. There is no change in the facts and circumstances as compared to last assessment year as observed from the assessment order of earlier year(s). However, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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