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2018 (3) TMI 948

red to last assessment year as observed from the assessment order of earlier year(s). However, we note that AO has not elaborated the reasons for adopting the higher profit as compare to the earlier year(s). - AO estimated the profit @ 6.50% of the gross turnover which was reduced by the ld. CIT(A) to 6% of the gross turnover. It was observed that the profit of the assessee was estimated by the AO @5.77% of the gross turnover in the immediate preceding AY 2011-12 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 @ .....

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ehalf of assessee and Shri Arindam Bhattacharjee, Ld. Departmental Representative appeared on behalf of Revenue. 2. Ground NO. 1 to 3 are inter related and therefore being taken up together. The only issue raised before us by assessee is that the Ld. CIT(A) erred in sustaining the addition of ₹ 29,45,490/- made by the Assessing Officer . 3. Brief stated facts of the issue are 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. Ther .....

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pellant has challenged is that from its own case in earlier years, the estimation @ 6.5% was excessive and without any justification. The appellant has also submitted figures for the immediate two preceding assessment years, namely 2010-11 & 2011-12, which had also been subject to scrutiny, and additions had been made in similar circumstances. It appears that the assessee 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 rejectio .....

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have been kept at 5.77%. d. For the year under consideration, It is observed that the turnover of the assessee-firm has come down drastically from ₹ 97.30 crores in the immediate preceding A.Y2011-12 to ₹ 57.11.crores for the subject Assessment Year 2012-13. However, simultaneously, the disclosed profits as a percentage of turnover 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 .....

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to case of another assessee was not 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 Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of profit [Gross profit, rate] - Assessment year 1994-95 - 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 p .....

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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 note that AO has not elaborated the reasons for adopting the higher profit as compare to the earlier year(s). We also note that assessee has d .....

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