TMI Blog2019 (6) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal is filed at the instance of the assessee pertaining to Assessment Year 2013-14 and is directed against the order of Ld. Commissioner of Income Tax(Appeals)-II (in short CIT(A) ), Indore dated 31.01.2017 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(In short the Act ) dated 18.03.2016 framed by DCIT-1(1), Indore. 2. The assessee has raised following grounds of appeal; 1. That the Ld. CIT(A) erred and confirmed the action of assessing officer in rejecting the books of accounts without pointing out any material defect in the correctness and completeness of books of accounts. The addition made by the A.O and confirmed by the CIT(A) is totally wrong and illegal on the facts of the case. 2. That the Ld. CIT(A) erred and confirmed the addition of ₹ 33,37,479/- for low profit without appreciating full facts and reasoning. 3. That the Ld. CIT(A) erred and confirmed the addition of 1% net profit rate, since the N.P rate applied by the Assessing Officer and same after giving 1% relief which is confirmed by CIT9A) is unjustified being excessive. 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016. It has been noticed that the assessee company has made various payments in cash. When the AR of assessee was asked to verify the same with supporting documents. In response to this the AR of assessee produced some bill/vouchers of payments. But cash payment details not found on record. vi) Most of the payments made in cash even paid more than 20,000/- some of them are payments made to Manish Khodiyar (Khodiyar Const.) of ₹ 16,85,325/- and Gangaram of ₹ 15,73,308/- and others in cash in full. In absence of bank payments cross verification of the said payments are not possible. The AR explained during verification of Books that these payments are PR W (piece rate worker payments) and also claimed to paid various workers through above persons. vii) Further the assessee company has also paid club membership fees ₹ 28,740/- and the same was not found related with business. viii) During the course of assessment proceedings it has been noticed from P L account the assessee has shown purchase of stock in trade of ₹ 157391315/- . Further verification it is found that the said amount is the purchase of construction mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Accounts and invoked section 145(3). He has referred to some self drawn vouchers which are not denied but that is not a defect considering the line of business and location of site at far off places. It was specifically pointed out during the Assessment Proceeding that it is neither practicable nor possible to obtain Pakka bills in respect of purchase of snacks, milk, mending of punctures, minor repairs of vehicle and machinery by the local mechanics etc. However, it is clear beyond doubt that these expenses are genuine and quantitatively correct. This procedure is subjected to strict vigilance by the company's directors as above expenses are met from petty cash maintained at the site where supervisor is the person entrusted with the task of incurring the expenditure to the bare minimum. There is no likelihood of exaggeration of the said expenses because it will leave sufficient apertures for leakage of Company's funds. The next issue is enhancement in net profit by ₹ 66,74,958/- which is a gigantic and unscientific figure. There is no basis to arrive at the said figure. It is submitted that even if the books of accounts are rejected and book result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trovert that the facts and issues of the assessee under appeal for Assessment Year 2013-14 are similar to the facts and issues adjudicated by the Tribunal in assessee s own case for Assessment Year 2011-12 . 11. From perusal of the decision of the Hon'ble Tribunal, we observe that the action of the Ld. A.O of rejecting the book results was uphold by the Tribunal and as regards estimation of net profit, Tribunal uphold the view taken by Ld. CIT(A) of making addition of 1% net profit as against 2% applied by the Ld. A.O by observing as follows; 4. Now the department is in appeal against reducing the net profit by 1% as against 2% applied by the Assessing Officer and {he assessee is in appeal against 1% retention. 5. During the course of hearing, the -learned counsel for the assessee submitted that the issue in controversy is covered by the decision of the Tribunal in the assessee's own case for the assessment year 2008-09 wherein the Tribunal has accepted the net profit @ 5.39%. The learned counsel for the assessee submitted that in the assessment years 2006-07, 2607-08, 2008-09, 2009-10 and 2010-11 6. the net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of best judgment. Therefore, the Tribunal was in error in confirming the decision of the Commissioner of Income Tax (Appeal). 6.No case to interfere with impugned order dated 15.12.2016 (Annexure C ) passed by the learned Appellate Tribunal, as prayed for, is made out; nor any substantial question of law is arising in this appeal. 7.Accordingly, Income Tax Appeal No.84/2017 has no merit and is hereby dismissed . 13. We therefore respectfully following the judgment of Hon'ble jurisdictional High Court and in the given facts and circumstances of the case are of the considered view that the assessee s books of accounts were rightly rejected by Ld. A.O observing discrepancies as mentioned herein above in preceding paras and Ld. CIT(A)has rightly sustained the addition of 1% net profit rate thereby confirming the addition of ₹ 33,37,479/-. We accordingly dismiss assessee s Ground No. 1,2, 3. 14. Now we take Ground No.4 for the disallowance made u/s 40(a)(ia) of the Act at ₹ 1,51,642/-. This disallowance was made for non deduction of tax at source at testing charges paid by the assessee. We find that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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