TMI Blog2012 (11) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in business of civil construction work. The assessee has declared receipts of ₹ 7,70,07,965/-, on which the net profit of ₹ 39,88,857/- (before remuneration and interest to the partners) has been earned. The AO has rejected the books of account of the assessee by applying the provisions of section 145(3) and assessed the income of the assessee by applying G.P. rate of 12.5% of the gross receipts and computed the income of the assessee. The AO in nutshell has given reasons for rejection of accounts because no bills or vouchers were produced in support of the expenditure claimed in contract and profit and loss account. On verification of the ledger, it was noticed that majority of the expenditures have been paid in cash and vou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payments made to sub-contractors and deduction of TDS and payments for Commercial-tax and labour welfare cess were deducted by the assessee. The assessee submitted that in earlier years, i.e., 2006-07, 2007-08 and 2008-09, the assessee has declared GP rate of 5.13%, 5.39% and 5.01% before remuneration and interest and in assessment year under appeal, it was shown at 5.18%. In the comparable cases also more or less similar profit rate has been shown and accepted by the department. In the case of Rakesh Chauhan, there is a profit rate of 5.79% in the assessment year 2008-09. In the case of M/s. Gulab Chand Bishambhar Dayal, there has been profit rate of 5.12% and 5.13% in the assessment years 2008-09 and 2009-10. In the case of Tulsi Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee at ₹ 46,20,478/- (before remuneration and interest) and accordingly, the appeal of the assessee was partly allowed. 3. The Revenue is in appeal challenging the order of the ld. CIT(A) in holding the rejection of accounts u/s. 145(3) of the IT Act as invalid and also in adopting the profit rate of 6% in place of 12.5% adopted by the AO. The assessee in the cross objection has challenged the application of net profit rate of 6% in place of 5.18% declared by the assessee and the assessee sought deletion of the entire addition. 4. The ld. DR relied upon the orders of the AO and submitted that in the absence of supporting vouchers and documents, rejection of the books of account was justified and further redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards the application of profit rate of 6% or more, we do not find any justification to interfere with the order of the ld. CIT(A) in computing the business income of the assessee by applying the profit rate of 6% in place of 5.18% declared by the assessee. History of the assessee and the comparable cases are the basis to estimate the profit of the assessee when the books of account are rejected. The assessee in the earlier years has declared profit rate of 5.13%, 5.39% and 5.01%. Two of the profit rates as above are below the profit rate declared by the assessee in assessment year under appeal and higher of the profit rate declared in earlier assessment year 2007-08 is 5.39%. In the comparable cases, cited before the ld. CIT(A), in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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