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TMI Blog2018 (1) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... amend, withdraw or insert any ground or grounds of appeal before at the time of hearing of the appeal." 2. Ground No. 1 is regarding the addition made by the AO was restricted by the ld. CIT(A) by applying net profit rate 11.5%. The assessee is a partnership firm and engaged in the business of civil contractor for construction of roads, bridges and other works. For the assessment year under consideration the assessee filed its return of income and declared net profit @ 5.22% as against 5.48% shown in the last year. The Assessing Officer while completing the scrutiny assessment u/s 143(3) of the Income Tax Act disallowed various expenses on account of wages, petrol and hire charges to the extent of 5% and 10% total amounting Rs. 1,30,41,580/- after rejecting of books of accounts u/s 145(3) of the Act. On appeal, the ld. CIT(A) has restricted the disallowance made by the AO by applying the net profit rate of 11.5% before allowing depreciation and interest. The ld. CIT(A) has followed the decision of this Tribunal in assessee's own case for the assessment years 2007-08 and 2008-09. 3. We have heard the ld. AR as well as ld. DR and considered the relevant material on record. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions of Ld. AR and material available on records. Similar disallowances/additions on the same set of facts were made in the earlier years. In A.Y. 2007-08, AO made the disallowance of various expenses resulting into addition of Rs. 1,39,94,870/-. Hon'ble ITAT disagreed with these disallowances and held that instead of disallowing expenses head-wise, a reasonable net profit rate should be applied. Tribunal directed the A.O. to apply net profit rate of 11.5% before allowing depreciation and interest. This Tribunal's order was subsequently followed by my predecessor in the appellant's case for A.Y. 2008-09 in ITA No. 208/JPR/2010-11 dated 18.07.2011, where disallowances of Rs. 3,09,63,950/- were deleted and A.O. was directed to apply net profit rate of 11.5% subject to depreciation, interest and remuneration to partners. 3. Judicial discipline requires me to follow the decisions of my predecessor and of Hon'ble ITAT in the appellant's own case for earlier year, the facts and circumstances being same. Accordingly, the head-wise disallowances are deleted and A.O. is directed to apply net profit rate of 11.5% as directly by Hon'ble ITAT in A.Y. 2007-08. The ground raised by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of accounts of the assessee were rejected u/s 145(3) of the Act then, the income of the assessee is required to be assessed on estimate basis and best judgment of the AO. Therefore, the following earlier decision of this Tribunal in assessee's own case, we do not find any error or illegality in the impugned orders of the ld. CIT(A) qua this issue. 4. Ground No. 2 is regarding deletion of disallowance u/s 40(a)(ia) of the Income Tax Act. The Assessing Officer has disallowed Rs. 19,30,332/- u/s 40(a)(ia) of the Act for non deduction of tax at source. On appeal, the ld. CIT(A) has deleted the said disallowance on the ground that the entire expenditure claimed by the assessee was paid and nothing was payable at the end of the year. 5. Before us, the ld. DR has submitted that the issue is now covered by the decision of the Hon'ble Supreme Court in the case of M/s Palam Gas Service vs CIT 394 ITR 300 whereby the Hon'ble Supreme Court has reversed the decision in the case of Vector Shipping Service P. Ltd. Vs. CIT 357 ITR 642. 6. On the other hand, ld. AR of the assessee has not disputed that the issue regarding applicability of Section 40(a)(ia) of the Act on the amount alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 2,18,277/- was made by the Assessing Officer. The ld CIT(A) has confirmed the addition of the Assessing Officer by rejecting the contention of the assessee. The amount was already paid during the previous year and not payable at the end of the year. Thus, it is clear that the contention raised by the assessee before us that after rejection of books of account and estimation of income of the assessee, no further addition can be made by the Assessing Officer, has not been considered or decided by the ld. CIT(A). We find that the Coordinate Bench of this Tribunal in the case of Rakesh Construction Co. Vs. ACIT (supra) while dealing with the identical issue has held in para 2.4 as under: "2.4 We have heard the rival contentions and perused the material available on record. In the instant case, the books of accounts were rejected u/s 145(3) of the Act and thereafter the AO has estimated net profit @ 5.05% on contract receipt after deduction of depreciation, interest and remuneration paid to partners as against net profit of 2.39% declared by the assessee. From the perusal of the assessment order, it is noted that there have been discussions between the AO and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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