TMI Blog2018 (1) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... LINERS VERSUS A.C.I.T., CIRCLE-3, JAIPUR [ 2018 (1) TMI 512 - ITAT JAIPUR] once the n.p. rate is estimated, the AO cannot based this disallowance on the same books of accounts for the purpose of disallowance by invoking provisions of section 40(a)(ia) of the Act or general disallowance u/s 37 of the Act. The estimation made by the AO of net profit will take care of every addition related to business income or business receipts and no further disallowance can be made. Also see ARJUN BHOWMICK [ 2014 (8) TMI 1075 - CALCUTTA HIGH COURT] - Appeal of the Revenue is dismissed. - ITA No. 58/JP/2013 Assessment Year : 2009-10 - - - Dated:- 18-1-2018 - Shri Vijay Pal Rao, JM And Shri Bhagchand, AM Assessee by: Shri Rajjev Sagoni And Shri Rohan Sagoni (C. A.) Revenue by: Shri R.A. Verma (Addl. CIT) ORDER Vijay Pal Rao, This appeal by the Revenue is directed against the order dated 08.10.2012 of CIT (A) for the assessment year 2009-10. The Revenue has raised the following grounds:- i. The CIT(A) has erred in law and on facts and in perversity, restricted the various disallowance of expenses on wages, petrol, hire c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above discussion, the following specific disallowances are being made: Head of expense Amount claimed % Disallowed Amount Disallowed. Purchase 5,35,60,237/- - 26,83,716 Wages 4,05,75,824 10 40,57,582 Repair maintenance 91,43,014 10 9,14,301 Diesel Petrol 4,36,76,943 10 (includes disallowance u/s 40A(3)) 43,67,694 Freight 9,09,360 5 45,468 Tour 96,394 10 9,639 Vehicle hire 65,56,955 10 disallowance includes u/s 40A(3)) 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 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 appellant is partly allowed. Since, neither of the parties has challenged the action of the AO and ld. CIT(A) regarding the rejection of books of account u/s 145(3) of the Act, therefore, the decision of the ld. CIT(A) in applying the net profit rate by following the earlier orders of this Tribunal in assessee s own case cannot be faulted with. The Tribunal in assessee s own case for the A.Y. 2008-09 vide order dated 25th May, 2012 in ITA No. 879 of 2011 has considered and decided an identical issue. We further note that for the assessment year 2010-11 vide order dated 30.06.2017 in ITA No. 722/JP/2014 the Tribunal has again considered and decided an identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 already paid is now covered by the decision of Hon ble Supreme Court in case of M/s Palam Gas Service vs. CIT (supra). However, the ld. AR of the assessee has submitted that once the AO rejected the books of account and the income of the assessee was estimated by the ld. CIT(A) by applying the net profit then, no further disallowance is called u/s 40(a)(ia) of the Act. In support of his contention, he has relied upon various decisions including the decision of the Coordinate Bench of this Tribunal dated 08.01.2018 in case of M/s Power Linder vs. ACIT in ITA No. 194/JP/2017. The ld. DR in his rejoinder has raised an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 assessee in terms of estimating the net profit rate once the books of account have been rejected. As part of that discussion, it is noted that in response to AO's show-cause as to why 8.5% net profit rate should not be allowed, the Id. AR has submitted that if the net profit at the rate of 8.5% is applied, then the deduction on account of payment of hiring charges for machinery taken on rent amounting to ₹ 22,41,600/- and ₹ 21,60,000/- are also to be allowed. The Ld. AO finally decided to apply net profit of 5.05% which has been agreed upon by the assessee. It is therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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