TMI Blog2014 (11) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... GH held that TDS was deducted and paid before the due date of return is allowable U/s 40(a)(ia) of the Act, Therefore, we delete the addition confirmed by the learned CIT(A) Characterization of income - Agricultural income or income from other sources - HELD THAT:- The assessee has furnished the relevant agricultural record as well as crop grown on agricultural land. The land belongs to the family members, which was later on gifted to him by his father. It is immaterial whether the assessee has shown any agricultural income or not as it is facts that agricultural income mostly depended on nature. Further the learned Assessing Officer has not discharged his onus to disprove the evidences filed by the assessee, therefore, we delete the addition and Assessing Officer is directed to treat the agricultural income as such. Accordingly, we allow this ground in favour of the assessee and against the revenue. Addition for household expenses - HELD THAT:- D.R. had not controverted the findings given by the learned CIT(A) and the Assessing Officer also has not brought on record any adverse material that the assessee incurred more than expenses on household withdrawals except made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. had specifically disallowed unverifiable expenses but had accepted the receipts disclosed and other details. iii. The order of the CIT(A) is perverse in making comparison of the disclosed G.P./N.P. with the G.P./N.P. disclosed in the earlier year, even while accepting that the facts/details in the present year different materially. iv. The order of the CIT(A) is perverse in ignoring the fact that the normal and acceptable net profit rate in case of this contractors was 8% and should have been applied since it was considered by him to be a case of no accounts, consequent to the invoking the provisions of section 145(3). v. Thus the CIT(A) has erred in restricting the disallowance of ₹ 58,14,131/- to ₹ 2,82,697/-. vi. The CIT(A) s order is perverse in deleting the addition of ₹ 1,20,000/- for household expenses even when the assessee had not responded with specific details, sought by the A.O. vide questionnaire dated 29/11/2011. vii. The CIT(A) s order is perverse in deleting this addition for household even when the assessee was not able to substantiate its assertion that the son of the assessee was employed with M/s Gyan Vasishtha and had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer held that the assessee was not maintaining proper books of account on which, the correct income can be deduced. The purchases made by the assessee in cash and payments were not made through banking channel. The assessee was submitted confirmation of one supplier i.e. M/s Jaipur Steeltech Pvt. Ltd. from whom purchases of ₹ 68,75,538/- had been made and the payments were through bank account but he himself accepted that most of suppliers of rodi, bajri, bricks, marble, hardware, wooden work etc. was made in cash on self made vouchers, rubber stamp printed bills/kachha bills. The purchases to the tune of ₹ 1,08,21,316/- had been shown as sundry current liabilities. Thus, the assessee was not able to completely substantiate the expenses debited in the P L account under these heads. He disallowed 10% out of total purchases of ₹ 3,48,54,667/- at ₹ 27,97,912/- from the purchases. He made similar disallowances in following heads:- (i) Labour Expenses:- ₹ 18,00,538/-. (ii) Freight Cartage Expenses:- ₹ 1,50,705/-. (iii) JCB Expenses:- ₹ 86,134/-. (iv) Water Electrical Expenses:- ₹ 98,755/-. (v) Shuttering Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific defects in the maintenance of books of accounts etc.. If all the additions were considered, the effective G.P. rate would be 15.22%, which is prima facie abnormally higher and improbable in the contractual business, as such. It has been held that normally addition U/s 145(3) of the Act should be limited to the estimation of the G.P. rate only, based on the relevant past history of the assessee and there is no further scope for making separate additions on different related grounds, for which, he relied upon the decision of the Hon ble Gujarat High Court in the case of P. Pravin Co. (274 ITR 534). He further relied upon the decision of Hon ble ITAT Jaipur Bench in the case of M/s Choudhary Brothers in ITA No. 1177/JP/2010 dated 31/05/2011 wherein the Hon ble Tribunal had disproved the multiple additions and had viewed that a composite addition to the G.P./N.P. ratio would be sufficient to take care of all such discrepancies. Therefore, the Assessing Officer was not justified in making the addition under the various head in case of the assessee. If it is presumed that books of account rejected U/s 145(3) of the Act even the additions should have been made on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of civil contractor. The various courts held that procedural lapse does not allow to assessee to get benefit on account of default of any procedure. However, the estimation made by the learned CIT(A) appears to higher side as he applied the previous year G.P. rate in current year, therefore, in the interest of justice, we apply 6.5% G.P. rate on total sales as against confirmed by the learned CIT(A) @ 6.79%. Accordingly, the assessee gets relief partly. The Assessing Officer is directed to calculate the income @ 6.5% G.P.. 8. In the result, the assessee s grounds No. 1 and 2 are partly allowed and Revenue s ground No. I to V are dismissed. 9. Ground No. 3 of the assessee s appeal is against confirming the addition of ₹ 25,019/- on account of non-payment of TDS amount. The learned Assessing Officer observed that the assessee had deducted amount of ₹ 5,382/- and ₹ 19,637/- U/s 194(C) of the Act and the due date for remittance was on 07/2/2009 but the same has been deposited on 15/6/2009. As per provision of Section 40(a)(ia) of the Act, the said amount was to be deposited on or before the last date of the previous year i.e. by 31/3/2009. Therefore, he dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him the ready crops of agricultural land, which has been sold by him. He also submitted additional evidence that this land has been gifted to the assessee. The assesses also submitted that necessary documents regarding crops sold during the F.Y. 2008-09. The learned Assessing Officer further observed that gift deed was dated 06/7/2011, therefore, the land did not belong to the assessee during the year under consideration. In fact, the gift deed signed was after thought to justify the receipt in his hand. The assessee had not claimed any expenditure on doing the agriculture activity but met out from the agricultural crop sold in the F.Y. 2007-08. In A.Y. 2008-09, no agricultural income had been shown by the assessee, therefore he treated agricultural income of ₹ 2.75 lacs as income from other sources. 14. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the learned CIT(A), who had confirmed the addition by observing as under:- 4.3 In this regard, it is observed that the A.O. has treated that agricultural income of ₹ 2,75,000/-, shown by the appellant, as income from the other sources as the land did not belong to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences filed by the appellant nor rebutted the same with the help of any supporting evidence. Also refer CIT Vs. Kulwant Rai 291 ITR 36 (Del.). Therefore, the addition so made may kindly be deleted in full. 17. At the outset, the learned D.R. supported the order of the learned CIT(A). 18. We have heard the rival contentions of both the parties and perused the material on record. The assessee has furnished the relevant agricultural record as well as crop grown on agricultural land. The land belongs to the family members, which was later on gifted to him by his father. It is immaterial whether the assessee has shown any agricultural income or not as it is facts that agricultural income mostly depended on nature. Further the learned Assessing Officer has not discharged his onus to disprove the evidences filed by the assessee, therefore, we delete the addition and Assessing Officer is directed to treat the agricultural income as such. Accordingly, we allow this ground in favour of the assessee and against the revenue. 19. Grounds No. VI and VII of the revenue s appeal are against deleting the addition of ₹ 1,20,000/- for household expenses. The learned Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry. There was no specific instances of suppression of expenditure on household. The assessee s family consist him, his wife and three children. The assessee s son has shown household expenses at ₹ 2.25 lacs apart from he has agricultural income. There was no social ceremony and marriage during the year under consideration. He relied upon the decision in the case of Raj Kumar Jain Vs. ACIT 50 ITD 1 (All) TM, Rohitash Yadav Vs. ITO 114 TTJ 973 (JP), Mrs. Cathriene Thomas Vs. DCIT 116 TTJ 797 (Coch) and requested to confirm the order of the learned CIT(A). 22. We have heard the rival contentions of both the parties and perused the material available on the record. The learned D.R. had not controverted the findings given by the learned CIT(A) and the Assessing Officer also has not brought on record any adverse material that the assessee incurred more than expenses on household withdrawals except made addition on surmises and conjectures, which is not permitted under the law. Therefore, we confirm the order of the learned CIT(A) on this ground. 23. In the result, the assessee s appeal is partly allowed and the revenue s appeal is dismissed. Order pronounced in the op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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