TMI Blog2021 (5) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... age embedded the undisclosed receipts is to be taxed. To meet the ends of justice, if the profit percentage @ 5% on the undisclosed receipts is taxed in the hands of the assessee.. Therefore, direct the AO to determine the net profit @ 5% of the undisclosed receipts. Accordingly, this ground is partly allowed. Disallowance of 3.5% of the expenses - HELD THAT:- On perusal of the orders of lower authorities, find that since the assessee failed to submit the ledger accounts for expenses supported with bills vouchers to the extent of ₹ 84,60,600/-, and considering the fact that the assessee has shown net profit @ 1.6% of the expenses, the AO disallowed the same on estimate basis @ 3.5% of ₹ 84,60,600/-, which comes to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e record of the case. On verification of the balance sheet, the AO noticed that bills amounting to ₹ 5,11,550/- is outstanding for payment to the assessee. Since the contract works are over and the assessee is following mercantile system of accounting, the AO added the same to the total income of the assessee, as all expenses have been incurred, which was upheld in first appeal. 5. Ld. A.R. of the assessee submitted that the amount of ₹ 5,11,550/- is already formed part of gross receipts disclosed since this disputed amount was received in subsequent year, therefore, the assessee had shown the amount as bills receivable. He submitted that same cannot be treated as undisclosed receipts of the assessee. It was his alternative s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% of the undisclosed receipts. Accordingly, this ground is partly allowed. 8. The next issue is regarding disallowance of 3.5% of the expenses, totaling to ₹ 2,96,121/-. 9. I have heard the rival submissions. On perusal of the orders of lower authorities, I find that since the assessee failed to submit the ledger accounts for expenses supported with bills vouchers to the extent of ₹ 84,60,600/-, and considering the fact that the assessee has shown net profit @ 1.6% of the expenses, the AO disallowed the same on estimate basis @ 3.5% of ₹ 84,60,600/-, which comes to ₹ 2,96,121/-. The contention of the ld. A.R. of the assessee is that the percentage of profit determined by the AO is on higher side and requeste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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