TMI Blog2012 (1) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... nd CIT(A) were not justified in applying the provision of section 145(3) of the I.T. Act. 3. On facts and in the circumstances of the case Lnd. CIT(A) was not justified in confirming the N.P. Rate of 12% on the net contract receipt and the application of flat N.P.Rate of 12% is highly excessive without any basis, material and data on the record. 3. Despite service of notice none appeared on behalf of the assessee. We proceed to decide the appeal after hearing learned D.R. for the Revenue in view of the smallness of the issue. The issue raised by the assessee is against rejection of books of account under the provisions of section 145 (3) of the Act and application of net profit rate of 12% on the net contract receipts. The assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled road as civil contractor. The assessee claimed that its return of income was backed by tax audit report and trading, Profit Loss Account and balance sheet were annexed to the return of income. The assessee further claimed that books of account were produced before the ACIT which were rejected as the assessee had not maintained stock register and muster roll and also not produced proper vouchers in respect of expenses debited to Profit Loss Account. The assessee claimed that there was a theft from his car in which muster roll, bank statement, etc. were stolen and copy of FIR was filed before the ACIT. Further it was pointed out that the assessee had shown NP rate or 5.23% on the net payments after deduction of material supplied. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the books of account had been rejected, arose before the Tribunal in Shri Sukhwinder Singh Vs. ITO (supra). The Tribunal in Sukhwinder Singh Vs. JCIT, Kurukshetra in ITA No.1461/Chd/2010 vide dated 24.11.2011 held as under : 10. The second issue to be addressed in the case is the application of NP ratio. The Tribunal (supra) in assessee s own case relating to assessment year 2005-06 had directed the application of net profit rate of 1.08% to the gross receipts of Rs.3.22 crores in comparison to net profit rate of 6.5% to the total receipts applied by the Assessing Officer. The CIT (A) during the year under consideration had rejected the claim of the assessee in view of the ratio laid down by the Hon ble Punjab Haryana High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een further laid down by the Hon'ble Jurisdictional High Court that where the books of account have been rejected, the estimation of income by applying of flat rate inherently involves an element of subjectivity. 8. In view of the aforesaid decision and the facts being similar, we find no merit in the adoption of NP rate of 12% to determine the income in the hands of the assessee. We direct the Assessing Officer to determine the income in the hands of the assessee by applying the net profit rate of 7% as the assessee has failed to produce complete vouchers to establish its case. The ground No.2 of appeal raised by the assessee is dismissed and ground No.3 is partly allowed. 9. In the result, the appeal filed by the assessee is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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