TaxTMI 
TaxTMI 
2012 (9) TMI 181
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....ified in making further addition on the basis of entries found in the books of account which were rejected by the Assessing Officer and profit of the assessee was estimated @ 12.5% by him. 3. The brief facts of the case are that the assessee is a civil contractor and filed his return of income for assessment year 2006-07 showing income of Rs. 4,53,925/-. The assessment was completed u/s 143(3) on 2.12.2008 at an income of Rs. 48,68,425/-. In the assessment made, the Assessing Officer rejected the books of account and estimated the income by applying the rate of 12.5% on the gross amount and arrived at the business income of the assessee at Rs. 25,25,312/- and after allowing credit of 4,85,844/- shown by the assessee, made an addition of ....
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....ly because entries appeared in the books of certain business whose income had previously been computed on percentage basis, and therefore, cash credits in question could be assessed to tax as income from undisclosed sources in addition to business computed by estimate. He observed that the same ratio has been held in the case of Devi Prasad Vishwanath Prasad, 72 ITR 194 (S.C). 5. The A.R of the assessee reiterated the submissions made before the CIT(A) and submitted that the Hon'ble Jurisdictional High Court in the case of CIT vs A.Vajjiram and Bros.[2010] 326 ITR 551(Mad), supports the case of the assessee wherein it is held that when the books of account are rejected and income is estimated, no addition to be made for unexplained cash ....
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....y the assessee-firm ?" 8. The Hon'ble High Court replied as under: "3. We have heard the argument of the learned counsel for the Revenue. 4. As against the estimate made by the Assessing Officer, on appeal, the Commissioner of Income-tax (Appeals) has sustained the addition in a sum of Rs. 12,67,933. He had estimated the profit of the assessee at 8 per cent. of the contract receipts. He interfered with the assessment order on the ground that if the total addition made by the Assessing Officer is allowed to remain or accepted, then the net profit of the assessee is nearly 28 per cent., which is not at all possible in the nature of the work undertaken by the assessee. The estimation have been made on the sole ground that the accounts....
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....Court in the case of CIT vs Revathi Equipment Ltd [2008] 298 ITR 67(Mad) and submitted that the assessee had paid the advance tax on the basis of income estimated by him. The assessee would not know of any addition which would come to be made by the Assessing Officer and therefore, as held by the Hon'ble Jurisdictional High Court, the assessee was not liable to interest u/s 234B of the Act. 12. We find that the Hon'ble Jurisdictional High Court in the case of Revathi Equipment Ltd (supra) has held as under: "Held, dismissing the appeal, that the assessee had paid advance tax after deducting the payment made under the voluntary retirement scheme. In view of the decisions of the jurisdictional High Court the assessee was allowed to dedu....