TaxTMI 
TaxTMI 
2012 (9) TMI 188
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....essee raised common grounds. 3. The assessee has raised common grounds for these two years regarding rejection of books of account, which has been upheld by the CIT( Appeals). 4. The assessee company is engaged in execution of civil contract works and property development. During the assessment proceedings the AO noticed that that the assessee has claimed huge expenditure against the gross receipts of civil works executed during the year. The said expenditure was claimed under the head "Contract and Property Development, Administrative expenses and Finance charges". On verification of bills and vouchers in respect of the materials, wages and travelling expenses etc., the AO found that many of the vouchers are self-made without showing....
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...., there were no sub-contract agreements and in case of some of the sub-contractors, they are not even assessed to tax. Similarly, the AO noted that similar charges shown under other work expenses and the assessee has accepted that the sale tax deduction was wrongly taken as such charges. The assessee could not furnish supporting details in respect of claim made under assignment commission and professional charges. The assessee also could not furnish break-up of inventories shown under current assets. In view of the huge discrepancies in the accounts, the Assessing Officer rejected the books of account and estimated the profit on gross contract receipts at 12.5% clear of depreciation. The assessee challenged the action of the AO before the C....
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....e assessee has failed to justify the reasons for not furnishing the supporting evidence, details as well as non conciliation of the gross discrepancies in the records. Therefore we do not find any substance or merit in the appeal of the assessee on this issue. The order of the CIT(Appeals) is upheld on this issue. As far as the other issue raised in the assessee's appeal regarding estimation of profit, in view of our decision in the revenue's appeal, the appeal of the assessee becomes infructuous. 6. For the assessment year 2003-2004 the assessee has also raised a ground as under: "6. The CIT(A) erred in confirming the separate addition of Rs. 4,44,577/-, without any basis, under the head 'other sources' while estimating the income of....
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....ssment years as under: "1. The Hon'ble CIT(A) erred in allowing appeal by directing the AO to estimate the profit at 10% on the contract receipts and to allow depreciation. 2. The Hon'ble CIT(A) ought to have considered the contention of the AO which was based on the decision of the Hon'ble ITAT, Hyderabad B Bench in the case of M/s Krishnamohan Constructions and other cases." 11. We have heard the learned Departmental Representative as well as the learned AR of the assessee and considered the relevant material on record. As we have discussed in the forgoing paras that the AO rejected the books of account and estimated the profit at 12.5% of the gross contract receipts for these two years. On appeal, the CIT(Appeals) has restricted....
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....hat the profit rate of 12.5% is reasonable in the facts and circumstances of the case." 12. The issue is now settled as decided by the 3rd Member decision of this tribunal in case M/s Krishnamohan Constructions, Hyderabad(supra). Hence, to maintain the principle of consistency, we follow the earlier decision of this tribunal and accordingly hold that the profit rate could be at 12.5% of the gross receipts and further claim of depreciation is allowed. Accordingly, we modify the order of CIT(Appeals) on this issue and estimate the profit rate at 12.5% and further allow the claim of depreciation from the said profit. 13. For the assessment year 2005-06 the assessee has raised the following grounds: "1. The order dated 26/03/2009, p....