TaxTMI 
TaxTMI 
2015 (8) TMI 1091
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....erest paid to banks and interest received on FDRs." Ground of ITA No. 284/JP/2013 "On the facts and in the circumstances of the case, the ld CIT(A), Kota has erred in:- i) restricting the addition at Rs. 14,87,696/- by applying NP rate of 9% as against total addition of Rs. 20,66,244/- made by A.O. by applying NP rate of 12.50%; ii) deleting the addition of Rs. 3,99,086/- out of total addition of Rs. 4,08,112/- on account of applying net profit on credits appearing in Bank Account; iii) deleting the addition of Rs. 7,98,000/- made by the A.O. on account of unexplained cash deposits." 2. Ground No.1 of the assessee's appeal as well as revenue's appeal are against arbitrarily taking net profit ratio 12.50% instead of 5.66% and restricting the addition of Rs. 14,87,696/- by applying NP rate of 9% as against total addition of Rs. 20,66,244/- made by the A.O. by applying NP rate of 12.50%. The ld Assessing Officer observed that the assessee filed return for A.Y. 2008-09 on 25/10/2008 at Rs. 9,02,010/-. The case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act). He further observed that he had issued notice U/s 143 (2) on 03/09/200....
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....ed an affidavit that there was a dispute with the accountant and he was not given the books of account. Therefore, he is unable to produce the complete books of account for verification. The assessee was agreed to assess his income @ net profit of 8%. The ld Assessing Officer made assessment in absence of complete books of account, non-cooperation of the assessee in producing the bills/vouchers and he decided the case. He relied on the decision of the Hon'ble Rajasthan High Court in the case of Shri Ram Jhanwar Lal Vs. ITO & Ors. 177 Taxman 135 and Suman Steel Vs. Union of India 127 Taxman 353 and applied 12.5% C.P. on total receipt of Rs. 1,65,29,950/-, which was worked out at Rs. 20,66,244/-, which was the total income earned from the contract business by the assessee. The penalty proceeding U/s 271(1)(c) was also initiated for concealment of income. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal partly by observing that the Assessing Officer as well as the ld CIT(A) are right in confirming the rejection of book result. However, in his opinion by considering the turnover of the assessee....
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.... the Assessing Officer, confirmed by the CIT(A) is not justifiable. The justification of decline of NP rate has been submitted before the ld CIT(A) that certain expenditures were incurred in the year under appeal for the first time, which were not there in the preceding years. The assessee had debited sales tax at Rs. 2,64,269/-, which had reduced the profit by 1.6%. Similarly the labour expenses had increased. There was a tough competition in awarding the contract at lower rate compared to rate received in the preceding year, which ultimately resulted into lowering the profit of the assessee. The ld Assessing Officer relied upon the case, which are distinguishable on facts and circumstances. Finally he submitted that 9% rate confirmed by the CIT(A) is very higher side and same is deserved to be reduced to a reasonable profit rate subject to statutory allowing of depreciation and interest. 5. At the outset, the ld DR has vehemently supported the order of the Assessing Officer and argued that as per audit report, the assessee was maintaining books of account on computer, which cannot be taken by the munim/accountant. The assessee might have generated the hard copy of the books of....
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.... 7153, in which various deposits were made. The account was partly credited through cash deposit and partly from clearings. As the assessee had not produced complete books of account, purchase and sales and other expenses vouchers for verification to the Assessing Officer, therefore, it was difficult to verify the deposits made in the bank account by the Assessing Officer. The ld Assessing Officer observed that the amount received through clearings in this bank account were from out of contract receipt but cash deposited in the bank account is undisclosed income of the assessee. On page 4 of the assessment order, the ld Assessing Officer had given detail of cash deposited in the bank account to the tune of Rs. 34,64,896/-. The ld Assessing Officer enquired from the bank about these deposits made but the bank had also not supplied the details of these deposits. He finally concluded that these undisclosed cash deposits is also from the contract business, therefore, he applied 12% C.P. rate on Rs. 32,64,896/- and made addition of Rs. 4,08,112/- in the income of the assessee. 8. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(....
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..... 9,026/-. This Bench has confirmed the addition @ 9% C.P., therefore, no addition is required to be made on account of any discrepancy in the bank account. As held by the Hon'ble Rajasthan High Court in the case of CIT Vs. G. K. Contractor 19 DTR 305 (Raj) wherein the Hon'ble Jurisdictional High Court held that when net profit is estimated by the Assessing Officer by rejecting the book result U/s 145(3) of the Act, no separate addition can be made on account of cash creditor, which is squarely applicable in the case of the assessee. As we have already decided the net profit @ 9% in the case of assessee, therefore, other additions cannot be made. Accordingly, revenue's appeal ground No. 2 is dismissed. 12. The 3rd ground of the revenue's appeal is against deleting the addition of Rs. 7,98,000/- made by the Assessing Officer on account of unexplained cash deposits. The ld Assessing Officer observed that on verification of bank account, the assessee has deposited cash on different dates to the tune of Rs. 7,98,000/-, which includes DD cancellation of Rs. 90,000/-. The assessee has not explained source of these cash deposits, therefore, he made addition of Rs. 7,98,000/- in the tot....