TaxTMI 
TaxTMI 
2015 (11) TMI 1204
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.... civil contractor and carrying on a proprietory concern under the name and style of M/s Constructive Construction following mercantile system of accounting. For the Asst Year 2008-09, the assessee disclosed Rs. 2,64,20,951/- as its gross receipts. The gross contract receipts as per NSDL TDS records was Rs. 2,67,77,057/-. This was one of the defect noticed by the Learned AO in the details submitted by the assessee vis a vis the books of accounts maintained by the assessee. The Learned AO also found that the assessee had maintained a savings bank account with Allahabad Bank, Gariahat Branch, Kolkata which was also not disclosed in the books of accounts maintained by the assessee and accordingly found it as a defect in the books of accounts and proceeded to reject the books of accounts and determine the profit on an estimated basis u/s 145(3) of the Act. The net profit was estimated at 8% of gross receipts by the Learned AO and determined at Rs. 21,42,165/- (8% of Rs. 2,67,77,057/-). On first appeal, the same was brought down to 4% by the Learned CITA based on the average profit ratio of the assessee in the earlier years. Aggrieved, the revenue is in appeal before us on the following ....
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....source of income for the assessee is his business of contractor / subcontractor. The Learned CITA also found that out of the total credits in the undisclosed bank account, a sum of Rs. 22,25,000/- was also found credited. This was initially informed by the assessee as unsecured loans. However, no details for the same were produced before the Learned AO. Later the Learned CITA treated the sum of Rs. 22,25,000/- as turnover from undisclosed business of the assessee of being a contractor / subcontractor and determined the net profit thereon at 6% of turnover of Rs. 22,25,000/- . The Learned CITA also held that the only source of income for the assessee is from his contract business and the Learned AO having rejected the books of accounts and resorting to determine the net profit from business on an estimated basis, cannot make any separate addition towards peak credit from the undisclosed bank account and agreed to the proposition of the assessee that the credits in the said bank account are only towards business receipts. Accordingly, the Learned CITA directed the Learned AO to delete the addition towards peak credit in the sum of Rs. 91,96,120/- and directed to add 6% of sum of Rs. ....
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....eon as he found that profits from undisclosed business would normally be higher than the regular business profits as the assessee need not incur certain expenditure thereon. We also find that the finding given by the Learned CITA that the only source of income of the assessee is his income from contract / sub contract business has not been refuted by the revenue. Hence we are in agreement with the findings given by the Learned CITA in this regard. Accordingly, the ground no.2 raised by the revenue is dismissed. 5. The third issue to be decided in this appeal is as to whether the Learned CITA is justified in deleting the addition made in the sum of Rs. 9,01,870/- towards undisclosed sundry debtor. 5.1. The brief facts of this issue is that the assessee made a security deposit of Rs. 9,01,870/- with M/s Westinghouse Saxby Farmer Ltd for whom the assessee worked as a sub-contractor. As the payment of said security deposit was not reflected in the balance sheet filed by the assessee, the Learned AO proceeded to add the same as unexlianed investment u/s 69 of the Act. On first appeal, the Learned CITA found that M/s Westinghouse Saxby Farmer Ltd is controlled by Government of West....
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.... to get into the same books for making an independent addition towards security deposit. In any case, we find that the Learned CITA had given a categorical finding of the manner in which the security deposit was created in the earlier years and these findings have not been refuted by the revenue . Moreover, we hold that since the security deposits were made in the earlier years, the same cannot be the subject matter of addition as undisclosed income u/s 69 of the Act in the assessment year under appeal. Hence we are not inclined to interfere with the findings of the Learned CITA in this regard. Accordingly, the ground no. 3 raised by the revenue is dismissed. 6. The last issue to be decided in this appeal is as to whether the Learned CIT(A) is justified in deleting the addition of Rs. 74,826/- towards interest on fixed deposits by reckoning the same as business income as against the claim of the Learned AO as income from other sources. 6.1. The brief facts of this issue is that the assessee had derived interest income on fixed deposits of Rs. 74,826/- and credited the same in his profit and loss account and claimed the same as business income as the assessee had invested in f....