2011 (1) TMI 1349

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....6-07. 2. The first issue in this appeal of assessee is against the order of CIT(A) in confirming the book results. For this, assessee has raised the following ground No.1:- "(I) Rejection of Book Result:- (1) The learned Commissioner of Income-tax (Appeals) erred in confirming rejection of Book Result disregarding the fact that the books and records were destroyed in floods. (2) The appellant submits that mere fall in gross profit without pointing out any specific defect cannot be considered sufficient for rejection of Book Result. On the facts and in the circumstances of the case and as per law, the Book Result ought to have been accepted." 3. At the outset, it is noticed from the orders of lower authorities that assessee....

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....tion of gross profit estimated at Rs. 14,61,504/-. For this, assessee has raised the following ground No.2:-  "(II) Estimate of Gross Profit:- (1) The learned Commissioner of Income-tax (Appeals) erred in confirming estimation of gross profit at 33.97% when the gross profit was better than that shown in A.Y. 2004-05 and in respect of fall from earlier year, reasons were furnished and which have not been rejected. (2) On the facts and in the circumstances of the case and as per law, the addition made by estimating gross profit at Rs. 14,61,504/- may be deleted." 5. The brief facts leading to the above issue are that the assessee is engaged in the business of civil and mechanical contractor. The Assessing Officer during the a....

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....on that the profit in second option should be taken as the profit of this year also, that is at 33.97%. This leads to estimation of gross profit at flat 33.97% in following manner:   In Rs. Particulars A.Y. 2006-07 Turnover 29496133 G.P. Margin Rs.85,58,332 i.e.@ 29.02 Estimated G.P @ 33.97 Rs. 1,00,19,836 Difference Rs.14,61,504 Aggrieved, assessee preferred appeal before CIT(A). Before the CIT(A), the assessee produced the comparison sheet of gross profit and narrated the entire the percentage of turnover, consumables, labour wages, subs-contract expenses, contract expenses, hire charges and other deductions/direct expenses as under:-   Particulars A.Y. 2006-07 A.Y. 2005-06 A....

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....4 which is 15.87%, which is not considered by lower authorities. In case the lower authorities want to estimate of average of lasts three years, they should adopt the average of last three years strictly and including this assessment year also i.e. 4th assessment year. Accordingly, we direct the Assessing Officer to adopt the GP as under:-                                                                    &nb....

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....nbsp;             2004-05                  27.88                                                                                                   ....