2016 (3) TMI 19

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....er reasons and hence the same kindly be deleted. 2.1 Rs. 30,98,811:- The ld CIT(A) erred in law as well as on the facts of the case in invoking Sec. 145(3) of the Act. The provision so invoked being contrary to the provisions of law and facts, the same may kindly be quashed. Consequently the trading addition of Rs. 30,98,811/- kindly be deleted in full. Alternatively and without prejudice to above 2.2. Rs. 30,98,811/-: The ld CIT(A) further erred in law as well as on the facts of the case in applying the NP rate of 6.28% (after depreciation, interest & remuneration to partners) as against NP rate of 5.16% declared by the assessee and 8% applied by the A.O. (after to depreciation, interest & remuneration to partners). The addition so made and partly confirmed by the ld CIT(A) is totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full. 3. The ld A.O. further erred in law as well as on the facts of the case in charging interest of Rs. 8,91,033/- U/s 234B of the Act, interest of Rs. 55,595/- U/s 234D of the Act and in withdrawing interest granted of Rs. 1,04,059/- U/s 244A of the Act. The appellan....

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....g inventory and also had not maintained any details, vouchers, registers, payment sheets and muster roll. The manufacturing expenses include labour wages, various materials purchased, transportation and truck. The assessee had also not maintained any sitewise record in respect of work carried out by it at different sites during the year. In absence of stock register, it is not possible to verify the consumption of various material, labour, work done, therefore, the net profit shown by the assessee in both the years are not amenable to verify. The ld Assessing Officer on the basis of defects pointed out in assessment order had held that in assessee's case, no correct profit can be deduced, therefore, he applied Section 145(3) of the Act and proposed 8% NP rate for A.Y. 2009-10 and 15% NP rate for A.Y. 2011-12. In A.Y. 2009-10, the ld Assessing Officer has observed that the assessee had shown interest income of Rs. 19,73,753/- earned on FDRs, which has not been shown separately by it. The assessee had also not filed any detail of expenses whatever the income shown to have been earned by it from rent of machine, therefore, the amount of Rs. 9,10,000/- was also added to the income of t....

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....e totaling to Rs. 28,53,755/- and this NP had been estimated by her with reference to the NP shown by the appellant himself after reducing depreciation, interest and remuneration to the partner. The hire charges and interest income was treated as income from other sources by the ld CIT(A) in A.Y. 2009-10. 3.1 In A.Y. 2011-12, the ld CIT(A) has held that net profit rate of 13.73% before depreciation, interest and remuneration to partners in this year is almost same as in A.Y. 2010-11, which is much higher than the rate of 10.21% in A.Y. 2009-10 and 10.32% in A.Y. 2008-09. In view of the Hon'ble ITAT and CIT(A) order, the book result were accepted by the ld CIT(A), accordingly addition was deleted. 4. Now in A.Y. 2009-10, the assessee is against confirming the addition of Rs. 33,98,811/- confirmed by the ld CIT(A) under the head disallowance of PF & ESI for Rs. 54,264/- whereas revenue is against reducing the NP rate from 8% to 6.28% and treating the income from hire charges and interest as business income. In A.Y. 2010-11, the revenue was against not confirming the addition @ 15% NP rate and disallowance U/s 40(a)(ia) at Rs. 19,46,279/- for non-deduction of tax U/s 194H of the....

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....f the ld CIT(A) at page No. 13 on this aspect is fairly incorrect and also her observation that Assessing Officer was not specified about the declared NP rate in A.Y. 2007-08 and the appellant tried to look that the declared NP as much higher, is misleading and baseless. The ld AR further relied on the decision in the case of CIT Vs Amrapali Jewels (P) Ltd. (2012) 65 DTR 196 (Raj.) for net profit rate. He further argued that the interest income of Rs. 19,43,753/- on FDR and Rs. 9,10,000/- from rent of machine is part of business receipt. The FDR were placed with various government departments. The appellant is bound to furnish performance security and to place various FDRs on account of guarantees. The appellant had declared hire charges income and interest income in P&L account as business income for last several years by changing the head income from other sources, would disturb the simplicity and consistency. Therefore, the addition confirmed by the ld CIT(A) is required to be deleted. 4.1 For A.Y. 2011-12, the ld AR of the assessee has argued that the assessee has shown net profit rate of 12.62% subject to interest, depreciation and remuneration to the partner against net pr....

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.... to maintain proper books of account namely stock register, labour charges register, qualitative details and record of the invoices, therefore, on account of record has rightly been rejected by the authorities below, considering the facts and circumstances, in the interest of justice, we confirm lump sum addition of Rs. 12 lacs and assessee get relief of Rs. 7,46,289/-. 6.2 Accordingly ground No. 1 of the assessee's appeal for A.Y. 2009- 10 is dismissed and ground No. 1 of the revenue's appeal in A.Y. 2011- 12 is partly allowed. 7. Ground No. 3 of the assessee's appeal for A.Y. 2009-10 is consequential in nature, therefore, no adjudication is required. Accordingly, this ground of appeal is dismissed. 8. The assessee has raised additional ground on addition confirmed by the ld CIT(A). The assessee has taken any ground before the ld CIT(A) on this issue of payment of PF and ESI as cleared from form NO. 35 for A.Y. 2009-10, therefore, at this stage, the assessee is not entitled to raise additional ground without raising this issue before the ld CIT(A), which is also not permitted under the law. Accordingly, this addition ground raised by the assessee is dismissed. 9. Groun....