TaxTMI 
TaxTMI 
2013 (3) TMI 687
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....Tubro Ltd, Rishab Telenic, etc. During the year under consideration, the assessee has declared a gross profit rate of 10.20% as compared to 15% declared in the immediately preceding year. The A.O. has noticed that the assessee did not maintain stock register for the material consumed on the dayto- day basis. He has also not maintained proper vouchers for the expenses, inter alia. Accordingly, the books of account of the assessee were rejected and provisions of section 145(3) invoked. In the assessment order made u/s 143(3) on 24.12.2010 various additions are made and total income has been computed at Rs. 3,49,53,380/-. Aggrieved, by these additions the assessee filed first appeal and the ld. CIT(A) has deleted some of the additions. But,....
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....IT(A) in both business at Rs. 80,000/-, we sustain the addition of Rs. 30,000/- and partly allow this ground. 6. Facts apropos ground Nos. 3 and 4 which are interconnected, are that the assessee has been carrying on the contract business in the name and style of M/s Mohan Construction Company. In the original ground there was a clerical error which has been revised because the figure of addition sustained as per the ld. A.R./assessee is Rs. 36,04,876/- and not Rs. 26,25,393/-. During the year under consideration the assessee has declared gross profit rate of 10.20% in respect of business conducted in the name of M/s Mohan Construction Co. which is found to be lower as compared to 15% disclosed in the immediately preceding assessment year....
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.... legal position on this issue. It is found that the A.O. after rejecting the books of accounts us/ 145(3) and by adopting a N.P. rate of 12.5% has made additions in the trading results of assessee's businesses carried under both the names i.e., in M/s. Mohangarh Construction Company of Rs. 26,25,393/-. The ld. CIT(A) has also sustained these additions. 9. After hearing both sides we have noticed that G.P. Rate disclosed in this year is slightly low as compared to the immediately preceding year but N.P. rate has increased. The comparative position of these rates can be easily captured from the following chart :- CHART OF G.P. FOR THE LAST FOUR YEARS A.Y. GROSS RECEIPTS G.P. G.P. RATE NET PROFIT N.P. RATE 2005-06 ....
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....that of the assessee. He cannot tear out of context by cherry picking no such addition can be allowed to be made. The A.O. has adopted the N.P. rate but has ignored the N.P. Rate of the assessee disclosed in the immediately preceding year. The N.P. Rate of this year is better than the earlier year. Therefore, no addition, like one made by the A.O. is not justified. The ld. CIT(A) has also confirmed the same. On a wrong premise by following the reasons given by the A.O. and by not considering the contention of the assessee. In out considered opinion the first time imposition of Entry Tax of huge amount of Rs. 9,69,454/- as per assessee Paper Book page 18, which fact has not been denied or disputed by the revenue, is a good ground and factor ....
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....est income on FDRs of Rs. 14,16,842/-. As per the assessee these FDRs or NSCs were purchased on account of business exigency for the purpose of obtaining contract and the same are pledged with the PWD Authorities. Therefore, the interest income has to be treated as a part of business receipts. But as per A.O. the interest income has to be treated as 'income from other source". The ld. CIT(A) has also sustained addition of Rs. 14,16,842/-. In this regard ld. A.R. Shri Jain has placed his reliance on the decision of this very Bench rendered in the case of Jain Construction Co. On the other hand ld. D.R. has relied on a decision of Jaipur Bench. 12. After hearing both sides we are of the considered opinion that the rule of consistency deman....