2012 (7) TMI 974

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....hri P.K. Jain, CA. ORDER PER K.D. RANJAN, ACCOUNTANT MEMBER This appeal by the Revenue for Assessment Year 2007-08 arises out of the order of Commissioner of Income-tax (Appeals)-XIII, New Delhi.  The ground raised by the Revenue is reproduced as under:- "On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 45,68,545/- on acco....

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....penses depended on the stage of work being undertaken by the assessee.  Moreover in some cases where there was only labour contract material was supplied by the contractee.  The AO asked the assessee to furnish evidence to substantiate this claim but no evidence was filed.  The AO rejected the books of account u/s 145 of the Act and estimated net profit of 5%. 3.  &nbsp....

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....rom the assessment order observed that there was nothing on record to suggest that the assessee had agreed to rejection of books of account and consequent estimation of net profit @ 5%.  The learned CIT(A) deleted the addition by observing as under:-  "From the details of turnover, material consumed and labour charges for FYs 05-06; 06-07 & 07-08 it is seen that the gross profit of th....

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....m of accounting and has maintained cash book and ledger.  Since there is no finding by the AO as to anything wrong with the method of accounting followed by the appellant therefore the application of 5% net profit rate by the AO being not in accordance with law, the addition made on this account is directed to be deleted." 4.       Before us the learned Sr. DR....