TaxTMI 
TaxTMI 
2016 (6) TMI 101
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....ed a miniscule portion of the vouchers relating to the total expenditure of the assessee, that the bills and invoices were huge in number and could not be produced before the Assessing Officer. However, the Assessing Officer noted that the assessee failed to produce the bills and vouchers till the date of passing the assessment order. The Assessing Officer also noted that for the assessment year 2009-10, the assessee had failed to provide an explanation for the defects noted during the survey under S.133A, that as a result, the assessee agreed to rejection of the books and estimation of profit under similar circumstances (though the assessee did not file any formal acceptance of such assessment). The Assessing Officer rejected the books of account for assessment year 2010-11 and estimated the income as follows-: i. For works awarded directly and executed directly, @ 8% of the turnover of Rs. 161,98,09,913 ii. For works awarded directly and sub-contracted, @ 5% of the turnover of Rs. 22,42,76,044 iii. Fro works sub-contracted from L&T and executed directly, @ 3% of the turnover of Rs. 62,94,5190 iv. For other incomes from sale of chips, @ 8% of the turnover of Rs. 1,04,47,06....
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....ayments had been made on the basis of cash vouchers after they were duly checked under signature by the staff on site, that the assessee had set up an internal audit system to keep a check on the financial and accounting procedures and correctness and that the appellant did not benefit from incurring expenditures duly vouched. He also submitted what while the primary plea of the assessee was that the rejection of books was not justified, the estimation of income at 8% of the turnover was high and arbitrary and that the Assessing officer should have allowed depreciation (of Rs. 4,18,41,000) and financial expense (Rs.1.46 crores) as a deduction from the estimated profits. 4. Learned CIT(A) however, has rejected the contentions stating as under- "12. I have considered the facts on record and the submissions of the AR. There is no dispute that the internal audit of the appellant had pointed out certain deficiencies in the books of the appellant. Whether or not the appellant stood to gain from these deficiencies was for the appellant to establish; other than stating that the appellant did not stand to gain from them, no evidence has been filed by' the appellant to establish this ....
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..../H/89, 29.8.94) Income estimated at 12.5% iii. Krishna Mohan Constructions (ITA 601-602/H/94 20.3.99) Income estimated at 12.5% iv. ITA 91/H/89, 30.6.03 Income estimated at 9%, net of all allowances and expenses. v. Citizen Estates (ITA 484/H/805, dt.31.10.07) Income estimated at 8% without allowance of interest or any other allowance vi. KNR Constructions (ITA 9/H/07, 30.11.09) Income estimated at 12.5% for main contractor and 8% for sub-contractor vii. Shri K.Ramkrishna Contractors (P) (ITA 461/Hyd/206, 4.12.2009 ) Income estimated at 8%. viii. Sai Vikram Builders (ITA 871/H/11, 27.12.11) Income estimated at 10%. Under the circumstances, the rates at which the Assessing Officer has estimated the profits are eminently and do not warrant any intervention. 18. The AR has also made the alternate plea that depreciation and financial charges should be allowed as a deduction from the estimated profits. However, reference may be made in this regard to the decision of the jurisdictional ITAT in the case of Srinivasa Laxmi Constructions (ITA 1347/Hyd/2010, 21.1.2011) where it was held that the decision in the case of Teja Constructions had not taken sec. 44AD into a....
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....Ltd. (in ITA No.461/Hyd/2006 dated 4.12.2009). 7. Learned Departmental Representative, however, referred to the order of the Assessing Officer and more particularly the fact that on similar circumstances assessee has accepted the rejection of books of account in assessment year 2009-10 and Assessing Officer estimated incomes on the same basis which was accepted by the assessee. 8. We have considered the rival contentions and perused the paper-books placed on record and case law on the subject relied on by the parties. There is no dispute to the fact that on similar reasons assessee has accepted the rejection of books of account in assessment year 2009-10 and Assessing Officer has estimated income on similar basis. Only grievance of assessee is that the resultant addition is more in this year, therefore the dispute. 8.1 On a turnover of Rs. 226.14 crores in assessment year 2009-10, assessee admitted a profit of Rs. 12.91 crores (5.7%). During the year under consideration, the turnover was Rs. 205.39 crores and the profit admitted in Profit & Loss Account was Rs. 9.63 crores (4.68%). The reasons given by the Assessing Officer in assessment year 2009-10 for rejection of books after....
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....ation. 8.4 Coming to the estimation of income, as extracted in the brief facts above, Assessing Officer completed assessment in both the years estimating on same basis i.e. 8% on own works and 5% on sub-contract works assigned, 3% on sub-contract works undertaken. These rates are generally approved by ITAT in various orders a stated by learned CIT(A) in the order. 8.5 Learned counsel relied on various case-law particularly in the case of K.Ramakrishna Contractor P. Ltd. in ITA No.461/Hyd/2006 dated 4.12.2009. The question in that case was as under- "2. The first ground raised by the assessee is that the CIT(A) erred in upholding the estimate of income at 12.5% of the gross contract receipts. The contention of the assessee counsel is that the assessing officer estimated the profit of the assessee at 12.5% and granted depreciation which is at higher side and the assessee declared the income at 9% before allowing the depreciation the same to be accepted or the order of the Tribunal in assessee's own case for the assessment year 2003-04 to be followed wherein the Tribunal in its order dated 23.10.2008 in ITA No.1112/Hyd/2007 held that income to be estimated at 8% in respect of work....