2015 (5) TMI 1073

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....ssessment proceedings. 2. The brief facts of the case as noted in assessment order are that the assessee is engaged in the business of advertisement and publicity and is working as contractor. During the year under consideration, the assessee filed return of income declaring gross receipt of Rs. 47,87,763/-. However, during assessment proceedings, the A.O. from Form 26AS observed that gross receipts of the assessee were Rs. 89,81,785/- and, therefore, assessee was show caused as to why the difference of turnover as reflected in Form 26AS and as declared by assessee, be not included in the income of the assessee. In reply, the assessee submitted that the audited balance sheet was prepared from corrupted data and, therefore, the figures cont....

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....ot look into this aspect of A.O.'s repot and confirmed the addition. Ld. A.R. submitted that the assessee during earlier three years had been declaring net profit ranging 6% to 8% and the same were being accepted, therefore in the current year also, the same ratio should be accepted specifically in view of the recommendations of the A.O. during remand proceedings. Ld. A.R. submitted hat the addition confirmed by Ld. CIT(A) has given very absurd picture of P & L account wherein the net profit comes out at 55% of gross receipts which is not at all believable and achievable. Ld. A.R. further submitted that inclusion of entire turnover without giving allowance for expenses is against law and there are various decisions of Hon'ble High Court....

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....ACIT in I.T.A. No. 2777 to 2778/Del/2010 and also relied upon the case law of Ganesh Rice Mills Vs CIT decided by Hon'ble Allahabad High Court and on the basis of above case laws and on facts of the present case, Ld. D.R. strongly argued that the addition made by A.O. needs to be confirmed. 6. We have heard rival parties and have perused the material placed on record. We find from the written statement placed in paper book that assessee had declared net profit for earlier three years as under and the results declared by assessee were accepted during assessment proceedings:- Assessment Year Gross receipts N.P. N.P. rate 2006-07 38,05,126 3,04,411 8% (under 44AD) 2007-08 50,78,403 3,05,742 6% (as per books of a/c) 2008-09 29,57....

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....nd the sales only represent price received by seller of goods but for achieving of such sales, it had already incurred the cost. The findings of Hon'ble High Court as contained in para 3 are reproduced below: "Having perused the assessment order made by the A.O., the order made by the Commissioner (Appeals) and Tribunal, we are satisfied that the Tribunal was justified in rejecting the application u/s 256(1). It cannot be a matter of an argument that the amount of sales by itself cannot represent the income of the assessee who has not disclosed the sales. The sales only represent the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the realization of excess over the costs i....