TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 881
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....der of the Assessing Officer, who had rejected the Assessee's books of accounts for the AYs 2007-08, 2008-09, 2009-10 & 2010-11 and applied the G.P. Rate of 5% (for three years) and 3.5% for the AY 2008-09? 2. With the consent of counsel for parties, these appeals are heard finally. 3. Assessee is a Road Contractor. He, for the relevant assessment years, which are the subject matter of the present appeals, had claimed a gross turnover of Rs. 19,67,67,039.08 for the AY 2007-08, Rs. 42,78,04,114.60 for the AY 2008-09, Rs. 52,17,54,048.00 for the AY 2009-10 and Rs. 73,92,42,831.00 for the AY 2010-11. 4. The Assessing Officer conducted proceedings and asked for various information. By elaborate reasoned order, the Assessing Officer conclude....
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....of the case, the important aspects which immerge from the present appeal are- 1. The Method of accounting has been accepted for several years on same set of facts. Reliance is placed on 294 ITR 655: [Gauhati] MKB [Asia) P. Ltd, v. Commissioner of Income-Tax 2. Non maintenance of stock register cannot be a ground for rejection of account in every case it depends upon the nature of business. 324 ITR 95 (Delhi) Commissioner of Income-Tax v. Jas Jack Elegance Exports 192 Taxman 167 (Delhi) & Commissioner of Income-Tax- XII v. Poonam Rani. 3. The onus was on revenue to show that accounts were incomplete or incorrect and true profits could not be deduced from the books of accounts maintained by the appellant which were also duly audited and....
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....dition made by the Assessing Officer to the tune of Rs. 12991319/ - is therefore, deleted. Appeal on these grounds is allowed." 6. This reasoning was adopted for another year i.e. AY 2009-10. However, in the other two Assessment Years, CIT(A) affirmed the reasoning of the AO, inter alia, in the following terms: "12. The appellant has argued that the A.O. "has failed to appreciate that the registers are required to be maintained as "Must Roll" as the requirement of Labour Law for the business and Assessing Authority has failed in appreciating the expenses incurred" such like. The expenditure are closely connected, and incidental to the work of the execution of contract without which the contracts cannot be completed. The appellant has sta....
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....d non-exceptional items (other receipts). For exceptional items, the net income is the same as the gross receipts because the appellant has admittedly not incurred any expenditure on earning this income. Regarding non-exceptional items, the AO. has estimated net profit @ 5% of these receipts. In fact, in the same line of business, a higher rate of net profit has been upheld in the following decisions: 1. Zora Singh v CIT (2008) 173 Taxman 76 (P&H) 2. Bandi Co-op. Labour & Construction Society v CIT (2008) 300 ITR 102 (P&H) 3. CIT v Bhawan & Park Nirman (2002) 258 ITR 676 (Raj) 4. Arihant Builders Dev. & Inv. P Ltd. v ACIT (2007) 106 ITO 10 (Indore)(SB) 5. Bhagyanagar Construction P Ltd. v ITO (1993) 46 ITO 236 (Hyd.] 6. ITO v Garg....
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....re rejected and the appeals of the Assessee for the two Assessment Years were allowed. The Revenue relies upon the findings of the Assessing Officer and highlights that besides the absence of Stock Register, the respondent-Assessee did not produce any material evidence in the form of invoices, contracts with its various sub-contractors and suppliers, the proof of quantities involved, muster rolls, vouchers etc. relating to supplies and all connected details which would have justified its claims. 9. Learned Senior counsel for the Assessee on the other hand contested the Revenue's submissions and stated that ITAT's findings are justified. It was submitted that mere absence of Stock Register per se could not have resulted in the rejection of ....