TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 596
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....e Tax Act, 1961 (hereinafter referred to as the 'Act') dated 31.03.2015. 2. The grievances raised by the Revenue are as follows: 1."Whether in the facts and circumstances of the case and in law, the ld. CIT(A) is justified in arbitrarily determining a rate of 4% to disclosed turnover, without taking into account the details, about the practices of the assessee in the earlier years, mentioned in the assessment order by the A.O?" 2."Whether in the facts and circumstances of the case and in law, the ld. CIT(A) is justified in allowing huge relief with tax effect of Rs. 1,35,73,413/- without citing cogent reasons?" 3."That the appellant craves leave to add, alter and/or modify, substitute all or any of the grounds of appeal, during the c....
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....vendors at Mumbai and he also submitted a list of vendors for whom the payment was to be made which was given by Mr. P. Todi, as annexured enclosure D and E of such statement and which was the part of AO order as well at annexured enclosure I & II. 4. After considering of such statement and the documents as furnished by the said director, it was observed that in the case of M/s. Gaurav Logistics which is part of list submitted in statement u/s 131 of the Act, the payments which were made to such concern on earlier occasions was only Rs. 50,000/- in cash and the balance payment was made on RTGS/NEFT. The director Mr. P. Todi in his statement had contended that the cash amount purported to be paid to such concern was Rs. 28,00,000/- which wa....
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....". The aggregate amount of cash towards the share application money alleged to have been received by the assessee is Rs. 137.35 Lakhs whereas Mr. L.K. Todi in his Balance Sheet as on 31.03.2012 had shown the share application money given to the assessee company at Rs. 2,01,00,000/-. The ld AO noticed that there was no explanation about the lorry hire charges of Rs. 1,28,37,093/- and he also noticed difference in the cash balance shown by the assessee. For these reasons, the ld AO observed that the books of accounts of the assessee cannot be relied upon as the assessee's accounts contained mal-practices, as explained above, therefore, he applied net profit @8% on the disclosed turnover of the assessee. The net profit was derived at Rs. 4,78,....
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.... by the ld CIT(A) should be sustained. 9. We have given a careful consideration to the rival submissions and perused the materials available on record, we note that the materials brought on record by ld assessing officer, and pointing out specific defects in books of accounts should be considered. The ld AO pointed out the specific defects in the handwritten cash book, he also noticed malpractices in share application money, lorry hire expenses and other many defects in books of accounts of the assessee and therefore he rejected the books of accounts of the assessee and estimated profit at the rate of 8% of disclosed turnover. We also note that simply because books of accounts are audited by a chartered accountant is not a proof in itself ....
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....erage % of last 4 years - 2.74% From the above past profit history chart of the assessee, it is abundantly clear that the average rate of profit of last four years was @ 2.74% of Turnover before Depreciation. Even if immediately preceding year's percentage is considered, it is 3.90%. On that basis estimated net profit @ 4% of turnover of Rs. 59,83,70,923/- will be Rs. 2,39,34,837/-. This net profit would be before depreciation, and depreciation allowance should be provided separately. 11. Whether depreciation allowance should be provided separately or not. In this regard we note that in a recent decision of the coordinate bench of ITAT Amritsar in the case of ACIT vs. J. S. Grover Construction (181 TTJ 23), it has been held that depre....