TaxTMI 
TaxTMI 
2018 (12) TMI 1387
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....000/- debited on account of the debits of Material Supplied by Contractees as unverifiable purchases. 1.2 That both the learned CIT[A] and the AO have failed to appreciate that Materials Supplied by Contractees is a Contra entry with Contract Receipts, which can only be cross checked. 1.3 The leaned CIT[A] gas erred in adopting he presumptive rate of 8% income of Contract receipts- despite the fact that the said section is not applicable in the present case 2. That the above grounds are independent and without prejudice to each other. 3. That the appellant seeks leave to add, amend, alter or abandon any of the above grounds at the time of hearing of the appeal." (2) There was a survey Under Section ("U/s") 133A of Income Tax Act, 1....
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....he aforesaid disclosure of additional income of Rs. 70,00,000/- at the time of survey, U/s 133A of I.T. Act, in accordance with the aforesaid statement of Mr. Vikram Kumar, Partner. The Assessment Order U/s 143(3) of I.T. Act was passed on 25.03.2013, in which an addition of Rs. 99,25,000/- was made by the Assessing Officer, on account of unverifiable expenses; and the total income was assessed at Rs. 2,39,93,740 (rounded off). The Assessee filed an appeal before Ld. CIT(A), objecting to the above mentioned addition of Rs. 99,25,000/-. The Ld. CIT(A) observed that the assessee had failed to produce certain bills for the expenditure claimed by the assessee. The Ld. CIT(A) also observed certain discrepancies/deficiencies in the bills of M/s S....
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....the assessee has shown gross profit of 12.65% and net profit of 2.94%. After the additional income offered during survey the gross profit stood at 15.74% and net profit at 6.03%. During assessment proceedings the assessee failed to produce several documents called for like copies of ledger account of wages, purchases , sundry creditors, unsecured loans, material purchase under different heads, work done and work in progress. The assessee had debited an amount of Rs. 99.25 lacs on account of material supplied by the contractee. The Assessing Officer asked the assessee to explain how the same was booked under expenses and to provide the ledger account of the material supplied by the contractee with supporting document of the bills to verify t....
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.... and the entire purchases had been made from M/s. Laxmi Cement Trading Co. In the period after 23.08.2009 the total closing balance was Rs. 45,63,373/-and included bills of Sriram Builders and Shri D K Builders wherein the bill number were not mentioned. Purchase of bricks was also debited to the cement account. * The brick account showed total purchases of Rs. 27,53,228/- in the post survey period and Rs. 19,18,323/- in the pre survey period. Bill numbers of number of parties were missing in the post survey period. * Aluminum fittings showed total purchases of Rs. 64.57.132/- in the post survey period and Rs. 27,85,225/-in the pre survey period. Bill numbers of number of parties were missing in the post survey period or were mentioned ....
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.... as most of the expenses were adequately supported and as some bills could not be produced therefore he had already surrendered additional income of Rs. 70 lacs. After considering all the facts as discussed in details above in The assessment order and submissions of the appellant show cause was issued vide order sheet entry dated 13.01.2015, to the appellant as to why his book results should not be rejected and profit rate of 8% not be applied After considering his reply I have no option but to reject the books of accounts of the appellant and determine income at 8% of the total turnover i.e. 8% of Rs. 22.67.91.668/- i.e Rs. 1,81,43,333/- out of which Rs. 1,36,79,725/- has already been shown by the appellant. The addition thus being sustain....
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....f this order. The relevant portion of the order of Ld. CIT(A) has also been reproduced for ready reference. In view of these deficiencies/discrepancies, we are satisfied that the Ld. CIT(A) had sufficient materials to reject the books of accounts of the assessee. However, we find that there is no discussion, in the order of the Ld. CIT(A), as to why, net profit rate of 8% was adopted by the Ld. CIT(A). The order of Ld. CIT(A) is not a speaking order. On the reason for adopting net profit rate of 8%, the Ld. CIT(A) has merely stated: "... After considering all the facts as discussed in details above in The assessment order and submissions of the appellant show cause was issued vide order sheet entry dated 13.01.2015, to the appellant as to w....