TaxTMI 
TaxTMI 
2020 (9) TMI 907
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....s. 84.21 lacs. During the course of assessment proceedings, the A.O. made ad hoc disallowance of various expenses. By the impugned order, the ld. CIT(A) had upheld the ad hoc disallowance of Rs. 10.00 lacs, against which the assessee is in further appeal before the ITAT. 4. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that during the year under consideration, the assessee had shown net profit of 10.41% on the gross contract receipts. However, in the A.Y. 2013-14, the Tribunal vide its order dated 24/01/2018 have deleted all the disallowances so made by the A.O.. The precise observation of the Tribunal was as under: "7. The Bench have heard both the sides on these issues. Although, the assessee has maintaining the books of account, which was accepted by the Assessing Officer in A.Y. 2011-12 & 2012-13, however, considering the various aspects recorded by the authorities below, the Bench are of the view that the rejection of books of account is justified. However, with regard to claim of estimation of net profit of business other than the grit business, the Bench find that the ld. CIT(A) h....
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.... assessee. As no question of law arises out of the order passed by the Tribunal, we find no fault with the order of the Tribunal declining to refer the question for our opinion. Consequently, all the applications filed under section 256(2) of the Act filed by the Revenue are hereby rejected." In assessee's case, the net profit rate subject to deduction of depreciation and interest comes @8.09% of the gross receipts, which is more than 8%. The working of the same as under: Particulars Amount Amount Profit shown by assessee As per P & L A/C PB pg 11 36,56,252 Less:- Profit from sale of Fixed Assets 6,28,379 Profit from contract and grit business 30,27,873 Add Depreciation 85,46,112 Interest Paid 39,20,689 Received -15,48,252 Net Interest Paid 23,72,437 Total business profit before interest and depreciation 1,39,46,422 Gross Receipts against contract 9,64,53,345 Gross Receipts against grit (As taken by AO) 7,58,25,218 Total receipts 17,22,78,563 % of profit on....
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....e claimed that he produced the books of account but the Assessing Officer was not available in the office but books were examined by the Inspector on behalf of the Assessing Officer. The ld Assessing Officer applied Section 145(3) and rejected the book result on the ground that required details of contract expense were not submitted before him. Therefore, we confirm the order of rejection U/s 145(3), which has not been challenged by the assessee. However, estimate made by the ld Assessing Officer and confirmed by the ld CIT(A) is higher side, which would give net profit rate of 12.84% before depreciation, which is not possible in contract business. It is also fact that required details of contract expenses were not submitted before the Assessing Officer and net profit has declined for which the assessee explained that price has gone up. He also referred the cost of inflation index for this purpose, which supports the assessee's claim. The lower authorities also have not compared the case with other assessee's for estimating the NP rate, therefore, in the interest of justice, we apply N.P. rate @ 5.1% on turnover of Rs. 14,71,70,861/- and remaining addition is deleted. The Assessing....
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....373 Net Surplus in Interest (+)283919 Total Income before Interest 4219429 Profit as per Estimation 4419103 Interest Profit shown by assessee 4737173 Paid 2461386 Further Addition if any 0 Received 2745305 Net Surplus in Interest (+)283919 Profit as per Estimation 4503349 Profit shown by assessee 4737173 Further Addition if any 0 Taking into consideration the submissions of the ld.AR of the assessee and orders of the lower authorities and also the decision as relied on by the assessee in the present case, we hold that the ld. CIT(A) is not justified in sustaining the addition of Rs. 34,00,450/- and the same is deleted. Thus Ground No. 1 of the assessee is allowed and Ground No. (i) and (ii) of the Revenue are dismissed. Considering all these relevant facts, the Bench hold that the ld. CIT(A) was not justified in sustaining the part addition in both bu....