TaxTMI 
TaxTMI 
2022 (9) TMI 961
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....ssessment year 2016-17 wherein the grounds of appeal read as under:- 1. "Whether on the facts and circumstances of the case the ld. CIT(A) has erred in partly allowing the appeal of the assessee by considering net profit to be taken @ 6% instead @ 10% taken by the AO, whereas, in similar cases of Civil Contractors, Hon'ble Punjab & Haryana High Court and ITAT, Chandigarh have held net profit rates of 10% to 12% to be reasonable & justified? 2. Whether on the facts and circumstances of the case the ld. CIT(A) has erred in allowing the appeal of the assessee by deleting the addition of Rs. 6,50,35,836/- made u/s. 68 of the Income Tax Act, 1961, since no supporting evidence had been submitted by the assessee to establish creditworthine....
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.... net profit rate of 6%, as against 10% net profit applied by the AO, as fair and reasonable based on comparable cases engaged in similar line of business wherein the contract receipts were inclusive of material. The Net profit @ 6% was directed to be applied and the assessee was granted partial relief by the ld. CIT(A) against which the Revenue is in appeal before us. 4. During the course of hearing, the ld. D/R relied on the findings of the AO and submitted that in view of the various decisions of the Coordinate Chandigarh Benches and Hon'ble Punjab & Haryana High Court, the net profit rate should be computed @ 10% to 12% as against 6% applied by the ld. CIT(A). 5. Per Contra, the ld. A/R relied on the findings of the ld. CIT(A) and ....
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....usiness whereas the ld. CIT(A) has considered the past history of the assessee. During the course of hearing, nothing has been brought on record disputing the past history of the assessee which is on record and has been considered by the ld. CIT(A). We therefore do not find any affirmity in the order of the ld. CIT(A) and the same is hereby confirmed. In the result, the ground of appeal taken by the Revenue is dismissed. 7. Regarding Ground No. 2, the brief facts of the case are that during the course of assessment proceedings, the AO observed that there is an increase in trade payables from Rs. 57,74,488/- in assessment year 2015-16 to Rs. 7,08,10,324/- in Assessment Year 2016-17 and in spite of repeated opportunities, the assessee did no....
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....(A) contained in para 5.3 of his order and it was submitted that it is a settled legal position that where a net profit is estimated, no further addition can be made in respect of trade payables which are directly linked with the purchases of the assessee company, and our reference was drawn to the findings of the ld. CIT(A) which are contained in para 5.3 of his order which read as under:- "5.3. I have gone through the facts of the case and the written submissions. It is observed that the AO on perusal of Balance Sheet noted that there was huge increase in 'Trade Payables' from Rs. 57,74,488/- in the A.Y. 2015-16 to Rs. 7,08,10,324/- in the A.Y. 2016-17. As the appellant failed to justify the genuineness of its claim the AO compl....
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....e is also placed on the decision of Hon'ble Punjab & Haryana High Court in the case of CIT vs. Aggarwal Engg. Co., (2006) 156 Taxman 40 wherein it was held that once net profit rate was applied, no further addition was called for in respect of purchases and introduction of cash in the facts and circumstances of the case. Further, in the case of CIT vs. Dulla Ram Labour contractor [2014] 42 Taxmann.com 349, the Hon'ble Punjab & Haryana High Court held that: "Section 68 of the Income Tax Act, 1961 - cash credits (Rejection of books of account, effect of) - Whether where books of account are rejected in their entirety, Assessing Officer cannot rely upon any entry in those books of account for making an addition to assessee's taxa....