TaxTMI 
TaxTMI 
2023 (3) TMI 280
X X X X Extracts X X X X
X X X X Extracts X X X X
....t] for A.Ys. 2015-16&2017-18.The impugned orders were emanated from the order of the ld. Asstt. Commissioner of Income tax, Circle-3, Srinagar,(in brevity the AO) order passed u/s 144 of the Act for A.Y. 2015-16 and section 143(3) for A.Y. 2017-18. 2. At the outset, we advert that both the appeals, have the same factual ground. With the consent of both the parties we take ITA No. 295/Asr/2019 A.Y. 2015-16 as lead case. ITA No. 295/Asr/2019 3. In ITA No. 295/Asr/2019 the assessee has raised the following grounds : "That the Learned Assessing Officer has without reason proceeded to complete assessment U/s 144 of the Act by invoking arbitrary profit rate of 6% of gross receipts contrary to rate of 2.07% returned by the appellant on the b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Assessing Officer without any credible justification and reasoning. ii. in confirming application of adhoc net profit at rate of 4% of gross turnover exclusive of interest income as against total net profit at rate of 4.81% voluntarily declared by appellant inclusive of interest income. iii. in upholding interest income of Rs.53,60,719/- separately assessable as income from other sources without considering and completely ignoring interest paid at Rs.77,40,472/= on the loans to financial institutions which is far in excess of interest income received during the year. iv. in placing undue reliance on the arbitrary assessment order passed in hot haste u/s144 of the Act by Ld Assessing officer contrary to nature of business, past his....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the order of the ld. CIT(A). 6. The ld. Counsel for the assessee has filed written submissions which are kept in the record. The main plea of the counsel was that the net profit rate was 4% in related to both the assessment years. The ld. CIT(A) first determine the net profit @ 4% for assessment year 2015-16. Same theory was applied in the assessment year 2017-18. The assessee further placed that the notice was served in the wrong address, so, the entire assessment was infructuous. 7. The ld. Sr. DR vehemently argued and first relied on the order of the ld. CIT(A) para 5 and 6 of the order for A.Y. 2015-16 which are reproduced as below : "5. The aforesaid submissions and averments of the appellant have been carefully considered. It is a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s by applying the GP rate of 4% on the gross receipts." 7.1 The ld. Sr. DR further argued and invited our attention in assessment order page no. 2 that the show cause notice was duly issued by the ld. AO in correct address of the assessee which has mentioned in the return of income. Finally, the order was served in the registered address of the assessee. So, there is no miscommunication from the end of the revenue. The ld. Sr. DR further argued that the yearwise net profit of the assessee which is annexed in APB page 10 for A.Y. 2015-16 is reproduced as below: Asstt. Year (in Lacs) Gross Receipts Profit(%) 2012-13 4626.35 2.42% 2013-14 3838.92 2.68% 2014-15 4401.40 3.11% 7.2 The ld. Sr. DR in argument specifically ment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e. Thus, bank deposits have served dual purpose i.e. interest income generated on which TDS has been deducted and fulfilment of terms of allotment of contracts also served by way of submission of bank guarantees. The interest earned of Rs. 53,60,917/=has been reflected separately on credit side of profit and loss account for proper presentation and disclosure requirement only since the appellant had option to set off the same against interest expenditure on loans amounting to Rs. 77,40,472/= disclosed on debit side of profit and loss account, which he has not done for fair disclosure purposes." 8. We heard the rival submission and relied on the documents available on the record. The assessee's case was assessed u/s 144 and the net profit ....