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TMI Blog2010 (6) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of facts and circumstances of the case, the learned CIT(A) has erred in not completely reversing the addition of Rs. 24,88,613 made by the AO. The learned CIT(A) has applied net profit rate of 6 per cent in place of 8 per cent as applied by the learned AO making the addition of Rs. 18,66,460 as against addition of Rs. 24,88,613 by the learned AO without any basis and without even giving the benefit of depreciation. (b) In any view of the matter and in any case the action of the learned CIT(A) in not completely deleting the addition made by the AO is bad in law, unjustified, arbitrary and against the facts and circumstances of the case. 2. Regarding addition of Rs. 12,22,000 on account of fixed deposits. (c) That on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 613 by the learned AO without any basis and without even giving the benefit of depreciation. The brief facts of the case are that the assessee is a carriage contractor, who had declared net income of Rs. 3,82,999 out of total receipts of Rs. 3,11,07,660. The case was processed vide non-scrutiny TMS and a refund of Rs. 5,40,600 was issued to the assessee. Subsequently, the case was selected for compulsory scrutiny under para 2 "o" of the Procedure of Selection of Cases for Scrutiny issued by the CBDT in its action plan for the financial year 2006-07. A notice under section 142(1) of the Act, along with questionnaire was issued to the assessee on 10th and 11th July, 2007 requiring the assessee to furnish certain informations/details and to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered by the CIT(A) while deciding the issue in dispute. He further relied on the decision of the Hon'ble Madhya Pradesh High Court in the case of the Hon'ble Madhya Pradesh High Court in the case of Ramdas Jugani v. CIT [2006] 282 ITR 356 wherein it has been held that profit rates applied by the AO and upheld by the appellate authority without justification is arbitrary and unsustainable. 7. The learned 'Departmental Representative', on the other hand, relied on the order of the CIT(A). 8. We have heard both the parties and carefully considered the rival submissions, examined the facts, evidence and material placed on record. From the facts discussed above, it is obvious that the assessee failed to furnish the requisite information, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate is justified. However, only question would be whether the quantum of rate as applied by the AO is justified or not. The AO has himself admitted that assessee is a carriage contractor and has shown gross receipts at Rs. 3,77,07,660. The net profit declared by the assessee was Rs. 3,82,999 which yields net profit rate of 1.23 per cent, which is far lesser as declared by other assessees who have been quoted by the appellant in his submissions. Secondly, the gross receipts in other cases as quoted by the assessee are much higher than the gross receipts declared by the assessee. For instance, the turnover of Vally Carriage is to the tune of Rs. 17,87,66,920 with a net profit rate of 2.71 per cent. Similarly, in the case of M/s NITCO Roadway, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate which can be applied for estimating net profits. 8.2 In view of the above detailed legal and factual discussions, we are of the considered opinion that it would be fair and reasonable if the net profit rate of 4 per cent is applied to the gross receipts instead of 6 per cent applied by the learned CIT(A), on estimate basis. The AO is accordingly directed to modify his order, in the interest of justice, by applying net profit rate of 4 per cent on the gross receipts. Hence, this ground of appeal is partly allowed. 9. In the next ground of appeal, the learned counsel for the assessee contended that the learned CIT(A) erred in not completely deleting the addition of Rs. 12,22,000 made by the AO on account of fixed deposits. He furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal contract receipts after rejecting assessee's books of account by invoking the provisions of section 145(3), no separate additions can be made on account of cash credit under section 68 even though the assessee has failed to discharge its onus of proof in explaining the amount shown in the books of account as 'market outstanding'. In view of the above, he pleaded that the addition in question may kindly be deleted. 10. The learned Departmental Representative, on the other hand, relied on the orders of the authorities below. 11. We have given our thoughtful consideration to the rival submissions, facts of the case and material placed on record. We have also gone through the assessment order, impugned appellate order, submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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