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TMI Blog2012 (8) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 145. 2. That the CIT(A) erred in confirming the addition of Rs.16,42,541/- on account of bogus purchases. 3. That the CIT(A) erred in confirming estimation of closing stock of Rs.1,44,200/-. 4. That the CIT(A) erred in confirming addition of unexplained purchases of Rs.5,76,788/-. 5. That the CIT(A) erred in confirming the undisclosed contract receipt of Rs.4,02,019/-. 5A. The AO enhanced GP to 26.45%. The CIT(A) erred in confirming GP at more than 8%. 6. That the CIT(A) erred in confirming disallowance of testing fees of Rs.1,43,535/-. 7. That the CIT(A) erred in confirming addition of Rs.4,500/- being accrued interest. 8. That the CIT(A) erred in not considering the additional evidence put up in remand report." 2. The brief fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this count has been made to the total income of the assessee in view various disallowances and additions made in assessment order as under:- a) disallowance out of purchase of Rs.16,42,541/- b) on account of estimation of closing stock at Rs.1,44,200/- c) on account of unexplained expenditure of purchase at Rs.5,76,788/- d) on account of undisclosed contract receipt at Rs.4,02,019/- e) disallowance of interest of Rs.95,191/- f) disallowance of testing fees at Rs.1,43,535/- g) disallowance of interest accrued at Rs.4,500/- Thus, total disallowances of Rs.30,08,774/- was made by Assessing Officer. Against the assessment order, assessee preferred an appeal before Ld. CIT(A). The Ld. CIT(A) after considering the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the materials available on record. We find that Assessing Officer in this case has rejected the books of account of the assessee and estimated GP @ 19.06% of the total turnover. The GP for the year under consideration was estimated at Rs.31,94,574/-. It is observed by AO that as the books of account of the assessee are found incomplete as well as incorrect, therefore the provisions of Section 145 of the Act was invoked and it was proposed to make addition of Rs.16,25,425/-. However, the AO did not proceed to make addition by enhancing GP but proceeded to disallow the expenses and made addition in respect of bogus purchases, estimation of closing stock, unexplained expenditure, undisclosed contract receipt, disallowance of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same order. Since, books of account, bills and vouchers etc., could not be produced because it is claimed that these are destroyed in flood, no disallowance can be made on the basis of non-existent books. The disallowance of purchases is on the basis of high ratio of purchase to contact receipts. The same stands taken care in GP addition. The additions on account of closing stock and u/s. 69C of the Act are on this basis that there is no purchase in some months and ratio of purchase to gross receipt is high. The second aspect is taken care in GP addition. The absence of purchases in a few months can be for this reason that bills are accounted for in a later month. This cannot be examined in the absence of books & bills etc., which are said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f testing fee to the government laboratories and such expenses were subsequently, reimbursed. We find that Ld. CIT(A) misinterpreted the contention of the assessee. The contention of the assessee before the Assessing Officer is reproduced as under:- "(v) Regarding non deduction of TDS on Testing Fee of Rs.143,535/- I have to submit that I was a sub-contractor and it was a Reimbursement of expenses of Testing Fee to main contractor M/s. Kunal Const. Co. who have paid this fee to Government Laboratory for testing of material on behalf of me because work was carried out by me. Besides M/s. Kunal Const. Co. is not an authority to Test Materials. In short I have made Testing fee to Government Laboratories via main Contractor. Under this circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer was as under:- "(iv) Regarding difference in Receipt of Rs.268,931/- in Ex. Eng.(R & B) Div. & Rs.133988/- Ex.Eng. National Highway I have to submit that this difference is on account of the fact that Cheque dt. 31-03-05 we received by me in next ast. Year 06-07 amount of which were pertains to above difference Receipt and the same were required to be shown in the year under consideration but here I made a bona fide mistake and this Receipts are shown in the Asst. Year 2006-07 details of which are as under 'Ex.Eng.(R &B) Div. - Actual Receipt of Rs.2,176,562 for A.Y. 06-07 as per TDS Certificate - As against Receipts of Rs.2361162/- shown- Excess by 184600/-. Ex.Eng. National Highway. Actual Receipt of Rs.2,156,272/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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