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TMI Blog2012 (8) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the NP rate having been applied no other addition on account of wages or contract receipts as mentioned hereinabove can be a subject matter of addition. AO is directed to exclude the said amounts - Decided in favor of assessee - I.T.A. No.161(Asr)/2011 C.O. No.08(Asr)/2011 - - - Dated:- 8-6-2012 - SH. H.S. SIDHU, AND SH. B.P. JAIN, JJ. Department by: Sh. Tarsem Lal, DR Assessee by: Sh. Sudershan Kapoor, Advocate ORDER PER BENCH ; This appeal of the Revenue arises from the order of the CIT(A), Amritsar, dated 16.12.2010 for the assessment year 2007-08. The assessee has also filed C.O. 2. In the appeal, the Revenue has raised following grounds: i) On the facts and in the circumstances of the case, the ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 were at Rs.5,59,485/- and the same were not reflected as payable in the balance sheet filed with the return of income. In the said show cause, a sum of Rs.21,25,400/- was declared as payable on account of muster roll ( wages payable). Since there is no evidence with regard to the said claim of Rs.21,25,400/- declared as payable as at 31.03.2007 and the assessee was allowed the wages payable for one month which comes to Rs.3,00,000/-. Therefore, the AO proposed to make the addition of Rs.18,25,000/- on account of unexplained liability declared in the balance sheet. Since no one attended on the adjourned date and the AO made ex-parte assessment. Vide para 6, the AO observed that keeping in view the facts and circumstances of the case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other courts of law on the said issue. The Ld. CIT(A) also observed that under section 44AD of the Act, where the books of account were not maintained, the income had to be estimated only at 8%. Keeping in view the decision of various courts of law, the action of the AO was not sustainable in the eyes of law. Therefore, any addition over and above 8% was directed to be deleted. 5. Before us, the Revenue has filed two grounds of appeal i.e. against deletion of addition of Rs.5,14,727/- and Rs.18,25,400/-. 6. The Ld. DR appearing for the Revenue argued that the decision in the case of CIT vs. Aggarwal Engg. Co. (Jal) reported in 302 ITR 246 (P H), is not applicable in the present facts and circumstances of the case and each case has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e para 6 had estimated the net profit rate of 8% on the gross receipts of Rs.1,07,19,909/-. The said net profit has been worked out at Rs.8,57,592/-. But at the same time, the AO has not taken into account the said application of Net Profit rate of 8% in the computation in para 11 of his order at page 9. He has started the computation as the income of Rs.5,60,040/- declared by the assessee in its return of income and has proceeded to make addition of Rs.44,758/-, Rs.5,14,727/- and Rs.18,25,400/- made in paras 7, 7.1 and 8 respectively. From the said order of the AO, it appears that the AO had ignored the application of Net profit rate of 8% vide para 6 for taking in para 11, the computational part. Though it is a mistake on the part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gards C.O. No.08(Asr)/2011 of the assessee, the ld. counsel had argued that the Ld. CIT(A) has not reduced the amount of Rs.5,59,485/- from the income of this year, since the assessee had declared the same in the succeeding year and the tax has already been paid. 10. In this regard, as observed hereinabove, the AO once having been applied NP rate on the receipts declared by the assessee, no other addition can be made. Therefore, in the facts and circumstances of the case, the Ld. CIT(A) is not justified in including the amount of Rs.5,59,485/- in the said contract receipts. The AO is directed to exclude the said amount of Rs.5,59,485/-. Thus, the C.O. of the assessee is allowed. 11. In the result, the appeal of the Revenue in ITA No.161 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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