9911796707
TMI Blog2012 (10) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... , the CIT (Appeals) has erred in applying Gross Profit of 12% (A.Ys. 2000-01, 2001-02, 2002-03, 2004-05 and 2005-06) when the assessee himself has shown Gross Profit of 24.14% (A.Y. 2003-04) and Gross Profit of 25% as against 30% applied by the AO for the A.Y. 2003-04." 2. During hearing of these appeals, we have heard Shri R.A. Verma, learned Senior DR and Shri H.P. Verma along with Shri Girish Agrawal, ld. Counsel for the assessee. The crux of arguments on behalf of the Revenue is that there is a contradictory finding in the impugned order for which our attention was invited to para 5.10 (page 19) by pointing out that for the assessment year 2003-04 the assessee itself showed GP @ 24.14% against which the learned CIT(A) adopted the gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer had issued specific questionnaire to the appellant alongwith the notice u/s 142(1) to furnish evidence/detail regarding the original booking of bungalows in all projects and complete addresses of the transacting parties alongwith their confirmation from whom purchase or sales exceeding Rs. 1,00,000/- was made. However, no such complete detail was furnished though it was stated that verification can be made from the books of accounts. It may be stated that the appellant was engaged in the business of purchase and sale of plot as also a builder and information regarding the purchase and sale of the plots viz-a-viz the genuineness of the purchase and sale consideration was definitely vital information of the income of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade arbitrarily. This opinion finds support from the following case laws:- (i) 288 ITR 10SC [Kachwala Gems-vs-.JCIT "It is well-settled that in a best judgment assessment there is always a certain degree of guess work. No doubt the authorities concerned should trv to make an '- honest and fair ~. estimate of the income even in a best judgment assessment and should not act totally arbitrarily, hut there is necessarily some amount of guess work involved in a best judgment assessment and it is the assessee himself who is to blame as he did not submit proper accounts. (ii) 8 STC 770SC [Raghubar mandai Harihar mandal] vs.State of Bihar "When the returns and the hooks oj' accounts are rejected. the Assessing Officer must make estimate and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellant is not a contractor or simply engaged in the business of civil construction and in fact the appellant is engaged in the business of sale & purchase of plots and construction of houses/ shops and sale thereof. In this background in such business it is not necessary to apply NP rate and in such business where the books of accounts are rejected and found to be incorrect, GP rate can also be applied. In my opinion, what is more important is what GP rate should be adopted for the period under consideration. It is noticed that sales of the appellant were on the decreasing trend. In A.Y. 2000-01 the total sales were for RsA4.80 Lacs whereas in A.Y. 2005-06 the sales were for Rs.l.40,000/- only. It is also noticed that the highest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 566010 12% 226404 339606 04 2003-04 434480 24.14% 30 '% 130344 25% 108620 21724 05 2004-05 800000 4.61 % 30 '% 240000 12% 96000 144000 06 2005-06 140000 6.84% 30 '% 32412 12% 16800 15612 Accordingly, ground nos. 3 % 4 are partly allowed." 4. The facts, in brief, are that a search and seizure operation u/s 132(1) was carried out on 16.9.2005 in "Sharma group" and at their premises, certain documents relating to the assessee were found. The assessee is engaged in the business of purchase and sale of plots, construction, developer and also running a hotel. During the assessment proceedings, it was noticed by the learned Assessing Officer that the assessee has shown low gross profit. The assessee was asked to furnish details/information re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue authorities and also with us remains adoption of gross profit rate. So far as the assessment year 2003-04 is concerned, the assessee has shown the gross profit rate 24.14%, therefore, it cannot be disturbed, consequently, the gross profit rate is retained at 24.14% in place of 25% adopted by the learned CIT(A). For the remaining assessment years, the gross profit rate has been shown by the assessee at 4.61% to 10% against which the learned CIT(A) applied the rate of 12%. Keeping in view the totality of facts, assertion made by the learned respective counsel and the business activities of the assessee, we deem it appropriate to apply the gross profit rate at 10% in place of 12% (adopted by the learned CIT(A)) for the remaining as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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