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TMI Blog2015 (9) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... . - ITA No. 734/JP/2012 - - - Dated:- 5-6-2015 - R. P. Tolani, JM And T. R. Meena, AM,JJ. For the Appellant : Shri Rajesh Ojha, JCIT For the Respondent : Shri Mahendra Gargieya ORDER Per R P Tolani, JM. This is an appeal filed by the assessee against the order of the ld. CIT(A), Alwar dated 27-07-2012 for the assessment year 2008-09 raising following ground. The ld. AO has erred in making trading addition of ₹ 7,59,500/- on account of trading addition and ld. CIT(A) has erred in confirming the same. 2.1 During the course of hearing, the ld. Counsel for the assessee contends that rejection of books of account u/s 145(3) is not under challenge. 3.1 Brief facts of the case are that the assessee carries on business of transport booking agent and he did not own any truck but the transportation is arranged by hiring the trucks from open market for transportation of cement bags. During the course of assessment proceedings, the AO observed that :- During the year, the assessee has shown receipt of freight of ₹ 22,24,36,643/- and payment of freight of ₹ 2,17,98,232/- thereby declared gross profit of ₹ 6,38,411/-. After claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the company, assessee makes the payment to truck driver/ owners. Amount of transportation charges is mentioned on the Bilty. Therefore, Bilty itself is an evidence of transportation charges payable to truck operation/ driver. There is no necessity of any further receipt. The only dispute may arise on the amount of Bilty charges or commission of transporter. For verification of this, you can make an enquiry form the truck drivers/ operators who have provided their trucks to the assessee. Further it is most import to mention here that transportation charges paid or payable to truck drivers are subject to TDS, therefore, a prudent truck operator will never accept lesser amount than shown in the TDS certificate. Hence, possibility of manipulation of transportation charges paid is totally ruled out. Acknowledgement of Form No. 16 (TDS Certificate) itself is receipt of transportation charges paid to truck owners. Therefore, there is no necessity of any further receipt. I have considered the details furnished by the assessee. In this case, it is found that the assessee has claimed excessive payment on account of freight. The assessee has tried to justify that the entire freight re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t issued any receipt/ vouchers regarding receiving of commission. Since the books maintained by the assessee are not proper and defective in terms of the facts that no records regarding making part payment of freight is maintained and no receipt is issued for charging of fixed commission and claim of various expenses are either unvouched or partly vouched, provisions of Section 145(3) are clearly applicable in this case. Vide Order sheet entry dated 25-11-2010, this fact has been communicated to the assessee to offer to his explanation. No reply has been furnished. In view of the above detailed discussion, I consider it fair and reasonable to estimate the income of the assessee by applying net profit rate of 4% as held by the Hon'ble ITAT, Jaipur Bench, Jaipur in the case of similar nature and of nearby place of Shri Ramniwas Yadav Prop. Shree Krishna Freight, Bansur (ITA No. 26/JP/2010 dated 3-09-2010) on the declared freight receipt of ₹ 2,24,36,643/- which works out to ₹ 8,97,465/- as against ₹ 1,37,965/- declared by the assessee. Accordingly trading addition of ₹ 7,59,500/- is being made by applying the provisions of Section 145(3) of the I.T. Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit rate at 4% of gross freight receipt to estimate the income of the appellant since the facts of the case and the nature of trade is similar to that of the case of Shri Ram Niwas Yadav cited above. In view of above, the trading addition of ₹ 7,59,500/- is sustained. 3.3 Aggrieved, the assessee is before us. 3.4 The ld. Counsel for the assessee contends that rejection of books of account u/s 145(3) of the Act does not confer the power to make arbitrary assessment and if the past history of the assessee is favorably comparable then no trading addition can be made. Reliance is placed on the following case laws. (i) CIT vs. Gotan Lime Khaniz Udyog, 256 ITR 243 (Raj.) (ii) Ajay Goyal vs. ITO (2006), 99 TTJ 164 (JP) (iii) Ishwar Lal Saini (ITA No. 252/JP/2010) dated 5-08- 2011, Jaipur Bench), To judge the reasonableness of the trading results declared, it is always that gross profit rate which is normally taken into consideration and not the net profit rate inasmuch as there were various indirect expenses like interest, salary depreciation etc. which keeps on varying and do not have any nexus with the actual functioning/ operation of the enterprise. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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