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TMI Blog2016 (6) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... ations nor these parties were produced for examination -AR submitted that these were the trading liabilities and were not old in nature - Held that:- Most of the liabilities were of current year or immediately preceding year and the accounts were active in nature and the transactions were being carried out for the current year as well as in the subsequent year. Considering these facts and circumstances of the case, we are of the view that the ld. CIT(A) has rightly deleted the addition and find no infirmity in his order which is sustained - Decided against revenue - ITA No. 694/JP/2012 - - - Dated:- 15-6-2016 - Shri Bhagchand, AM And Shri Laliet Kumar, JM For the Revenue : Shri O.P. Bhateja, Addl. CIT -DR For the Assessee : Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the information. The books of account were produced by the ld. AR of the assessee and examined on test check basis by the AO. The AO observed that the assessee is engaged in the civil construction work i.e. mainly of Rajasthan Housing Board and RIICO. The AO during the course of assessment proceedings went through the books of account of the assessee and made following observations. (i) no stock details have been maintained. (ii) Diesel and Oil expenses of ₹ 22,85,671/- were not fully supported by bills and vouchers. Particularly for the purchases from D.D. Sharma Petroleum, not even a single bill was produced. (iii) Conveyance expenses of ₹ 23,55,000/- were not fully supported by bills and vouchers (iv) On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reply of the assessee was general in nature and not connected with documentary evidences. The AO thus made following disallowance under different heard of expenses. Head of expenses Amount claimed % disallowed Amount disallowed Remarks Diesel and Oil 2285671 20 457134 - Conveyance 2355000 20 471000 - Salary 300000 20 60000 - Royalty 997692 46453 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is to be applied to compute the trading income of the appellant of the current year. AO observed from the relevant past history, it is found that the appellant had admitted of having effective NP at 5.05%, in the immediate previous year, thus the AO s estimation of NP @ 10.2%, resultant of the adhoc addition ₹ 34,33,013/-, is found rather on higher side and against the guidelines provided by the Courts, in this regard. Thus in the light of the above fact and circumstances, I am of the considered view that applying the effective net profit rate of the previous year, i.e. 5.05% in the current year, would be fair, proper and sufficient to meet the both ends of the justice, as such. Accordingly, the AO is directed to restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee firm to provide confirmation of accounts of all the sundry creditors above ₹ 1,00,000/-. The assessee filed the confirmations in respect of only three parties viz Rakesh Earthmovers (P) Ltd. , Vijay Enterprises and Rajasthan Enterprises. According to the AO, there were 08 such parties and accordingly summons were issued by the AO. The AO observed that except for one, i.e. Jaipur Steel Tech India (P) Ltd., no one appeared before him. The assessee was confronted with this and assessee was given a show cause notice dated 24-1-2011 asking to produce the sundry creditors of above ₹ 1.00 lac so that amounts shown are not added back to the assessee's income u/s 41(1) of the Act. The AO observed that neither the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature and mostly related to the current year itself or immediate preceding year only. Moreover, the relevant accounts are also found active in nature, showing several transactions entered into in the current year and subsequent year also. In other words, in my considered word, the AO has invoked the provision of Section 41(1), merely on the suspicion and conjecture, without bringing any supporting material in this regard. Accordingly, it is held that addition of ₹ 58,87,032, made in this regard, is found untenable and unjustified, under the given circumstances, thus deleted. Consequently, this ground of appeal is upheld. 3.3 Now the Revenue is before us and during the course of hearing the ld. DR relied on the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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