9911796707
TMI Blog2015 (11) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) has rightly rejected the books of account by applying the provisions of section 145(3) of the Act and we find no infirmity in the order of CIT(A) in applying profit rate of 8%. Disallowance of expenses by invoking the provisions of section 40(a)(ia) - Held that:- In reply to other additions, it is clear that once net profit rate is applied, the expenses or other disallowances, since relating to business, cannot be made separately because the profit element of expenses or disallowances have already been considered while applying profit rate. Accordingly, we confirm the order of CIT(A). Appeal of revenue is dismissed. - I.T.A No. 859/Kol/2012 - - - Dated:- 20-11-2015 - Shri Mahavir Singh, JM Shri M. Balaganesh, AM For the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loper engaged in construction and development of residential flats. The AO during the course of assessment proceedings on perusal of books of account and other documents and details filed by assessee pointed out many mistakes/irregularities in the books of account and finally assessed the following items to the returned income of the assessee: Undisclosed sale as discussed in para 7(a) of assessment order - Rs.12,45,000/- Bogus Purchase as discussed in para 7(b) of assessment order - ₹ 78,419/- Disallowed expenditure as per provision of sec. 40(a)(ia) - ₹ 7,75,980/- Undisclosed sale as discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the assessment order, the sale receipts shown by the appellant are understated by ₹ 12,45,000/- in respect of the flats sold to Sri Prasant K Saha Smt. Juthika Mitra and Smt. Ruparshee Bhattacharjee, by ₹ 40,000/- in respect of flat sold to Sri Sanjay Bhagat and by ₹ 2,25.440/- in respect of flat sold to Sri Arpan Chowdhury. Therefore the sales shown by the appellant in its trading account is required to be increased by the aforesaid amounts. However, if these amounts are simply added to the income, as done by the assessing officer, it results in unrealistically high net profit rate. As discussed earlier, the appellant's system of accounting is unreliable not only in respect of booking receipts, but also expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the ratio of the aforesaid decisions, separate disallowance u/s. 40(a)(ia) is also not to be made when net profit is estimated. 4. It is to be noted that the CIT(A) directed the AO to delete the rest of the additions as net profit rate as applied. Aggrieved, now revenue is in appeal before Tribunal. 5. We have heard Ld. Sr. DR and gone through facts and circumstances of the case. We find that there are errors/inconsistencies in the maintenance of books of account because in several cases for the relevant AY booking of sales does not tally with the year of registration. Even the method of recognition of sale adopted by the assessee is inconsistent, defective and not in accordance with any recognized system of accounting. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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