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TMI Blog2018 (3) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... e current year cannot be made in comparison with those years. The net profit at the rate of 8% is also too high in case of the business of the civil construction for this year compared to the assessment history of other years of the assessee. No reasons have been given by the assessing officer for estimating the net profit at the rate of 8%. No comparative instances have also been cited. Further even in section 44AD for the small business where the turnover is less tha 60 lakhs rate of profit is 8 %. In the present case the assessee has turnover of more than 9 croes therefore such a high rates cannot be applied to the business of the assessee. No injustice would be caused if the net profit of the assessee were estimated at the rate of 5% of the gross receipt of the assessee. AO is directed to estimate the net profit of the assessee at the rate of 5% instead of 8%. - Decided partly in favour of assessee partly. - ITA No. 2804/Del/2016 - - - Dated:- 7-3-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Appellant : Shri Sunil Arrora CA Shri Akash Chug CA For The Revenue : Ms Ashima Neb SR DR ORDER PER PRASHANT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It further held that assessee has debited huge expenses in the trading profit and loss account amounting to ₹ 9.51 crores and shown net profit of ₹ 19.78 Lacs out of gross contract receipt of ₹ 9.71 crores for which no documentary evidences produced or furnished by the assessee. He further held that assessee has not produced any stock register as evidence of receipt of the quantity and quality of the raw material. It was further noted by him that the closing stock has also been accepted based on the self declaration of the proprietor, therefore opening and closing balance of stock is not verifiable. Therefore, the Ld. assessing officer rejected the books of accounts applying the provisions of section 145 of The Income Tax Act and rejected the book results of the assessee. He consequently estimated the net profit at the rate of 8% of the gross receipt of ₹ 9.71 crores and determined the net profit of ₹ 77.69 Lacs against the net profit of ₹ 19.78 Lacs disclosed by the assessee. Consequently it resulted into an addition of ₹ 5791715/ . The Ld. assessing officer passed an assessment order under section 143 (3) of the act on 29/3/2014 determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and estimating the higher profit at the rate of 8%. He vehemently relied on the decision of the Hon ble Delhi High Court in case of CIT versus Smt. Poonam Rani 192 taxman 167 (Delhi), CIT versus Jas Jack elegance exports 191 taxman 386 (Delhi) and the decision of the jaipur bench in case of DCIT versus British health products Ltd 82 taxman.com 388 (TM). 7. Ld. Departmental representative vehemently supported the orders of the lower authority and submitted that when the assessee has failed to produce the books of accounts despite repeated opportunities given by the Ld. assessing officer, there is no option available with the Ld. assessing officer except to reject the books of account and estimate the net profit of the assessee. It was further submitted by her that even before the Ld. CIT (A) the assessee has not produced any books of accounts. It was further stated by her that first notice under section 143 (2) of the income tax act was issued to the assessee on 15/9/2012 and various other notices were issued, including show cause notice however assessee has not produced the books of accounts. In view of this the Ld. assessing officer has correctly rejected the books of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Ld. assessing officer to produce the books of accounts on several occasions. Even before us, the assessee has not come out with the clean hands by producing the books of accounts. Therefore, it is clear from the records that assessee did not wish to produce the books of accounts. According to us, if the books of accounts are not produced, there is no option left with Ao other than to estimate the net profit of the business of the assessee. Therefore no fault can be found with the Ld. assessing officer in applying the provisions of section 145 (3) of The Income Tax Act. Decsions relied up on by the assessee are perused and it is found that in all those years the assessee produced the books of accounts and AO verified it. However in the facts in this case are startling that assessee has not produced the books of accounts at all. Hence, reliance on those decisions is rejected. In view of this ground No. 1 and 2 of the appeal of the assessee are dismissed. 9. Now coming to the issue of the estimation of the net profit of the business the Ld. assessing officer has taken it at the rate of 8%. The argument of the Ld. authorized representative is that in one of the years the net p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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