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TMI Blog2018 (7) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the provisions of the act. Therefore, Ld. CIT(A), in our opinion, erred in shifting the onus upon Ld. AO to provide relief to the assessee since even the primary onus of substantiating the transactions remained un-discharged by the assessee. No quantitative details could be filed by the assessee with respect to trading done by him and further no details with respect to construction activities as called for by Ld. AO were furnished by the assessee. In such a situation, Ld. AO was left with no option but to reject the books and estimate the income of the assessee on some reasonable basis. The same is evident from the fact that Ld. first appellate authority has also confirmed the stand of Ld. AO in estimating the income from construction activities. So far as the Tribunal’s order for AY 2007-08 is concerned, we find that the same could not help the assessee in any manner since the matter is factual one and secondly, in that year, Ld. AO, by mistake, estimated the additions by invoking the provisions of Section 44AD/44AF, which is not the case here. Further, the status of assessment / appellate proceedings for intervening AYs i.e. 2008-09 to 2010-11 has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Ld. Deputy Commissioner of Income Tax-Circle 6(1), Mumbai [AO] u/s 143(3) of the Income Tax Act, 1961 on 19/03/2014 wherein the income of the assessee has been assessed at ₹ 525.37 Lacs after certain additions as against returned income of ₹ 300.69 Lacs e-filed by the assessee on 30/09/2011 which was later revised to same figures on 29/09/2012. The subject matter of cross appeals before us is estimation of income against trading activities as well as construction activities carried out by the assessee in the impugned AY. 3.1 Briefly stated the assessee being resident corporate assessee engaged in construction work and trading of iron steel reflected combined net profit of ₹ 3.30 crores against construction turnover of ₹ 57.47 Crores trading turnover of ₹ 90.07 Crores. As evident from para 3.2 of the quantum assessment order, the Gross Profit rate of trading activity construction activity has been reflected as 0.68% 8.28% respectively. The same para record a finding that the assessee failed to submit the requisite details as called for vide letter dated 19/12/2013 with respect to construction activities viz. detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is trading of iron steel, MS Plate, MS Angle, G.P. Sheet etc and second activity is of construction of EWS Flats under the SRA Scheme of State Government. With respect to the trading activity of the appellant, the appellant has furnished all the relevant details which were verified by the AO, only on the basis of confirmation filed by the appellant and confirmation received from some parties in response to the notice issued u/s 133(6), came to the conclusion that the appellant was engaged in circular trading as at appearing from the confirmation letters that the appellant had purchased and sold the goods in some cases. The AO has not brought out on records evidence to establish that the appellant is engaged in circular trading. The ledger copy only indicates the purchase and sale amount, it does not reflect the item sold, rates etc., hence on the basis of ledger confirmation, it cannot be said that the appellant is engaged in circular trading. At the most, it can be a good starting point of investigation. The addition cannot be based on suspicion. In the trading activity, the AO has not found a single mistake in the books of account. The AO has not recorded his satisfaction about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consumption of material. 3 Labour register was furnished but work wise utilization of labour has not been furnished 4 Notices issued u/s 133(6) have come back unserved and in two cases no reply was received. Under these circumstance, the AO rejected the books of account and estimated the net profit at the rate of 8% of construction activity. 6.4 The appellant during appellate proceedings stated that the appellant is public limited company listed at the Bombay Stock Exchange since last 25 years. Regular books of account are maintained and are duly audited under the provision of the Companies Act, 1956 and Income Tax Act, 1961, and annual result are published in newspaper and also circulated to shareholders as per statutory provision. The appellant further stated that it is not possible to maintain a stock register to record item-wise movement of material that is used in construction process. Items like cement, steel sand/ granules etc are procured as per requirement at the site and consumption is entirely debited to the work iii progress A/c. This system is generally followed in the construction industries. The appellant stated that except for the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny basis of estimation. Hence, to meet net profit from the construction activity. Hence. AO is directed to deleted the addition in excess of 7% of the construction receipt. Therefore, the ground of appeal no. 1 is partly allowed. Aggrieved, the assessee as well as revenue is in further appeal before us. 5. The Ld. Departmental representative, Shri Rajesh Kumar Yadav, contested the stand of Ld. CIT(A) in granting relief to the assessee whereas the Ld. Auhtorized Representative [AR] for assessee, Shri Anil Thakrar, placed reliance on the order of this Tribunal in assessee s own case for AY 2007-08, ITA No. 5760/Mum/2012 dated 20/07/2016, a copy of which has been placed on record. 6.1 We have carefully heard the rival contentions and perused relevant material on record. The undisputed fact remain that the assessee has failed to submit the quantitative details of the trading operations as well as details of construction activities carried out by him during the impugned AY. The Ld. AR is merely harping on the point that the assessee was a listed public company and therefore, the books could not be rejected by Ld. AO and the profits could not be estimated by lower auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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