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TMI Blog2015 (10) TMI 2789X X X X Extracts X X X X X X X X Extracts X X X X ..... st assessment history of the assessee which has been duly considered by the ld. CIT(A) and following the decision of Gupta K.N. Construction Company [ 2015 (5) TMI 315 - RAJASTHAN HIGH COURT] we find no infirmity in the order of the ld. CIT(A) where net profit rate of 6% before depreciation, interest and remuneration to partners had been adopted. - Decided against revenue. - ITA No. 115/JP/2013 - - - Dated:- 9-10-2015 - Shri R.P. Tolani, JM And Shri Vikram Singh Yadav, AM Revenue by: Shri Raj Mehra, JCIT Assessee by : Shri S.L. Jain, Advocate ORDER Vikram Singh Yadav, AM This is an appeal filed by the Revenue against the order of the ld. CIT(A)-1, Jaipur dated 27-11-2012 for the assessment year 2008-09 wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee firm are not correct and complete. For want of complete details of records/ books of account, the AO had no option except reject the books of account of the assessee and to invoke the provisions of Section 145(3) of the Act. The AO observed that for want of complete details, it would not be possible to deduce the correct profits from the contract work done by the assessee firm. The AO observed that the on gross receipts of ₹ 8,58,31,903/-, the assessee had disclosed net profit before remuneration and interest at 5.48% which was low in this kind of business. The AO estimated the net profit rate at 8% of gross receipts of ₹ 8,58,31,903/-,subject to allowability of depreciation, interest to partners and remuneration to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that n.p. may have to be comprised by a businessman to increase its receipts. Therefore, the net profit rate before depreciation, interest and remuneration is confirmed at 6% resulting in a n.p. addition of ₹ 2,40,022/- against 5.72% shown by the appellant. 2.3 Now the Revenue is before us wherein the ld. DR relied on the order of the AO. 2.4 On the other hand, the ld. AR of the assessee relied on the order of the ld. CIT(A) and also filed the written submission alongwith the decision of Hon'ble Rajasthan High Court in the case of CIT vs. Gupta K.N. Construction Company (vide D.B. Income Tax Appeal No. 59/2014 dated 18th Aug. 2014) to this effect. 2.5 We have heard the rival contentions and perused the material availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome tax return for the above assessment year under appeal alongwith audit report and other information. The respondent-assessee declared total contract work at ₹ 12,32,57,523/- declaring net profit rate of 5.38% subject to interest and remuneration to the partners. On perusal of the order, it is noticed that net profit rate in immediate preceding assessment year i.e. assessment year 2008-09 was 5.02% 3. During the course of assessment proceedings, the respondent assessee was directed to provide material to justify the expenses claimed in the profit and loss account vis-a-vis receipts and number of queries were raised. 4. However, the Assessing Officer was dissatisfied with the explanation offered by the assessee and not only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. officer of the Revenue can be said to be proper and justified that in a case where the assessee manipulates the accounts by keeping the profit margins commensurate with past assessment years or slightly increases and that itself by and large cannot be a basis for acceptance of the results. But in the fact of the said facts, it is for the Assessing Officer to bring on record some concrete material / evidence to make a proper addition. We have already noticed hereinabove that the Assessing Officer has merely disallowed 20% or 10% as the case may be out of the various expenses, which in our view is not proper and he had to bring on record justifiable basis for making of an addition and bring on record some evidence for making of additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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