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TMI Blog2019 (9) TMI 1489X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and keeping in view the entirety of the facts and circumstances of the case, the addition so made by AO and restricted by ld. CIT(A) are deleted. Thus the solitary ground of the assessee is allowed. - ITA No. 961/JP/2019 - - - Dated:- 26-9-2019 - SHRI SANDEEP GOSAIN, JM AND SHRI VIKRAM SINGH YADAV, AM For the Assessee : Shri S.L. Poddar, Advocate For the Revenue : Shri Bhanwar Singh, (JCIT) ORDER PER: SANDEEP GOSAIN, J.M. The present appeal has been filed by the assessee against the order of CIT(A)-2, Jaipur dated 20.05.2019 for the assessment year 2015-16 wherein the assessee has raised following ground. That the ld. CIT(A) sustained the addition of ₹ 6,00,000/- for lumpsum disallowance made by ACIT, Circle 5, Jaipur of ₹ 10,00,000/- without consideration of book results, i.e. G.P. N.P. of the assessee which are more than previous year. 2.1 Brief facts of the case are that the assessee is a partnership firm and having income from civil construction works . The return of income declaring income at ₹ 1,30,047,410/- was filed by the assessee on 30-09-2015 for the year under consideration. Subsequently, the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they show payment made but actually received that on the last day of the month or in the month of April in next financial year. Ongoing through B/S of the assessee firm the bank balance as on 31/03/2015 of ₹ 2,28,67,792/- Other than this the Govt department also deduct earnest money and deposits from payment. Other than this they also demanded bank guarantee for release the payment as well as for acceptance the contract tender. It is also clear from the B/S of the assessee the deposits shown of ₹ 10,61,61,247/- and earnest money of 70,37,628/- i.e. total investment made in these of ₹ 11,31,98,875/- Due to this creditors of the assessee is outstanding. The labour and supplier of the assessee was known and they were ready to take the payment when received by assessee from Govt Department. 3. We further submit that the payment of ₹ 9,66,38,514/- outstanding as on 31/03/2015 paid by the assessee in the next assessment year. As the assessee firm completed contract work in remote areas and involve huge persons for labour work due to this firm paid labour charges in cash. However, firm made proper records for this on site. 4. Now we narrate trading result of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that disallowances on ad hoc or lump sum basis not allowed as done in the assessee firm: case. We pray to your honour good selves kindly allowed the appeal and delete the addition made by A.0. It was submitted by the ld.AR of the assessee during the course of hearing that although ld. CIT(A) had admitted that the assessee had filed GP Chart and NP Chart which shows that profit rate is better in comparison to last year yet he had restricted the disallowance to the extent of ₹ 6.00 lacs which is not sustainable in law. The ld.AR of the assessee relied on the decision of ITAT Jaipur Bench in the case of Goodwill Impex Limited vs DCIT (ITA No.544/JP/2018 dated 18-03- 2019). 2.5 On the other hand, the ld. DR relied on the orders of the revenue authorities. 2.6 We have heard the rival contentions and perused the materials available on record. We noticed that as per facts of the present case the assessee had shown sundry creditors to the tune of ₹ 10,22,847/- and on verification by the AO it was found that since the assessee could not produce the parties before him, therefore, in order to protect probable leakage of Revenue, the AO made disallowance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts have been rejected due to non-maintenance of stock register, qualitative records, etc and provisions of section 145(3) have been invoked, the authorities cannot resort to make addition on an adhoc basis to prevent leakage of revenue as so stated by the AO. Only course left with the authorities is to estimate the gross profit rate based on best judgement and the past results of the assessee provides a reasonable basis for such estimation. For the year under consideration, the assessee has declared G.P rate of 16.38% as against 14.14 % in AY 2012-13, 12.05% in AY 2011-12 and 11.97% in AY 2010-11 and has thus declared a better G.P rate for the year under consideration as compared to average G.P rate for the past three years. Even where the books of accounts are rejected, there is thus no basis for making the addition in the hands of the assessee company. It is a settled legal proposition that mere rejection of books of accounts are not sufficient to hold that the trading additions have to be necessarily made in the hands of the assessee company. Where the assessee company has declared a better trading results as compared to previous years, such results provide a reasonable basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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