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TMI Blog2021 (3) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the considered view that the net profit rate of 1.5% sustained by the Ld. CIT(A) is on higher side in view of the past history. Hence, we find merit in the contention of the Ld. counsel that 1.5% profit rate estimated by the Ld. CIT(A) is on higher side. Accordingly, in the interest of justice, we partly allow the appeal of the assessee and modify the order passed by the Ld. CIT(A) and restrict the net profit rate to 1% of the gross receipts, which is more than the percentage in the last 3 years. We therefore, direct the Assessing Officer to compute the addition @ 1% of the gross receipts. Appeal filed by the assessee is partly allowed. - ITA Nos. 284/ CHD / 2020 - - - Dated:- 18-3-2021 - SHRI N.K. SAINI, VICE PRE SIDENT And SHRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tender documents, billty books etc. Since the assessee failed to produce complete record, the AO asked the assessee to show cause as why the receipts appearing in annual statement should not be treated as unaccounted receipts and ratio of 5% should not be applied to compute the income during the previous year. 3. The Assessing Officer after hearing the assessee, rejected the books of account u/s 145(3) of the Act and estimated the net profit @ 2% of the gross receipts holding that the assessee has failed to account for the receipts appearing in Form 26AS. Accordingly, the Assessing Officer made addition of ₹ 11,16,916/-. In the first appeal, the Ld. CIT(A) restricted the addition to 1.5% of the gross receipts and upheld the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as accrued to the assessee. 5. Notwithstanding, the above grounds of appeal, the CIT (A) has erred in confirming the addition in case of the assessee applying an estimated net profit rate of 1.5% on gross receipts (as reduced from 2% net profit rate estimated by the AO) by rejecting the books of account of the assessee without pin pointing any defect in the records books of the assessee and only based on subjective opinions of the AO, against the facts and circumstances of the case. 6. That in view of above facts and the fact that, detailed submissions were filed by the assessee during the course of hearing, which finds mention in Para 6 Page 5 of the assessment order, have not been considered properly and the orders have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - In case the limitation has expired after 15.3.2000, then the period from 15.3.2000 till the date on which the lock down is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of the lock down 7. The assessee has filed the present appeal in the month of July 2020 i.e., during the period of lock down. Hence, the assessee's case is covered by the order of the Hon'ble Supreme Court. We therefore, condoned the delay in filing the present appeal and allowed the Ld. Counsel for the assessee to argue the appeal. 8. Before us, the Ld. Counsel for the assessee submitted that the assessee is a truck union, formed to facilitate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70 (SC) and the Hon'ble Rajasthan High Court in the case of CIT vs. Gupta KN Construction Company, 371 ITR 291(Raj) submitted that in view of the ratio laid down in the aforesaid cases the Ld. CIT(A) ought to have considered the past history of net profit rate of the assessee while determining the net profit on estimate basis. The Ld. Counsel further submitted that in the light of the law laid down in the aforesaid cases, estimation of net profit @ 1.5% of the gross profit is unreasonable. The Ld. Counsel invited our attention to the chart showing net profit declared in the past five years including the assessment year under consideration, as per which the percentage of gross commission income of detailed receipts are as under: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of parties and perused the material on record including the cases relied upon by the authorities below and the Ld. counsel for the assessee. The grievance of the assessee is that the Ld. CIT(A) has wrongly sustained the addition @ 1.5% without taking into consideration the past history of the case of the assessee and that the Ld. CIT(A) has wrongly affirmed the action of the Assessing Officer in rejecting the books of account of the assessee without assigning any reasons. As pointed out by the Ld. counsel, in the past three years, the gross commission of the total receipts remained below 1%. The Ld. CIT(A) has determined the addition @ 1.5% and as per settled law when the books of account are rejected, the profit is determined on esti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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