Mahendra Murlidhar Patil, Jalgaon V. Joint Commissioner of Income-tax,

ITA 1563/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7417 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 31-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 11-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Depreciation
• Section: 44AD; 69C; 133A; 6; 28; 2; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO S. 1566, 1563 & 1565 /P U N/201 4 / ASSESSMENT YEAR S : 20 0 8 - 09, 2009 - 10 & 2011 - 12 SHRI MAHENDRA MURLIDHAR PATIL, PROP. OF M/S. CHAKRADHAR CONSTRUCTION, AT. : KERHALE, TAL. : RAVER, DISTT. : JALGAON PIN : 425508 PAN : AASPP8378E ....... / APPELLANT / V/S. JT. COMMISSIONER OF INCOME TAX, RANGE 1, JALGAON, / RESPONDENT . / ITA NO . 1564/PUN/2014 / ASSESSMENT YEAR : 2010 - 11 SHRI MAHENDRA MURLIDHAR PATIL, PROP. OF M/S. CHAKRADHAR CONSTRUCTION, AT. : KERHALE, TAL. : RAVER, DISTT. : JALGAON PIN : 425508 PAN : AASPP8378E ....... / APPELLANT / V/S. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2, JALGAON, / RESPONDENT 2 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 . / ITA NO S. 1689 TO 1692/PUN/2014 / ASSESSMENT YEAR S : 2008 - 09 TO 2011 - 12 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2, JALGAON, ....... / APPELLANT / V/S. SHRI MAHENDRA MURLIDHAR PATIL, PROP. OF M/S. CHAKRADHAR CONSTRUCTION, AT. : KERHALE, TAL. : RAVER, DISTT. : JALGAON PIN : 425508 PAN : AASPP8378E / RESPONDENT ASSESSEE BY : S HRI SUNIL GANOO REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 1 1 - 0 9 - 2017 / DATE OF PRONOUNCEMENT : 22 - 0 9 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH ESE SET OF CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEARS 2008 - 09 TO 2011 - 12. ITA NO. 1566/PUN/2014 BY THE ASSESSEE AND ITA NO. 1689/PUN/2014 BY THE DEPARTMENT ARE DIR ECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - II, NASHIK DATED 10 - 06 - 2014 FOR THE ASSESSMENT YEAR 2008 - 09. ITA NO. 1563/PUN/2014 BY THE ASSESSEE AND ITA NO. 16909/PUN/2014 BY THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - II, NASHIK DATED 10 - 06 - 2014 FOR THE ASSESSMENT YEAR 2009 - 10. ITA NO. 1564/PUN/2014 BY THE ASSESSEE AND ITA NO. 1691/PUN/2014 BY THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX 3 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 (APPEALS) - II, NASHIK DATED 02 - 06 - 2014 FOR THE ASSESSMENT YEAR 2010 - 11 AND ITA NO. 1565/PUN/2014 BY THE ASSESSEE AND ITA NO. 1692/PUN/2014 BY THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - II, NASHIK DATED 10 - 06 - 2014 FOR THE ASSESSMENT YEAR 2011 - 12. SINCE, THE ISSUES INVOLVED IN ALL THESE APPEALS ARE ARISING FROM SAME SET OF FACTS, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OFF BY THIS COMMON ORDER. THE ASSESSEE AND THE REVENUE HAVE ASSAILED THE FINDINGS OF COMMISSION ER OF INCOME TAX (APPEALS) PRIMARILY BY RAISING SIMILAR GROUNDS IN THEIR RESPECTIVE APPEALS FOR EACH ASSESSMENT YEAR. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A PROPRIETOR OF M/S. CHAKRADHAR CONSTRUCTION. THE ASSESSE E IS ENGAGED IN EXECUTION OF CIVIL C ONTRACTS MAINLY ALLOTTED BY GOVERNMENT AND SEMI GOVERNMENT ORGANIZATIONS. A SURVEY ACTION U/S. 133A O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) WAS CONDUCTED AT THE BUSINESS PREMISES OF ASSESSEE ON 27 - 03 - 2012 . C ERTAIN INCRIMINATING DOCUMENTS AND BOOKS OF ACCOUNT OF ASSESSEE WERE FOUND AND IMPOUNDED DURING SURVEY ACTION. THE STATEMENT OF ASSESSEE WAS RECORDED ON OATH ON 29 - 03 - 2012. IN HIS STATEMENT THE ASSESSEE MADE DISCLOSURE OF RS. 878.75 LAKHS ON ACCOUNT OF UNDISCLOSED INVESTMENTS AND EXPENDITURES D URING THE ASSESSMENT YEARS 200 8 - 09 TO 2011 - 12. HOWEVER, BEFORE THE ASSESSING OFFICER, THE ASSESSEE RETRACTED FROM DISCLOSURE MADE DURING SURVEY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASS ESSING OFFICER OBSERVED THAT THE ASSESSEE IS NOT MAINTAINING PROPER BOOKS OF ACCOUNT. THE BOOKS SUFFERED FROM VARIOUS DEFECTS WHICH INTER ALIA INCLUDE SELF MADE VOUCHERS, LACK OF DETAILS OF EXPENDITURE ON THE VOUCHERS , NO MUSTER REGISTER FOR THE WORKERS, UNVERIFIABLE PAYMENT MADE TO SUNDRY CREDITORS, ETC. THE ASSESSING OFFICER MADE LIST OF DEFECTS AND REJECTED THE BOOKS OF 4 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 ACCOUNT OF ASSESSEE. THE ASSESSING OFFICER ON THE BASIS OF STATEMENT RECORDED DURING SURVEY ESTIMATED THE INCOME OF ASSESSEE @ 15% OF THE TOTAL GROSS CONTRACT RECEIPTS. THE ASSESSING OFFICER UNIFORMLY APPLIED 15% RATIO FOR MAKING ADDITION IN ASSESSMENT YEARS 2008 - 09 , 2009 - 10 AND 2011 - 12. 2.1 IN ASSESSMENT YEAR 2010 - 11 , THE ASSESSING OFFICER MADE SPECIFIC ADDITION S U/S. 69C RS. 28,95,37 ,659/ - , U/S. 69 RS.40,02,044/ - , U/S. 69B RS.1,36,15,000/ - , DISALLOWANCE OF CONTRACT EXPENSES RS.4,09,97,440/ - AND DISALLOWANCE OF VARIOUS OTHER EXPENSES RS.8,04,078/ - . TOTAL ADDITIONS MADE BY ASSESSING OFFICER IN ASSESSMENT YEAR 2010 - 11 ARE TO THE TUNE OF RS.34,89,56,221/ - . THUS, THE ADDITIONS MADE BY ASSESSING OFFICER DURING ASSESSMENT YEARS UNDER APPEAL ON THE BASIS OF STATEMENT OF ASSESSEE DURING SURVEY ARE AS UNDER : ASSESSMENT YEAR 15% 2008 - 09 7966282 2 009 - 10 35442767 2010 - 11 - 2011 - 12 21809818 APART FROM THE ADDITION MADE ON ESTIMATION OF NET PROFIT THE ASSESSING OFFICER MADE MINOR ADDITIONS UNDER OTHER HEADS OF INCOME, AS WELL. THESE ADDITIONS ARE NOT SUBJECT MATTER OF DISPUTE IN PRESENT SET OF APPEALS. AGGRIEVED BY THE ASSESSMENT ORDER FOR THE RESPECTIVE ASSESSMENT YEARS, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIO NER OF INCOME TAX (APPEALS) UPHELD THE REJECTION OF BOOKS OF ACCOUNT BUT REDUCED ESTIMATION OF NET PROFIT FROM 15% TO 10% . IN ASSESSMENT YEAR 2010 - 11 , THE COMMISSIONER OF 5 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 INCOME TAX (APPEALS) DELETED THE ADDITIONS MADE U/S. 69C, 69B, DISALLOWANCE OF CONTRACT RECEIPTS AND DISALLOWANCE OF OTHER EXPENSES . THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION U/S. 69 RS.40,02,044/ - . FURTHER, THE CIT(A) ESTIMATED NET PROFIT @ 10% OF GROSS RECEIPTS TO COVER UP ALL OMISSIONS AND TO PROTECT THE LE AKAGE OF REVENUE. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS), BOTH, THE ASSESSEE AND THE DEPARTMENT ARE IN APPEAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE HAS FILED MODIFIED GROUNDS OF APPEAL FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 . THE MODIFIED GROUNDS OF APPEAL FOR ASSESSMENT YEAR 2008 - 09 READS AS UNDER : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C. I. T . [A] HAS ERRED IN ESTIMATING THE NET PROFIT OF THE APPELLANT FROM THE BUSINESS OF CIVIL CONSTRUCTION @ 10% OF THE GROSS RECEIPTS WITHOUT ANY COMPARABLE CASES. THE ESTIMATE OF NET PROFIT MADE BY THE LEARNED C. I. T . [A] BEING ARBITRARY, AND ABNORMALLY HIGH, THE SAME MAY PLEASE BE MODIFIED AND RESTRICTED TO REASONABLE N .P. RATIO OF 8% OF GROSS RECEIPTS. 2. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF APPEAL, IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. THE MODIFIED GROUNDS OF APPEAL FOR ASSESSMENT YEAR 2009 - 10 ARE ON SAME LINES. THE ASSESSEE IN ASSESSMENT YEAR 2010 - 11 HAS RAISED FOLLOWING GROUNDS : 1. WITHDRAWN 2. MODIFIED GROUND IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I. T.[A] HAS ERRED IN ESTIMATING THE NET PROFIT OF THE APPELLANT FROM THE BUSINESS OF CIVIL CONSTRUCTION @ 10% OF THE GROSS RECEIPTS WITHOUT ANY COMPARABLE CASES. THE ESTIMATE OF NET PROFIT MADE BY THE LEARNED 6 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 C.I.T.[A] BEING ARBITRARY, AND ABNORMALLY HIGH, T HE SAME MAY PLEASE BE MODIFIED AND RESTRICTED TO REASONABLE N .P. RATIO OF 8% OF GROSS RECEIPTS. [3] ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCES OF THE CASE AND IN LAW, IF THE ESTIMATED ADDITION AS PER APPELLATE ORDER OF CIT(A) IS CONSIDERED, THEN NET PROFIT WOULD BE AT RS.4,13,66,511/ - [RS.3,28,67,371 + DEPRECIATION RS.84,99,140], WHICH WILL BE RATED AT 12.58% [RS.4,13,66,511 / RS.32,86,73,713X100], AS AGAINST PROFIT SHOWN BY APPELLANT AT RS.3,13,91,032/ - [RS.2,28,91,891 + DEPRECIATION RS.84,99,140], WHICH IS @ 9.55% [RS.3,13,91,032 / RS.32,86,73,713 X 100]. AS THE APPELLANT HAS SHOWN REASONABLE PROFIT, FURTHER ESTIMATED ADDITION MADE AT RS.99,75,480/ - BY THE CIT(A) IS NOT JUSTIFIED AND HENCE, ADDITION MAY PLEASE BE DELETED. [4] ON THE FACTS AND IN T HE PREVAILING CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.40,02,044/ - CONSIDERING INCOME FROM OTHER SOURCES, EVEN THOUGH IT IS A ROUGH WORKING AND NO THE INCOME AS ASSUMED BY THE A.O. AND CIT( A). THEREFORE, ADDITION MAY PLEASE BE DELETED. [5] ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.40,02,044/ - CONSIDERING INCOME FROM OTHER SOURCES, EVEN THOUGH IT IS A ROUGH WORKING AND NOT ENTIRELY PERTAINING TO THE YEAR UNDER CONSIDERATION. THEREFORE, ADDITION MAY PLEASE BE DELETED. [6] THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF TH E APPEAL, IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. THE GROUNDS OF APPEAL IN ASSESSMENT YEAR 2011 - 12 ARE AS UNDER: - ( 1 ) ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) IS NOT JUSTIFIED IN ESTIMATING THE NET PROFIT RS.1,45,39,878/ - WHICH IS @ 10% ON GROSS CONTRACT RECEIPT AT RS.14,53,98,789/ - , AS AGAINST N.P. SHOWN BY THE APPELLANT AT RS.81,28,954/ - AND MADE ADDITION AT RS.64,10,924/ - , WITHOUT CONSIDERING THE NATURE OF BUSINESS AND WITH ANY COMPARABLE CASES IN THE SIMILAR LINE OF BUSINESS OF CONTRACTS. THEREFORE, ADDITION MAY PLEASE BE DELETED. ( 2 ) ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCES OF THE CASE AND IN LAW, IF THE ESTIMATED ADDITION AS PER APPELLATE ORDER OF CIT(A) IS 7 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 CONSIDERED, T HEN NET PROFIT WOULD BE AT RS.2,19,33,970/ - {RS.1,45,39,878 + DEPRECIATION RS.73,94,101], WHICH WILL BE RELATED AT 15.08% [RS.2,19,33,979/ RS.14,53,98,789.X100], AS AGAINST PROFIT SHOWN BY APPELLANT AT RS.1,55,23,055/ - [RS.81,28,954 + DEPRECIATION RS.73,94 ,101.], WHICH IS @ 10.67% [RS.1,55,23,055/ - /RS.14,53,98,789.X100]. AS THE APPELLANT HAS SHOWN REASONABLE PROFIT, FURTHER ESTIMATED ADDITION MADE AT RS.64,10,924/ - BY THE CIT(A) IS NOT JUSTIFIED AND HENCE, ADDITION MAY PLEASE BE DE L ETED. 4 . SHRI SUNIL GAN OO APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ESTIMATED NET PROFIT OF ASSESSEE AT 10% WHICH IS ON HIGHER SIDE. THE LD. AR PRAYED FOR RESTRICTING NET PROFIT RATIO AT 8% OF TOTAL GROSS RECEIPTS. THE LD. AR SUBMITTED THAT UNDER THE PROVISIONS OF SECTION 44AD OF THE ACT, ADDITION @ 8% IS ACCEPTED WHERE NO BOOKS OF ACCOUNT ARE MAINTAINED BY THE ASSESSEE . THE TRIBUNAL IN VARIOUS CASES AFTER UPHOLDING REJECTION OF BOOKS HAS ACCEPTED NET PROFIT @ 8% OF TOTAL G ROSS RECEIPTS. 4 .1 AS REGARDS ADDITIONS SUSTAINED BY COMMISSIONER OF INCOME TAX (APPEALS) IN ASSESSMENT YEAR 2010 - 11 , THE LD. AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ADDITION U/S. 69 OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SURVEY. THE ADDITIONS HAVE BEEN MADE MERELY ON THE BASIS OF STATEMENT OF ASSESSEE RECORDED DURING SURVEY PROCEEDINGS. IT IS A WELL SETTLED LAW THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF S TATEMENT WITHOUT THERE BEING ANY COGENT EVIDENCE. THE LD. AR POINTED THAT THOUGH DURING COURSE OF SURVEY, THE ASSESSEE ADMITTED AND DECLARED ADDITIONAL INCOME , H OWEVER, AT SUBSEQUENT STAGE THE ASSESSEE RETRACTED FROM THE STATEMENT. THEREFORE, NO RELIANCE CAN BE PLACED ON THE STATEMENT OF ASSESSEE FOR MAKING ADDITIONS. THE ASSESSING OFFICER WITHOUT ANY BASIS ESTIMATED NET PROFIT @ 15%. IN FIRST APPEAL, THE COMMISSIONER OF INCOME 8 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 TAX (APPEALS) REDUCED IT TO 10%. HOWEVER, WHILE DETERMINING THE RATE AT 10% NO RATIONAL HAS BEEN GIVEN BY COMMISSIONER OF INCOME TAX (APPEALS). 4.2 THE LEARNED AUTHORIZED REPRESENTATIVE FILED AN APPLICATION TO WITHDRAW GROUND NO.1 IN APPEAL FOR ASSESSMENT YEAR 2010 - 11. 5 . ON THE OTHER HAND SHRI AJAY MODI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS REDUCED THE RATIO OF NET PROFIT FROM 15% TO 10% WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAD MADE DISCLOSURE OF RS.8.78 CRORE S DURING SURVEY. NO VALID REASON HAS BEEN GIVEN BY ASSESSEE TO RETRACT FROM THE STATEMENT AND DISCLOSURE MADE DURING SURVEY. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER IGNORED THAT INCRIMINATING MATERIAL WAS FOUND DURING SURVEY . THE LD. DR PRA YED FOR MODIFYING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) TO MAKE IT IN LINE WITH THE ASSESSMENT ORDER. 6 . W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . DURING THE COURSE OF SURVEY PROCEEDINGS STATEMENT OF THE ASSESSEE WAS RECORDED. IN HIS STATEMENT THE ASSESSEE ADMITTED TO CERTAIN INVESTMENT AND EXPENDITURE WHICH ARE TABULATED HERE - IN - BELOW : FINANCIAL YEAR HEAD 07 - 08 08 - 09 09 - 10 10 - 11 11 - 12 TOTAL IL LEGAL PAYMENTS 2.90 40.03 98.44 45.51 30.7 217.58 UNACCOUNTED L OANS -- 5.00 35.01 56.20 55.19 151.40 JEEP I NVESTMENT -- -- 1.65 -- -- 1.65 UNACCOUNTED E XPENDITURE -- 65.00 -- -- 94.47 159.47 INVESTMENT S -- -- -- -- 77.80 77.80 9 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 PROFIT ON CONSTRUCTION FOR DATTA FIBRE -- -- -- -- 24.75 24.75 UNACCOUNTED INVESTMENT IN CONST. -- -- -- -- 52.00 52.00 2.90 110.03 135.10 101.71 334.91 684.65 APART FROM ABOVE , THE ASSESSEE DISCLOSED THAT THE SHARES ON PREMIUM WERE PRIVATELY PLACED IN DATTA AGRO SERVICES PVT. LTD. IN THE NAME OF VARIOUS PERSONS DURING FINANCIAL YEAR 2010 - 11 I.E. PERIOD RELEVANT TO THE ASSESSMENT YEAR 2011 - 12 FROM SUPPRESSED RECEIPTS OF FINANCIAL YEAR 2007 - 08. THE DETAILS OF INVESTMENTS MADE BY ASSESSEE IN THE NAME OF VARIOUS PERS ONS ARE AS UNDER: 1 . SHRI SANJAY DIGAMBAR PATIL. 1137500 2 . SHRI SHANKAR MOHAN JADHAV 3000000 3 . SHRI VINOD JAGANNATH PATIL 3543000 4 . SHRI AJIT ASHOK RANE 3145000 5 . SHRI SANJAY DIGAMBAR PATIL 1987500 6 . SHRI YOGESH NAMDEV MAHAJAN 1200000 7 . SHRI VINOD JAGANNATH PATIL 1893000 8 . SHRI YOGESH NAMDEV MAHAJAN 1917000 9 . SHRI SHAIKH YUSUF SHAIKH SARVER 1587500 ------------------------------------ 19410500 -------------------------------------- THUS, THE TOTAL DISCLOSURE FOR THE ASSESSMENT YEAR 2011 - 12 WAS TO TH E TUNE OF RS.2.95 CRORES. SUBSEQUENTLY, THE ASSESSEE RETRACTED FROM THE DISCLOSURE MODE. THE ASSESSING OFFICER MADE ADDITION BY ESTIMATING INCOME @ 15% OF THE TOTAL GROSS CONTRACT RECEIPTS IN ASSESSMENT YEARS 2008 - 09, 2009 - 10 AND 2011 - 12 . IN FIRST APPEL LATE PROCEEDINGS THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD REJECTION OF BOOKS OF ASSESSEE. HOWEVER, THE RATE OF NET PROFIT ESTIMAT ED BY ASSESSING OFFICER AT 15% TONE DOWN TO 10% . THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE NET PROFIT AT 15% HAS BEEN ESTIMATED BY RELYING ON THE 10 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 STATEMENT RECORDED DURING SURVEY ACTION THOUGH, THE SAID STATEMENT WAS SUBSEQUENTLY RETRACTED BY ASSESSEE. EXCEPT FOR THE STATEMENT OF ASSESSEE NO OTHER JUSTIFICATION FOR MAKING NET PROFIT AT 15% HAS BEEN GIVEN . DURING THE PROCEEDINGS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE FURNISHED COMPARABLE CHART OF NET PROFIT FOR THE FINANCIAL YEARS 2007 - 08 TO 2012 - 13 RANGING BETWEEN 5.09% TO 6.96%. THE COMMISSIONER OF INCOME TAX (APPEALS) UN IFORMLY E STIMATED NET PROFIT @ 10% OF GROSS CONTRACT RECEIPTS IN ALL THE ASSESSMENT YEARS UNDER APPEAL I.E. ASSESSMENT YEARS 2008 - 09 TO 2011 - 12 . 7. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS MADE IRREGULARITIES IN RECORDING FINANCIAL TRANSACTIONS. THERE ARE CERTAIN UNEXPLAINED EXPENDITURE AND INVESTMENTS. THE ASSESSEE IN GROUNDS OF APPEAL AS AGREED FOR ESTIMATED ADDITION OF NET PROFIT @ 8%. CERTAINLY , ESTIMATION OF INCOME @ 15% OF GROSS CONTRACT RECEIPTS IS ON HIGHER SIDE AND WITHOUT ANY RATIONAL . THE LD. DR HAS NOT BEEN ABLE TO SUBSTANTIATE THE ACTION OF ASSESSING OFFICER IN ADOPTING 15% RATIO. AFTER TAKING INTO CONSIDERATION TOTALITY OF FACTS, WE ARE OF CONSIDERED VIEW THAT IF THE ESTIMATION OF NET PROFIT AS PROPOSED BY COMMISSIONER OF INCOME TAX (AP PEALS) IS FURTHER REDUCED BY 1% (ONE PERCENT) I.E. BROUGHT DOWN TO 9% OF TOTAL GROSS CONTRACT RECEIPTS FOR ALL THE ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2008 - 09 TO 2011 - 12 , IT WOULD MEET THE ENDS OF JUSTICE. WE HOLD AND DIRECT, ACCORDINGLY. 8. IN VIEW OF OUR ABOVE FINDINGS APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2008 - 09, 2009 - 10 AND 2011 - 12 AND MODIFIED GROUND / GROUND NO.2 AND 3 IN APPEAL FOR ASSESSMENT YEAR 2010 - 11 ARE PARTLY ALLOWED. 11 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 9 . IN ASSESSMENT YEAR 2010 - 11, THE ASSESSING OFFICER HAD MA DE ITEMIZED ADDITION S TO THE TUNE OF RS.34,89,56,221/ - , ON VARIOUS COUNTS. IN FIRST APPELLATE PROCEEDINGS, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED ADDITION U/S. 69 IN RESPECT OF UNEXPLAINED INVESTMENTS RS.40,02,044/ - ONLY AND DELETED THE REMAINING ADDITIONS . THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE CONFIRMING THE AFORESAID ADDITION OBSERVED AS UNDER: 11.2 DURING THE APPELLATE PROCEEDINGS, I HAVE GONE THROUGH THE ASSESSMENT ORDER, REMAND REPORT AND THE APPELLANT' SUBMISSION AND COMMENTS ON R EMAND REPORT AND FIND THAT THERE IS NO FORCE IN THE CONTENTION OF THE APPELLANT. I HAVE VERIFIED THE SAID IMPOUNDED PAPERS ON THE BASIS OF WHICH ADDITION WAS MADE BY THE A.O. AND FIND THAT THERE IS CLEAR INDICATION THAT THESE ARE THE RECEIPTS OF OTHER SOUR CES, RENT, ETC. OF THE APPELLANT. IT IS ADMITTED BY THE APPELLANT THAT THERE ARE CERTAIN TRANSACTIONS RECORDED IN THE IMPOUNDED REGISTERS, HOWEVER, THEY HAVE NOT BEEN RECORDED IN THE APPELLANT'S BOOKS. AS THE APPELLANT HAS NOT RECORDED THESE INCOME FROM OT HER SOURCES, THE A.O. IS JUSTIFIED IN MAKING THE ADDITIONS. THEREFORE, THE ADDITION MADE BY THE A.O. OF RS.40,02,044/ - IS HEREBY CONFIRMED. THE LD. AR OF ASSESSEE HAS FAILED TO CONTROVERT THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) WITH RESPECT TO AFORESAID ADDITION. THESE RECEIPTS ARE STATED TO BE OVER AND ABOVE TRADING RECEIPTS. ACCORDINGLY, WE FIND NO REASON TO TAKE A CONTRARY VIEW. THUS, GROUND NO.4 AND 5 RAISED BY ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 2010 - 11 ARE DISMISSED. IT WOULD BE RELEVANT TO MENTION HERE THAT ADDITIONS MADE U/S 69 ARE ON DIFFERENT FOOTING AND THESE ARE NOT COVERED BY ESTIMATION OF BUSINESS INCOME. ESTIMATION TAKES CARE OF ADDITIONS MADE UNDER SECTIO NS 28 TO 43C OF THE ACT. OUR THIS VIEW IS SUPPORTED BY ( 1 ) KALE KHAN MOHAMMED HANIF VS. CIT; 50 ITR 1 (SC) ( 2 ) CIT VS. G.S. TIWARI & CO. 357 ITR 651 (ALL) 12 ITA NO S. 1563 TO 1566 & 1689 TO 1692/PUN/2014 ( 3 ) ITO VS. DEVI SINGH SALONKI 154 TAXMAN 155 (JP) (MAG) 10. IN VIEW OF THE REQUEST MADE BY LD. AR TO WITHDRAW GROUND NO.1 RAISED IN APPEAL FOR ASSESSMENT YEAR 2010 - 11, THE SAID GROUND IS DISMISSED AS WITHDRAWN. 11 . IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND THE APPEALS BY THE DEPARTMENT ARE DISMISSED . ORDER PRONOUNCED ON FRIDAY , THE 22 ND DAY OF SEPTEMBER, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 22 ND SEPTEMBER, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - II, NASHIK 4. / THE CIT - II, NASHIK 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE