DCIT, Circle - 10(1), Kolkata , Kolkata V. M/s. Bridge & Building Construction Co. Pvt. Ltd., Kolkata

ITA 375/KOL/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5655 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP CHAUBE
• Keywords: Business income; Revision of order; Depreciation; Search and seizure; Principle of natural justice; Rule of consistency; Question of law; Corroborative evidences; Assessment record; TDS; Set aside
• Section: 68; 145; 263; 28; 144; 44AD; 143(3); 142(1); 40(a)(ia); 133(6); 250; 207; 264; 192; 113; 72; 13; 145(3); 153C

Judgement Text

1 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 आयकर अपील य अधीकरण, यायपीठ –“B” कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA [Before Hon’ble Shri A. T. Varkey, JM & Shri Manish Borad, AM] I.T.A. Nos. 374 & 375/Kol/2018 Assessment Years: 2012-13 &2014-15 DCIT, Circle-10(1), Kolkata Vs. M/s. Bridge & Building Construction Co. Pvt. Ltd. (PAN: AADCB0689E) Appellant Respondent I.T.A. Nos. 533/Kol/2018 Assessment Years: 2012-13 M/s. Bridge & Building Construction Co. Pvt. Ltd. (PAN: AADCB0689E) Vs. DCIT, Central Circle- 2(1), Kolkata Appellant Respondent I.T.A. Nos. 534/Kol/2018 Assessment Years: 2014-15 M/s. Bridge & Building Construction Co. Pvt. Ltd. (PAN: AADCB0689E) Vs. ACIT, Central Circle- 2(1), Kolkata Appellant Respondent I.T.A. No. 2116/Kol/2018 Assessment Year: 2013-14 M/s. Bridge & Building Construction Co. Pvt. Ltd. (PAN: AADCB0689E) Vs. ITO, Ward-10(1), Kolkata Appellant Respondent Date of Hearing (Virtual) 20.10.2021 Date of Pronouncement 23.12.2021 For the Appellant Shri Sandeep Chaube, Sr. DR For the Respondent Shri Amit Kothari, A.R 2 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 ORDER Per Shri MANISH BORAD,AM: The above captioned Cross appeals for A.Y. 2012-13 & 2014-15 and assessee’s appeal for A.Y. 2013-14are directed against the order of Ld. Commissioner of Income Tax(Appeals) (in short ‘Ld. CIT],- 20Kolkata, dated 28.12.2017& 09.08.2018 which is arising out of the order u/s 144 r.w.s. 143(3) of the Income Tax Act 1961(In short the ‘Act’) framed by DCIT-Central Circle -2(1) Kolkata. 2. As the issues raised in these appeals are common and relate to same assessee, at the request of all the parties all the appeals were heard together and are being disposed of by this common order for sake of convenience and brevity. We will first take up Cross Appeal bearing ITANo.374/KOL/2018 & ITANo.533/KOL/2018 pertaining to A.Y. 2012-13 3. Brief facts of the case as culled out from the records are that the assessee is a Private Ltd. Company engaged in the business of construction of building bridges. Income of Rs. 35,09,550/- declared in the return of income filed on 30 th September 2012. Notices u/s 143(2)& 142(1) of the Act were issued but there was no compliance. Subsequently the assessee made submissions through Speed Post on 12.03.2015 but the said submission did not contain the requisite 3 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 information asked by the Ld. AO. Since the ld. AO did not receive necessary information, he disallowed the total expenses claimed in the P & L Account. Similarly, Ld. AO possessed the information from AIR about sale of immovable property but due to lack of necessary details which were not furnished by the assessee, the sale consideration from immovable property was also disallowed. Based on the records available Ld. AO proceeded to frame ex-parte order u/s 144 of the Act, assessing the income at Rs.113.41 Cr. after making disallowance of expenses at Rs.110.22 cr., cash deposited in bank account at Rs.2,00,000/- and unexplained sale of immovable property at Rs.2,81,70,890/-. 4. Aggrieved assessee preferred an appeal before the ld. CIT(A) challenging the various additions made by Ld. AO. Various details including audited financial statements were filed by the assessee along with net profit rate, chart for preceding three financial years, copy of assessment order for previous years where the Ld. AO has accepted the book results or had made minor additions. As regards the income from business was concerned Ld. CIT(A) applied net profit rate of 8% on the gross business turnover for the year, setting aside the finding of ld. AO of denying the claim of total expenses incurred during the year. Ld. CIT(A) also appreciated the fact that sales 4 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 turnover of the assessee is not in dispute. As far as the remaining additions were concerned the assessee failed to get any relief and assessee’s appeal was partly allowed. 5. Aggrieved both assessee and revenue are now in appeal before this Tribunal raising following grounds of appeal: The grounds of appeal of the assessee in ITANo. 533/Ind/2018 reads as under: 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in considering net profit @8% of the revenue from operations which works out to Rs.6,99,65,678/- on estimated basis. 2. That on the facts and in the circumstances of the case, Ld. CIT(A) is wrong and unjustified in confirming the action of assessing officer who added so-called sale of immovable property amounting to Rs.2,81,70,890/- to the total income. 3. That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the addition on account of cash deposit of Rs.2,00,000/- on the basis of ITS data. 4. That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing of the appeal. The grounds of appeal of the Revenue in ITANo. 374/Ind/2018 reads as under: 1]. The Ld.CIT(A) has erred in deleting the disallowances of expenses of Rs.110.21 Cr. and estimated the net profit @8% of revenue from operation especially when the said expenditure was inclusive of purchase and remained unsubstantiated during the assessment proceeding before A.O. 2]. The Ld.CIT(A) erred in deleting the disallowances of expenses which was inclusive of purchase which remained unverified and therefore warranted disallowance of the entire sum. 3]. The Ld.CIT(A) erred in deleting the disallowances made towards expenses without appreciating the fact that the assessee had not been able to produce any supporting evidences of its claim and also Ld. CIT(A) decided the issue without reminding to AO for verification. 4]. The appellant craves to add, delete or modify any of the grounds of appeal before or at the time of hearing. 5 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 6. Ld. counsel for the assessee has submitted following written submissions: 1] As regards ground of appeal No. 1 of assessee's appeal and ground of appeal No. 1 to 3 of departmental appeal. a] That in the audited financial statement the assessee had disclosed income and expenditure as under:- Particulars Amount Particulars Amount Opening stock 5,68,47,415 Contract receipts (sales) 87,45,69,722 Purchases [ work allotted to sub contractors back to back] 79,61,15,855 Commission and other receipts 11,17,53,928 Fright, Power & Fuel and Salary & Wages 14,49,03093 Other income 7,76,96,586 Other expenses against other income 7,30,20,695 Closing Stock 4,16,85,144 Direct and Indirect expenditure 3,13,08,769 110,57,05,380 Provision for tax 10,84,552 Net Profit 24,25,101 110,57,05,380 110,57,05,380 b] The ld AO had treated the entire expenditure of Rs 1,10,21,95,827 excluding provision for tax as bogus and made addition in the assessment order without considering corresponding receipts as declared by assessee. The mode of computation of income as adopted by ld AO is not only against the principal of natural justice but also contrary to rule of consistency and provision of law. The gross receipts were being taken as income by the AO. c] That the assessee had shown contract receipts amounting to Rs 87,45,69,722/- out of which he had allotted contract work of Rs 79,61,15,855 to sub-contractors and out of remaining work, had done through petty contractor under his supervision or by himself. The commission and other income in respect of such transaction are appearing in audited financial statements. Furthermore during the year the assessee company had shown other income of Rs 7,76,96,586/- against which had claimed expenditure of Rs 7,30,20,695/- the said transaction are related to brokerage and others etc and there was no discrepancy between the purchase & other expenditure shown and the sales & income declared by the assessee. d] It is submitted that in A.Y. 2009-10, 2010-11 and 2011-12 while completing the original assessment order, the ld AO had not made any disallowances of expenditure rather looking to nature of business activities and profit rate declared had been accepted and accordingly the ld AO had accepted the business income as declared. It is worth to mentioning here that in A.Y. 2011-12, the ld CIT had also passed the revision order u/s 263 on 15/01/2015 and consequence to such order, the ld AO passed the 6 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 assessment order. However in appeal before ITAT Kolkata Bench against order u/s 263, the Hon’ble Tribunal had quashed the order u/s 263 of the Act. e] That the power of the assessing officer, is not an arbitrary power, but such power ought to be exercised judicially and estimating the income under best judgment assessment as per the Rules of justice & equity and goods concise. The Hon’ble Supreme Court in the case of State of Orissa v. Maharaja Shri B.P. Singh Deo reported in 76 ITR 690 (SC) held that the mere fact that the materials placed by the assessee were unreliable did not empower the Assistant Collector to make an arbitrary order of enhancement. The power to levy assessment on the basis of best judgment is not an arbitrary power. The assessment had to be based on relevant material. Further also same view had been taken by the Hon’ble Supreme Court in the case of BrijBhushanLalParduman Kumar vs. CIT reported in 115 ITR 524 (SC). Further also the Hon’ble Supreme Court in the case of CIT v. Excel Industries Limited (2013) 358 ITR 295 (SC), held that income tax cannot be levied on hypothetical income and it has really accrued to the assessee. f] From the order it is appeared that in the case of assessee the ld AO had used arbitrarily power and has rejected one side i.e. debit side of audited P&L a/c and disallowed the entire expenditure as claimed by assessee, however corresponding other side on such audited P&L a/c where the source of such expenditure had been recorded i.e. gross business receipt and income which has been treated as genuine. If the expenditure claimed by appellant as bogus, than the A.O ought to have reduced the corresponding income shown by the appellant. Since the expenses under these heads were incurred for the purposes of business, not for the year under consideration but in the past also, and same was allowed by department and as such the disallowances so made by ld AO is not only contrary to principal of accountancy but also gross violation of principal of natural justice. g] In appeal before CIT(A), the ld CIT(A) had restricted the addition by applying net profit rate 8% as per provision of section 44AD of the Act on gross contract receipts as declared by assessee. The finding recorded by ld CIT(A) reads as under:- "8.3.3 However, what the AO's had erred in the above assessments is to disallow the entire expenditures. For the AY 2012-13 I have already pointed out a big error by the DCIT AO wherein the figure mentioned by him of total expenses as being at Rs. 110,21,95,827 is firstly not so, and, far exceeds the total expenses debited to the P&L a/c which is at Rs. 106,05,10,683. Then, it just cannot be that the entire expenses be disallowed - when it is an accepted fact that the appellant had been carrying on its business for decades; and, there are substantial revenues from operations. 8.3.4 Thus, considering the facts and circumstances, estimation is required. And to resort to estimation is legally valid as the assessment has been made u/s 144, and so, read with section 145(3) which states that the assessment may be made in the manner provided in section 144. Thus, in the circumstances, estimation is hereby made by referencing to presumptive section 44AD for benchmarking sake. Therefore, I consider that 7 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 the net profit be estimated at 8% of the revenue from operations. This works out to 8% x 87,45,69,722 = Rs. 6,99,65,578/-. 8.3.5 Thus, in place of the disallowance of the entire expenditure debited to the P&L a/c, it is to be substituted estimation of net profit on revenue from operations at 8%, which works out to Rs. 6,99,65,578/-." h] It is submitted that the presumptive section 44AD had been applied by the ld CIT(A) in the case of assessee is contrary to the law laid down by the Hon'ble Courts in following cases:- i. Rajasthan High Court in case of Shree Ram JhanwarLalVs. ITO 10 DTR 229 held that “where gross receipt of a contractor exceed Rs. 40 lacs, section 44AD cannot be applied”. ii. The Hon'ble Punjab & Haryana High Court in the case of CIT vs. Surinder Pal Anand [2010] 192 Taxman 264 (Punjab & Haryana), under identical circumstances has held as follows:- "7. Section 44AD of the Act was inserted by the Finance Act, 1994 with effect from 1-4-1994. Sub-section (1) of section 44AD clearly provides that where an assessee is engaged in the business of civil construction or supply of labour for civil construction, income shall be estimated at 8 per cent, of the gross receipts paid or payable to the assessee in the previous year on account of such business or a sum higher than the aforesaid sum as may be declared by the assessee in his return of income notwithstanding anything to the contrary contained in sections 28 to 43C of the Act. This income is to be deemed to be the profits and gains of said business chargeable of tax under the head "profits and gains" of business. However, the said provisions are applicable where the gross receipts paid or payable does not exceed Rs. 40 lakhs. iii. The Hon'ble ITAT, Kolkata Bench in the case of ITO V/s ShriRabindraNath ITA No 1097/Kol/2015 dated 20/04/2018 "We have heard the rival contentions of both the parties and perused the materials available on record and the judicial decisions cited by the parties. In the present case assessee failed to comply the notice issued u/s 142(1) of the Act therefore the AO framed the assessment u/s 144 of the Act by estimating the profit @ 5% of the total turnover declared by assessee. However, Ld. CIT(A) reduced the rate of profit from 5% to 1% after considering the past history of assessee. From the foregoing discussion, we note that the best judgment assessment framed u/s 144 of the Act has not been disputed / challenged by assessee. Now the limited issue which arises for our consideration is the rate of profit to be applied on the turnover of the assessee. In this regard, we note that the AO has applied rate of profit @ 5% without giving any basis and after ignoring the profit declared by assessee in the earlier years. In our considered view, it is the duty of the AO to provide some basis for adopting the rate of profit @ 5%. It appears that AO has been guided by the provision of Sec. 44AF of the Act wherein the income is determined on presumption basis. It is undisputed fact that provision of Sec. 44AF are applicable only to those assessees having turnover up to ₹40 lakh only and engaged in the business of retail trading. In the case on hand none of the condition as specified u/s 44AF of the Act was satisfied. Therefore, in our considered view the AO has erred in estimating the income at a rate by 8 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 taking the shelter u/s 44AF of the Act. It is settled proposition of law that AO while estimating the profit under best judgment assessment has to act judicially and honestly." iv. That the Hon’ble special bench of the ITAT Delhi in the case of Dy. CIT vs. Allied Construction reported in 105 ITD pg 1 after due considering the law as laid down by Hon’ble Supreme Court it had been held that: “Having come to the conclusion that the assessment has to be made in the manner provided in s. 144 of the Act, we may add that such assessment has to be reasonable and based on good faith and not arbitrary or capricious. It is the case of both the parties that past results, as assessed finally, form a reasonable basis for such an estimation, although other material on record can also be taken into account. Our view finds support from the decision of the Hon’ble Chief Court of Oudh in the case of Abdul Qayum& Co. vs. CIT (1933) 1 ITR 375 (Oudh), wherein it was held that although the AO was not bound by strict judicial principles, he should be guided by rules of justice, equity and good conscious. In the case of State of Orissa vs. Maharaja Shri B.P. Singh Deo (1970) 76 ITR 690 (SC), Hon’ble Supreme Court held that the power of levy on best judgment was not an arbitrary power. The assessment had to be made on relevant material. Hon’ble Calcutta High Court, in the case of CIT vs. Ranicherra Tea Co. Ltd. (1995) 124 CTR (Cal) 113 : (1994) 207 ITR 979 (Cal), also held that although the AO is not bound by strict judicial principles, in making best judgment assessment, he does not possess absolutely arbitrary authority to assess any figure as he likes. He should be guided by the rules of justice, equity and good conscious. Looking to the ratio of these cases, if past results showed loss or nominal net profit rate, then, the AO will not be justified in applying 8 per cent rate.” i] That when the profit rate declared by the assessee had been accepted under scrutiny assessment in A.Y. 2009-10, 2010-11 & 2011-12 and the method of computation of income followed by the assessee had been duly accepted. Therefore the ldCIT(A) should have applied the profit rate looking to the past history of the case. It is crystal clear from the above chart, that the appellant never achieved a net profit of 8% of turnover in the past. Even the net profit for 3 years on an average works to less than 0.30% only. The income of the assessee has to be estimated by the CIT(A) after considering the past accepted results of the assessee as held by the Hon'ble Supreme Court, Hon'ble High Courts and various benches of Hon'ble ITAT. The Hon'ble Calcutta High Court in the case of Dabros Industries Company (P) Ltd Vs CIT (1977) 108 ITR 424 (Cal) held as under - "Accounts - rejection -ITO applied s.145 and made certain additions on the basis of past performance in absence of proper accounts to arrive at a correct profit -rejection and estimation on the basis of available material justified - once the books of accounts of an assessee are rejected then profit has to be estimated on the basis of available material." i. That in the case of Coast Liners Pvt. Ltd., ITA No. 571/Kol/2017 dated 10/10/2018 the Hon'ble ITAT, Kolkata Bench has held that "where income was assessed on basis of estimate u/s 144 of a transport operator. The Ld A.O. did not consider the past history of the assessee and comparable cases 9 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 but straightway applied the rate prescribed under section 44AD which applies where no books are maintained and no Tax Audit Report is obligatory." ii. The Hon'ble Rajasthan High Court in the case of M/s BhawanVa Path Nirman (Bohra) & Co. reported in 258 ITR 431 in which the Hon'ble High Court held that "the Tribunal while accepting the basic net profit rate on the basis of the history of case, has found no reason to deviate from the past history of estimating the income of the assessee." The SLP filed by the department stood dismissed by the Hon'ble Supreme Court reported in 264 ITR ST 36. iii. Further also the Hon'ble Rajasthan High Court in the case of CIT v/s Laxminath Infrastructure Pvt. Ltd. in D.B. I.T. No. 189/2014 dated 17/11/2015 in which the Hon'ble High Court held that "that in case the assessee shows better result during the year under consideration as compared to past year, then there is no need for making any further addition. The finding arrived by the Tribunal is in consonance with the settled law, therefore, no addition in the income could have been made by the Assessing Officer. The Tribunal rightly declared the addition made as erroneous. The appeal does not involve any substantial question of law, hence, dismissed." iv. The Hon'ble ITAT Cuttak Bench in the case of ShreegopalMundhravs ITO in ITA No.437/CTK/2016 for assessment year 2010-2011 order dated 30.1.2017 has held as under:- “I find that the rejection of books of account of the assessee is not under challenge before me. The only submission of the ld A.R. of the assessee is that the net profit rate applied to estimate the income is excessive. It is not in dispute that the net profit rate declared and accepted by the department in the immediately preceding assessment year’s is in A.Y. 2007-08 @ 3.04%, in A.Y. 2008-09 @ 2.77% and in A.Y. 2009-10 @ 2.64%. In my considered view, after rejecting of book results of the assessee, the income of the assessee has to be estimated by the Assessing Officer but while doing so, he cannot make a wild guess of the same. The past accepted results are a guide to the estimation of the income of the assessee. Considering the past accepted results of the assessee, I am of the considered view that estimation of income of the assessee by applying the net profit rate of 4% will meet the ends of justice. I, therefore, modify the order of the CIT(A) accordingly and partly allow the ground of the appeal of the assessee.” v. In the case of CIT vsInani Marbles (P) Ltd [2009] 316 ITR 125 (Raj.) held that‘The Tribunal held that in the absence of any change in the factual position normally the profit rate declared and accepted in the preceding year, constitutes a good basis for working out the gross profit” vi. Further also Hon’ble Orissa High Court in the case of CIT VsNandaramHunda Ram (1976) 103 ITR 433, wherein it is held that “if the assessee failed to produce acceptable accounts revenue would be on the decision of Royal medial Hall vs. CIT (1962) 46 ITR 748 (AP) wherein it is held that “estimate of income on the basis of materials available and the past assessment record was held proper” 10 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 j] Further also in the case of sister concern of assessee company who have similar nature of business and on identical facts the Hon'ble Bench had held as under:- ITO V/S B.B.C. PROJECT SERVICES, ITA NO. 1669/KOL/2016 A.Y. 2009-10 (KOLKATA BENCH "B" KOLKATA) "3. We find in this backdrop of pleadings that CIT(A)'s order qua the instant twin issue(s) reads as follows:- "5. I have considered the submissions of the AR of the appellant and have also gone through the assessment order on the issue at hand. I find that facts emerging from records reveal that the appellant submitted primary documents in support of return already filed i.e. copy of return (ITR-6), Audited Accounts, Tax Audit Report u/s 44AB, Computation of Income etc. on 02.11.2012. Perusal of audit report i.e. Form 3CD reveals that the company maintained books of account as detailed against item 9(a) & (b). It also appears that Tax Audit Report has been submitted by Auditor after due examination of all the books of account as specified therein. 5.3 I find from the particulars available at schedule 12 that Rs. 6,64,83,650/- was debited in the P&L a/c as incentive to agents. The payment of incentives to agents cannot be equated as commission payments by any means. Hence, the provision of Section 194H have no applicability for such payments and consequently, the question of disallowance u/s 40(a)(ia) does not arise. I further find that the appellant has not complied before the AO. The appellant has not even produced complete books of account before me and I find from the record that there has been repeated non-compliance by the appellant before the AO. Therefore the books of account are liable to be rejected. However, I also agree with the logistic contention of the AR that disallowance of entire incentive to agents amounting to Rs. 6,64,83,650/- would only result in an absurd net profit rate of 13.90% in this particular line of business in which the appellant company is engaged in. Considering the facts and circumstances of the case as well as the normal profit rends in this line of business, I am of the view that book profit declared is liable to be rejected. The income of the company may be estimated keeping in view materials available on record. In this regard, I have already decided the appellant's appeal for the AYs 2001-11 & 2011-12 by adopting the theory of estimation. Following the same principle, total income is estimated @ 0.4% of total turnover of Rs. 48,47,08,894/- which works to Rs. 19,38,835/-. The AO is directed accordingly. The appellant get a relief of Rs. 6,54,70,185/- (6,74,09,020/- - 19,38,835)." 4. Learned CIT -DR vehemently contends during the course of hearing that CIT (A) has erred in law as well as on facts in estimating assessee's income @ 0.4% of its total turnover. He fails to dispute the fact the CIT(A) has gone by his findings in earlier assessment years thereby adopting the judicial consistency. The said estimation in earlier assessment years has admittedly attained finality. There is no other material to dispute correctness thereof failed during the course of hearing. We therefore find no fault in CIT(A)'s action estimating the assessee's income @ 0.4% of its turnover. 5. The Revenue's latter substantive ground seeking to revive u/s 40(a)(ia) (supra) that has no legs to stand since the relevant books forming foundation 11 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 thereof already stand rejected. The Revenue fails in its both substantive grounds accordingly." k] From the above it is crystal clear that, the addition made by ld AO and sustained by LdCIT(A) is not justifiable as the profit rate declared and accepted in past three years less than 0.50% and also in the comparable case where Hon’ble ITAT Kolkata Bench had adopted profit rate 0.50% as reasonable. Further also the law is settled that estimate of income on the basis of the past assessment record or comparable case was held proper” Therefore kindly accept the declared result of assessee company which is not only reasonable looking to nature of business but also comparable and oblige. l] It is further relevant to mentioned here that on such transaction the assessee earned commission income which was dully disclosed and accepted by ld AO. On the identical facts the Hon'ble Rajasthan High Court in the case of CIT v/s Consulting Engineering Group Ltd. reported in 369 ITR 284 held that when the contract work allotted to sub contractor on commission basis and the ld AO found such transaction are not real transaction the ld AO should have made addition in respect of commission earned on such transaction not entire transaction as undisclosed income of the assessee. m] The Hon'ble The Supreme Court in the cases of CIT v. M/s. Woodward Governor India P. Ltd. [2009] 312 ITR 254 (SC) and CIT v. Realest Builders & Services Ltd [2008] 170 TAXMAN 218 (SC) has emphasized the importance of method of accounting regularly employed by the taxpayer. The Supreme Court in the case of Realest Builders & Services Ltd. has held that the tax department needs to provide facts and figures that the impugned method of accounting adopted by the taxpayer results in underestimation of profits for changing the method of accounting under Section 145 of the Act. Otherwise, it will be presumed that the entire exercise is revenue neutral. Method of Accounting regularly followed by the taxpayer which was accepted by the AO in past cannot be rejected in future years without expressing the dissatisfaction about the correctness or completeness of the accounts of the assessee. In light of above, the addition made by ld AO and partly sustained by Ld CIT(A) may kindly be deleted. 2] As regards ground of appeal No. 2 of assessee's appeal relating to addition of Rs 2,81,70,890/- in respect of unexplained income from sale of property. a] As submitted that the assessee company is also dealing in sale and purchase of properties on commission basis and had shown income from brokerage in the books of account. On behalf of purchaser the assessee company had made agreement with seller and thereafter had transferred the property in the name of purchaser as it is regular practice in line of business. b] It is worthwhile to mention here that the assessee company is working as a broker, makes agreement for purchase of the property for his clients, and ultimately the sale deed is executed in favour of his client. The payments made and against such purchase in turn consideration received from his clinet are all verifiable from the books of accounts. All these transactions as 12 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 carried out in the form of broker and made on behalf of its client and the payment had been received and made through banking channel by the assessee company after deducting brokerage income and as such the allegation made by the ld AO and sustained by the CIT(A) is not justifiable. c] The appellant had duly recorded the payments made towards such agreement so made, and had also duly recorded the ultimate sale of these properties in his regular books of accounts. The income earned from such transactions had been also shown had also been taxed, and now again the gross payments made is being taxed. Like in the case of contract income, where the entire expenditure was disallowed in the similar manner, in this case also the entire payments made been added to the income. The brokerage income has been taxed, the receipts had been taxed, but the corresponding payments had been added to the income, which deserves to be deleted. d] Furthermore on identical facts and circumstances the assessee company had made similar transaction in A.Y. 2011-12 in which the director of the company had filed affidavit and explanation before the department and the department had accepted the facts and explanations furnished by the assessee. e] The ld CIT had issued notice u/s 263 to the assessee company for A.Y. 2011-12 in respect of alleged transactions and some other issues and accordingly passed the order u/s 263 by the ld CIT on 15/01/2015. The order passed by the ld CIT was quashed by the Hon'ble ITAT, Kolkata Bench, Kolkata vide ITA No. 241/KOL/2015 dated 19/04/2016. The copy of order is enclosed herewith. f] The information available on record and provided by ld AO itself established that the intension of assessee company was earn brokerage income on alleged sale and purchase of transaction of property. Further the department had not any material or evidence contrary to same. The income from brokerage from alleged transaction had been disclosed in P&L account which was dully accepted and as such the income arising from alleged transaction had been treated as genuine as how the receipts of such transaction as undisclosed income of assessee. On the identical facts the Hon'ble Rajasthan High Court in the case of CIT v/s Consulting Engineering Group Ltd. reported in 369 ITR 284 held that when the contract work allotted to sub contractor on commission basis and the ld AO found such transaction are not real transaction the ld AO should have made addition in respect of commission earned on such transaction not entire transaction as undisclosed income of the assessee. g] That in the 2011-12, the department had accepted the brokerage income on alleged transaction and the facts narrated in affidavit filed by director of assessee remained uncontroverted and as such the principle of consistency required that the view taken by the Department in the preceding years should not be disturbed as held in following case:- i. Arihant Builders v/s. ITAT (2005) 277 ITR 239 (MP) ii. ACIT v/s. Gendala Hazarilal& Co. (2003) 263 ITR 679 (MP) iii. CIT v/s. Neo Poly Pack Pvt. Ltd. (2000) 245 ITR 492 (Delhi) iv. Dhansiram Agarwalia v/s. CIT (1996) 217 ITR 4 (Gau) 13 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 v. CIT v/s. Shiv Sagar Estate (2002) 257 ITR 59 (SC) vi. UOI v/s. SatishPannalal Shah (2001) 249 ITR 221 (SC) vii. CIT v/s. Paul Brothers (1995) 216 ITR 548 (Bom. - Nag.) Looking to nature of business and accepted past record we are requested before Hon’ble Bench, the addition so made by ld AO and sustained by ld CIT(A) may kindly be deleted and accept the income as declared and oblige. 3] As regards ground of appeal No. 3 of assessee's appeal relating to addition of Rs 2,00,000/- in respect of cash deposit in the bank account. That the cash deposit in the bank account out of business receipts and as such while estimating the income from the business the addition made by the ld AO and sustained by CIT(A) is not justifiable and same may kindly be deleted. 7. Per contra Ld. DR vehemently argued supporting the orders of ld. CIT(A) where the additions made by the ld. AO have been confirmed and for the remaining supported the order of the Ld. AO stating that assessee did not supply requisite information before the lower authorities. 8. We have heard rival contentions and perused the records placed before us and carefully gone through decisions referred and relied by the ld. counsel for the assessee. 9. Apropos to the first issue raised towards estimation of net profit from the business carried on by the assessee,we note that the audited financial statements were available before the Ld. AO but without disputing the sales turnover during the year he disallowed the total expenses including the purchase of material towards contract work under taken by the assessee during the year. When the matter travelled before the ld. CIT(A) he observed in the impugned order that 14 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 the net profit rate for A.Y. 2009-10 to 2011-12 disclosed by the assessee in its regular audited books of account is 0.22%, 0.17% and 0.25%. Even during the course of scrutiny proceeding for A.Y. 2009- 10 to 2011-12 net profit rate applied by the Ld. AO was 0.16%, 0.93% & 0.18%. Though the Ld. CIT(A) appreciated the fact that undisputed revenue just could not have come without incurring an expenditure,but based on his observation that the purchase made by the assessee in the past were in dispute and genuineness of the same had not been proved, Ld. CIT(A) computed the net profit applying the rate of 8% on the total revenue for the year of Rs.87.46 Cr. 9.1Now the revenue has challenged the relief given by the Ld. CIT(A) and the assessee is agitating for the higher net profit rate applied by the ld. CIT(A) ignoring past net profit track of the assessee. 9.2 Beforeus the ld. counsel for the assessee stated that in one of the sister concern M/s B.B.C. Project Services Pvt. Ltd. This Tribunal vide its order dated 30.11.2018 in ITANo.1669/Kol/2016 for A.Y. 2009- 10,has adjudicated very same issue of estimation of net profit on the total turnover of Rs.48.47 cr. and after considering the submission of both sides this tribunal held as follows: 15 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 2. The Revenue raises two substantive grounds in its instant appeal. Its former grievance pleads that CIT(A) has erred in estimating assessee's income @ 0.4% of the. total turnover of Rs. 48,47,08,894/- without appreciating the relevant facts. It then seeks to revive sec. 40(a)(ia) disallowance of Rs. 6,64,83,650/- made by the Assessing Officer on account of non-deduction of TDS and reversed in lower appellate proceedings. 3. We find in this backdrop of pleadings that CIT (A)’s order qua the instant twin issue(s) reads as follows:- "5 I have considered the submissions of the AR of the appellant and have also gone through the assessment order on the issue at hand. I find that facts emerging from records reveal that the appellant submitted primary documents in support of return already filed i.e. copy of return (lTR-6), Audited Accounts, Tax Audit Report u/s 44AB, Computation of Income etc. on 02.11.2012. Perusal of audit report i.e. Form 3CD reveals that the company maintained books of account as detailed against item 9(a) & (b). It also appears that Tax Audit Report has been submitted by Auditor after due examination of all the books of account as specified therein. 5.3 I find from the particulars available at Schedule 12 that Rs. 6,64,83,650/- was debited in the P&L A/c as incentive to agents. The payment of incentives to agents cannot be equated as commission payments by any means. Hence, the provision of Section -194H have no .applicability for such payments and consequently, the question of disallowance u/s 40(a)(ia) does not arise. I further find that the appellant has not complied before the AO. The appellant has not even produced complete books of account before me and I find from the record that there has been repeated non-compliance by the appellant before the AO. Therefore the books of account are liable to be rejected. However, I also agree with the logistic contention of the AR that 16 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 disallowance of entire incentive to agents amounting to Rs.6,64,83,650/- would only result in an absurd net profit rate of 13.90% in this particular line of business in which the appellant company is engaged in. Considering the facts and circumstances of the case as well as the normal profit rends in this line of business, I am of the view that book profit declared is liable to be rejected. The income of the company may be estimated keeping in view materials available on record. In this regard, I have already decided the appellant's appeal for the A Ys 2001- 11 & 2011-12 by adopting the theory of estimation. Following the same principle, total income is estimated @ 0.4% of total turnover of Rs. 48,47,08,894/- which works to Rs. 19,38,835/-. The AO is directed accordingly. The appellant get a relief of Rs. '6,54,70,185/- (6, 74,09,020 - 19,38,835)”' 4. Learned CIT-DR vehemently contends during the course of hearing that CIT(A) has erred in law as well as on facts in estimating assessee's income @ 0.4% of its total turnover. He fails to dispute the fact the CIT(A) has gone by his findings in earlier assessment years thereby adopting the judicial consistency. The said estimation in earlier assessment years has admittedly attained finality. There is no other material to dispute correctness thereof failed during the course of hearing. We therefore find no fault in CIT(A)’s action estimating the assessee's income @ 0.4% of its turnover. 5. The Revenue's latter substantive ground seeking to revive u/s 40(a)(ia) (supra) that has no legs to stand since the relevant books forming foundation thereof already stand rejected. The Revenue fails in its both substantive grounds accordingly. 9.3. From perusal of the above finding of this tribunal we find that the net profit rate of 0.4% has been accepted by this Tribunal in one 17 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 of the sister concern of the assessee. We also find that the net profit declared by the assessee for A.Y. 2009-10 to 2011-12 was within the range of 0.2 % to 0.29& and even in the scrutiny proceedings the revenue authorities in assessee’s own case have estimated net profit below the rate of 1% so by no means estimating the net profit @ 8% could be justified,looking to the fact that there is no change of business during all these years, books of account are duly audited, no specific error has been pointed out by both lower authorities. 9.4. One more important fact which is relevant in the instant appeal is that subsequent to the assessment proceeding search and seizure operation was carried out at Bathwal Group on 27.04.2017 and subsequent to search notice u/s 153C of the Act were issued to the assessee company also and the assessments were framed u/s 143(3) of the Act for A.Y. 2012-13 to 2014-15 on 27.12.2019 assessing the income only to the extent of additions confirmed by the ld. CIT(A). In other words the grounds raised by the revenue will have no merit in these cases because revenue authorities have themselves accepted the income determined by the Ld. CIT(A) givingpart relief given in the grounds raised by the assessee. Certainly another fact which cannot be ignored is that there was a complete non-compliance on the part of 18 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 the assessee, thereby, not allowing the Ld. AO to examine the documents of sales, purchase and expenditure thoroughly. 9.5. We, therefore, under the given facts and circumstances of the case, respectfully following the decision of this Tribunal in the case of M/s B.B.C. Project Services Pvt. Ltd (supra) consistent business of contract work carried out by the assessee and the net profit rate offered in the financial statements and being fair to both the parties are of the view that application of net profit rate of 0.6% on the turnover of contract business during the year i.e. Rs.87.46 Cr. will meet the end to justice. We accordingly order so and direct the revenue to compute the net profit for the year @ 0.6%. We further make it clear that this net profit rate of 0.6% will take care of all the business expenses including interest and depreciation incurred for the purpose of running contract business and related to the turnover of Rs.87.46 cr. Accordingly assessee will get part relief on this common issue and revenue fails to succeed. Ground No.1 of the assessee’s appeal for A.Y. 2012-13 is partly allowed& Ground no.1,2& 3 of the Revenue’s appeal for A.Y. 2012-13 stands dismissed. 10. Apropos to ground no.2 raised by the assessee relating to addition for sale of immovable property amounting to Rs.2,81,70,890/- we 19 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 notice that the basis of this addition is the information about the sale of immovable property in the name of assessee carried out during the year and this information was received from Sub-Registrar office. Ld. AO had no occasion to examine the details of this transaction since no such information was supplied. However, when the matter was carried before the Ld. CIT(A), various details were filed and even in the body of impugned order Ld. CIT(A) has observed that they were not one but many transactions of sale of immovable property which happened during the year. Still Ld. CIT(A) did not made any efforts to examine those transactions and proceeded just to confirm the addition made by the ld. AO. 10.1 We, however on perusal of the submissions made by the assessee as well as the copy of deed of conveyance, Memorandum of Understanding (in short MoU) and Board Resolution in respect of purchase of land for M/s Siddhi Vinayak Cement Ltd. find that the assessee company is also dealing in sale and purchase of properties on commission basis and had also shown income from brokerage in the books of account. 10.2 We notice there was MoU between assessee and third party for purchase of industrial land situated at Pali in December 2009. As per MoU the assessee had collected the industrial land for third party and 20 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 after conversation of agricultural land to industrial land through respective land holder the documents was registered through conveyance deed in favour of him and immediately thereafter transferred to third party. The transaction in respect of purchase, expenses & sales are recorded in the books of accounts and whatsoever profit earned by the assessee on such transaction was disclosed in the audited financial statement. 10.3 We also notice that the assessee company had not made any investment in purchase of such land for its own purpose and in this regard the assessee company had furnished the affidavit and other relevant documentary evidences before the ld AO during the assessment proceeding for A.Y. 2011-12. The ld AO while passing the assessment order for A.Y. 2011-12 considered the facts and evidences available on record and treated such business transaction as genuine and accordingly same was accepted. Subsequently the proceeding u/s 263 was initiated by the PCIT which were quashed by this Tribunal and the appeal filed by revenue before Hon'ble High Court stood dismissed. 10.4 Further the copy of conveyance deed in respect of sale of property is attached in the paper book in which complete details of 21 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 MoU etc. are mentioned. The relevant para of such conveyance deed reads as under:- "2. By an Memorandum of Understanding dated 31st of December 2009 the party of the first part vendor herein had agreed to work as a land consolidator for the party of other part purchaser and in concurrence of the said MoU dated 31/12/2009, the party of the first part had purchased the above said land in its name vide sale deed dated 22/09/2011, duly registered before sub-registrar Jaitaran, in his Book No I, volume No. 131, at serial No. 2011003119, on page 58, On date 22/09/2011. And an additional copy of the same was pasted in additional book no. 1 at volume No. 516 at pages 93 to 105. Whereas the said land was purchased by the vendor herein from the erstwhile khatedar Shri Jivabhai S/o Shri Karsanbhai, vide the above sale deed dated 22/09/2011. The erstwhile had got the said land converted for Industrial use the order of S.D.O. Jaitaran dated 21/07/2011, bearing reference number F8/SP/RAJASVA/2011/1059. Therefore the said land is competent for being used for Industrial purposes." 10.5 We also note that during the year under consideration the assessee had shown such transaction in audited financial statement under the head other income of business and similarly had also claimed expenditure under business head and financial statements are already on record in the paper book. One of the copy of the conveyance deed executed by the appellant along with MoU& Board Resolution is at page 29 to 35 of the paper book. 10.6. On perusal of same we observe that on behalf of the purchaser the assessee companies enters into an agreement with sellers and thereafter transfer the property in the name of the purchaser. This business of earning commission from purchase and sale of land is 22 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 being consistently carried out by the assessee in the previous year also and same are regularly entered in the books of account. Even for A.Y. 2011-12 the department had accepted the brokerage income on alleged transaction and the facts narrated in affidavit filed by the Director of the assessee remained uncontroverted. When the assessee is carrying out similar type of business transaction every year and is also being assessed under the scrutiny assessment by revenue authorities, the principle of consistency ought to be applied and the view taken by the department in the preceding years should not be disturbed as held in following cases: i. Arihant Builders v/s. ITAT (2005) 277 ITR 239 (MP) ii. ACIT v/s. Gendala Hazarilal& Co. (2003) 263 ITR 679 (MP) iii. CIT v/s. Shiv Sagar Estate (2002) 257 ITR 59 (SC) iv. UOI v/s. Satish Pannalal Shah (2001) 249 ITR 221 (SC) 10.7 We therefore under these given facts and circumstances and the documents placed before us, find merit in the contentions of Ld. counsel for the assessee that the alleged amount of sale consideration of Rs. 2,81,70,890/- is just one of the many transactions of sale of property executed by the assessee on behalf of the purchaser and the income earned by the assessee from such transactions of purchase/sale carried out in past as well as in the year under appeal have been routed through its books of account and the commission 23 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 income earned from such transactions have been duly disclosed in the financial statements and offered to tax. We, therefore, set aside the finding of ld. CIT(A) and delete the addition of Rs.2,81,70,890/- made by the Ld. AO. Thus, ground no.2 raised by the assessee is allowed. 11. Apropos to ground no.3 which relates to the addition for unexplained cash deposit of Rs.2,00,000/- we find that this addition was made by the Ld. AO merely for lack of information. The basis of this addition was only an information that cash of Rs.2,00,000/- was deposited in bank account of assessee maintained with the HDFC Bank Ltd. Ld. AO has also given a general finding confirming the addition. Finding of Ld. AO was confirmed by the ld. CIT(A). 11.1 Before us also Ld. counsel for the assessee has made general submissions that this cash deposited in the bank are out of the business receipts but no such evidence in the form of extract of the cash book of the relevant date has been filed so as to make possible for us examine this fact that whether the assessee had sufficient cash in hands in the books as on the date of deposit of the alleged amount with the HDFC Bank. In lack of necessary evidences, we find no merit in this ground raised by the assessee. Thus, ground no.3 of the 24 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 assessee’s appeal is dismissed. Ground no.4 is general in nature which needs no adjudication. 12. As a result, appeal of the assessee for A.Y. 2012-13 is partly allowed and the revenue’s appeal for A.Y. 2012-13 stands dismissed as per terms indicated above. Now we take up assessee’s appeal for A.Y. 2013-14 wherein following grounds of appeal : 1. That on the facts and in the circumstances of the case, the order passed by Ld. CIT(A) u/s 250 of Income Tax Act, 1961 dated 09.08.2018 is bad and is liable to be quashed so far as arbitrary estimation of profit from operations is concerned. 2.That on the fact and in the circumstances of the case, the Ld. CIT(A) is wrong and unjustified in determining profit at Rs. 9,46,84,148/- being 8% of turnover without properly examining Books of accounts and assessee's submission made on 12.01.2018. 3.That on the facts and in the circumstances of the case, Ld. CIT (A) is wrong and unjustified in determining profit @ 8% on turnover which is quite high, absurd and unrealistic in a large business of civil construction. 4.That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing of the appeal. 13. From perusal of the above grounds we find that only issue relates to estimation of net profit on the contract business carried out by the assessee. We find that of the ld. AO while framing the assessment disallowed the difference opening and closing stock as well as gross 25 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 profit, disallowed the expenses and when the matter came up before the Ld. CIT(A) he estimated the profit from contractual business by applying @8% on the total business turnover. 14. Both the parties stated that the facts and issues remains the same as that for A.Y. 2012-13 except the change of figures. Since we have already adjudicated this issue in detail while dealing with the grounds raised for A.Y. 2012-13,we applying our decision mutatis mutandis direct the revenue authorities to estimate the net profit@ 0.6% on the business turnover of Rs.118.35 cr. disclosed by the assessee in its audited profit and loss account and this net profit rate of 0.6.% will take care of all the expenses incurred during the year on contract business including the financial cost and depreciation. Accordingly the finding of ld. CIT(A) is set aside and the ground no.1 to 3 raised by the assessee are partly allowed. Ground no.4 is general in nature which needs no adjudication. 15. As a result, appeal of the assessee for A.Y. 2013-14 is partly allowed. Now we take up Cross appeal for A.Y. 2014-15 The grounds of appeal of the assessee in ITANo. 534/Ind/2018 reads as under: 26 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 1. (a) That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in considering net profit @8% of the revenue from operations which works out to Rs.5,57,77,591/- on estimated basis. b. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred on confirming the action of assessing officer who has disallowed purchases without reducing the corresponding sales since there cannot be any sales without purchases. 2. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in holding that interest payable for delayed deposit of TDS liability is penal in nature and thereby confirming the disallowance made by the AO amounting to Rs.53,906/- u/s 37 of the Income Tax Act, 1961. 3. That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing of the appeal. The grounds of appeal of the Revenue in ITANo. 375/Ind/2018 reads as under: 1. The Ld.CIT(A) has erred in deleting the addition of Rs.62.01 cr. on account of "Advance from Customer" ignoring the fact that the assessee could not established the genuineness of M/s. Trishakti Power Pvt. Ltd. claimed to have been received Rs.62.01 cr. by the assessee in spite of opportunities given. 2. The Ld.CIT(A) erred in holding that the notice uls.133(6) was a general one and that the existence of a web page is enough evidence for certifying the genuineness of the company's existence and its transaction. 3. The Ld.CIT(A) erred in deleting the additions made on account of bogus purchase amounting to Rs.48.81 cr. and disallowances made on account of expenses amounting to Rs.11.88 cr. and substituting the income of the assessee with the estimated net profit @ 8% of revenue from operation by completely overlooking the fact that the AO had made such additions and disallowances after conducting a detailed enquiry &evidences brought on record and that the assessee could not establish the genuineness of such transactions in-spite sufficient opportunity being given to it during the course of assessment proceedings. 4. Since the purchase of the assessee remained unverifiable, the Ld. CIT(A) has erred in estimating net profit @8% of revenue from operation. 5. The appellant craves to add, delete or modify any of the grounds of appeal before or at the time of hearing. 16. From perusal of the above grounds we find that one common issue relates to estimation of net profit on the contract business. We find that the same has already been dealt by us in preceding paras 27 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 while dealing with the cross appeal for A.Y. 2012-13 and assessee’s appeal for A.Y. 2013-14. Looking to the consistency of business and no dispute at the end of both the parties about the facts and issues raised in this year vis-à-vis previous two years, we hold that the net profit from contract business to be computed @ 0.6% of the total business turnover of the assessee i.e. Rs.69.72 cr. and this net profit shall be deemed to have been earned after meeting all incident business expenses including financial cost and depreciation. Thus, ground no.1 & 2of the assesse’s appeal is partly allowed and Ground No.3 & 4 of Revenue’s appeal are dismissed. 17. Ground no.3 raised by the assessee confirming the disallowance made by the AO amounting to Rs.53,096/- u/s 37 of the Act is dismissed as not pressed. Ground no.4 is general in nature which needs no adjudication. 18. As a result appeal of the assessee is partly allowed. 19. As far as the revenue’s appeal for A.Y. 2014-15 is concerned we are left to deal with ground no.1. which relates to addition u/s 68 of the act at Rs.62.01 cr. deleted by Ld. CIT(A), which was made by the ld. AO on account of unexplained “Advance from Customers” received from M/s. Trishkti Power Pvt. Ltd. We note that the ld. AO 28 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 made addition u/s 68 of the Act for unexplained advance received during the year since identity and creditworthiness of the cash creditors and genuineness of the transactions was not proved. When the assessee challenged this addition of Rs.62.01 cr before the Ld. CIT(A) it was stated that this was an advance from customers against the contract work awarded to it and the same being adjusted in the subsequent year, showing it as the sales/turnover from contract business. Ld. CIT(A) deleted the impugned addition after observing that the identity of M/s. Trishkti Power Pvt. Ltd. is not in dispute since this company replied to the notice issued u/s 133(6) of the Act, complete details of the company and the projects undertaken by it are available on the website of this company. Ld. CIT(A) also held that the alleged cash creditors is having business transaction with the assessee is regard to contractual and engineering activities. 19.1 Before us Ld. counsel for the assessee submitted that the assessee had obtained the contract work from M/s Trishakti Power Private Limited through work order dated 04/10/2013. M/s Trishakti Power Private Limited had given advance of Rs 62,01,00,000/- through banking channel. The advances so received are duly recorded and also appear in audited financial statement, which is part of the paper book. (P.B. Page 13 to 20).Further out of total trade advances 29 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 of Rs.66,48,50,000/- the assessee company had also given advance of Rs 61,81,00,000/- to sub-contractor and remaining amount was shown as commission income in the subsequent year. The advances given to subcontractor are duly recorded and also appear in audited financial statements. (P.B. Page 1 to 12 & 21 to 28). That in the audited financial statement the assessee had shown above transaction as under:- Particulars 2013-14 2014-15 2015-16 Particulars 2013-14 2014-15 2015-16 Advance from customers 4,47,50,000 66,48,50,000 4,47,50,000 Advance given towards contracts 0 61,81,00,000 3,95,00,000 19.2 From the above, it is crystal clear that the advances as appearing in the audited financial statement in the name of M/s Trishakti Power Private Limited is a trade advances for execution of contract work. Further the payment so received as advance against execution of contract work from M/s Trishakti Power Private Ltd was transferred to sub-contractor. Subsequently the subcontractor had completed the work and accordingly the liabilities had been discharged which is verifiable from audited financial statements for A.Y. 2015-16. Here it is important to mention that the assessee company is only a conduit between work awarder and sub- contractor. 30 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 19.3 We also find that the transaction made with said party is through banking channel and also the said party is assessed to tax with the department. The PAN, complete details of such party is on record. The notice u/s 133(6) was issued by ld AO to the said party during the assessment proceedings and in response to same, the alleged party had also responded to ld AO. The said company had only sought some time to submit the reply, and had not denied the transaction with the appellant. 19.4 We also find that the ld CIT(A) while deciding the appeal had considered the documentary evidences available on record and audited financial statement and reached to the conclusion and deleted the additions made by the ld AO, after making an independent verification in order to reach to the conclusion that the business transaction is genuine. The income on this contract forms part of the income in subsequent year. 19.5 We also find that on one hand the ld AO has taxed the commission income earned on alleged transaction and on the other hand he has also made the addition u/s 68 in respect of advance received from the party who has awarded the contract work. The Hon'ble Supreme Court in the case of CIT vs Devi Prasad Vishwnath Prasad (1969) 72ITR194 (SC) has held that "It is for the assessee to 31 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 prove that even if the cash credit represents income, it is income from a source, which has already been taxed". The assessee has already offered the sales for taxation hence the onus has been discharged by it and the same income cannot be taxed again. Reliance is also placed on the decision of Hon'ble Supreme Court in the case of CIT vsDurga Prasad More (1969) 72 ITR 807 (SC) in which it was held "If the amount represented the income of the assessee of the previous year, it was liable to be included in the total income and an enquiry whether for the purpose of bringing the amount to tax it was from a business activity or from some other source was not relevant". 19.6 We also note that the alleged sum appears in the balance sheet as advance from customers. Work order dated 4 th October 2013 issued by M/s Trishakti Power P. Ltd. in favour of the assessee is placed on record which defines scope of work, consideration security deposit, etc. and confirmation of account is also placed at page 19 which shows that advance of Rs.62.01 cr. have been received through banking channel. Further the customers namely M/s Trishakti Power P. Ltd has also certified to have given the advance to the company. In the subsequent financial year i.e. F.Y. 2014-15 the advance given towards contract work from M/s Trishakti Power P. Ltd has been adjusted in gross turnover for F.Y. 2014-15. It is also an undisputed 32 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 fact that the assessee after receiving advance from M/s Trishakti Power P. Ltd gave the sum to the sub-contractor for doing the work and genuineness of such payment has not been disputed by the Ld. AO. 19.7 We, therefore, under the given facts and circumstances and after going through of details and documentary evidences, are satisfied that the alleged sum of Rs. 62.01 cr. is a duly unexplained advance from customers namely M/s Trishakti Power P. Ltd received by the assessee as part of regular business transaction for the purpose of completing a contract (duly documented by a work order ) and the assessee has duly shown the revenue from this contract in the succeeding financial year. Thus, Ld. AO erred in making addition for unexplained cash credit u/s 68 of the Act for the alleged sum of Rs.62.01 cr. received from M/s Trishakti Power P. Ltd. We, therefore find no reason to interfere in the finding of Ld. CIT(A) deleting the impugned addition. Ground No.1 raised by the revenue stands dismissed. Ground No.5 is general in nature which needs no adjudication. 20. In result, appeal of the revenue for A.Y. 2014-15 is dismissed. 33 ITA Nos. 374,375,533,534&2116/Kol/2018 Bridge & Building Construction Co. P. Ltd. AYs: 2012-13 to 2014-15 21. In the result, Appeals of the assessee in ITA Nos.533, 534 & 2116/Kol/2018 are partly allowed and appeals of the Revenue in ITA Nos.374 & 375/Kol/2018 are dismissed. Order is pronounced in the open court on 23 rd December, 2021. Sd/- Sd/- (A. T. Varkey) (Manish Borad) Judicial Member Accountant Member Dated: 23.12.2021 Patel, PS Copy of the order forwarded to: 1 Appellant – Bridge & Building Construction Co. Pvt. Ltd., 90B, Shyama Prasad Mukherjee Road, Kolkata-7000026 2 Respondent – i) DCIT, Circle-10(1), Kolkata ii) DCIT, Central Circle-2(1), Kolkata iii) ACIT, Central Circle-2(1), Kolkata iv) ITO, Ward-10(1), Kolkata 3 CIT(A) – 20, Kolkata (sent through e-mail) 4 CIT – Kolkata 5 DR, Kolkata Benches, Kolkata. (sent through e-mail) True Copy By Order Assistant Registrar/DDO ITAT, Kolkata Benches, Kolkata