ACIT, Kota V. SHRI ASHOK JAIN, Kota

ITA 414/JPR/2012

• Counselvise Citation: 41423114 RSA 2012
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: FAJLUR RAHMAN LQU
• Keywords: Rejection of books of accounts; Presumptive income; Depreciation; Retrospective amendment; Question of law; Non compliance
• Section: 44AD

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 414/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 THE A.C.I.T. CIRCLE-2, KOTA CUKE VS. SHRI ASHOK JAIN, 3-D-33, MAHAVEER NAGAR-IIIRD, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ADFPJ 2090 R VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 344/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 SHRI ASHOK JAIN, 3-D-33, MAHAVEER NAGAR-IIIRD, KOTA. CUKE VS. THE ADDL.C.I.T. RANGE-2, KOTA LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ADFPJ 2090 R VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI AJAY MALIK (ADDL.CIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MAHENDRA GARGIEYA & SHRI FAJLUR RAHMAN (ADVOCATE) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 24/11/2014 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 13/02/2015 ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 2 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THESE ARE CROSS APPEALS, ONE BY THE REVENUE AND ANO THER BY THE ASSESSEE AGAINST THE ORDER DATED 29/02/2012 BY THE LEARNED CIT(A), KOTA FOR A.Y. 2008-09. RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER: DEPARTMENTAL APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A), KOTA HAS ERRED IN:- I) APPLYING NET PROFIT RATE OF 12% INSPITE OF THE F ACT THAT THE A.O. HAS MADE DISALLOWANCE OUT OF THE EXPENSES CLAIM ED IN P&L ACCOUNT AND LEARNED CIT(A) HELD THAT DISCREPANC IES MENTIONED BY A.O. WITH RETROSPECTIVE EFFECT CORRECT FOR MAKING DISALLOWANCE; II) THE APPELLANT CRAVES LIBERTY TO RAISE ADDITIONA L GROUND AND TO MODIFY/AMEND THE GROUND OF APPEAL AT THE TIME OF HEARING. ASSESSEES APPEAL IN ITA NO. 344/JP/2012 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LEARNED ASSESSING OFFICER HAS ERRED IN DISALLOWING 2 0% OF THE TOTAL EXPENDITURE OF RS. 70,97,212/- INCURRED O N MATERIAL PURCHASED, 20% OF THE TOTAL EXPENDITURE OF RS. 31,15,522/- INCURRED ON DIESEL PURCHASE, 20% OF THE TOTAL EXPENDITURE OF RS. 40,48,354/- INCURRED ON MACHINER Y, JCB, TRUCK & TRACTOR, 10% OF THE TOTAL EXPENDITURE OF RS. 7,84,374/- INCURRED ON BLASTING AND BORE WELL EXPENS ES AND 10% OF TOTAL EXPENDITURE OF RS. 19,37,702/- INCURRE D ON LABOUR PAYMENT AND FURTHER ERRED IN ADDING RS. 27,1 9,588/- TO THE TOTAL INCOME OF THE APPELLANT. THE HONBLE CI T ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 3 (APPEALS) HAS FURTHER ERRED IN APPLYING NET PROFIT RATE 12% AND ASSESSING THE NET TAXABLE PROFIT AT RS. 24,90,8 04/- AS AGAINST RS. 12,49,467/- DECLARED BY THE APPELLANT O N THE GROSS CONTRACT RECEIPT OF RS. 2,07,56,706/-. 2. THE APPELLANT CRAVES LIBERTY TO RAISE ADDITIONAL GROUND AND TO MODIFY/AMEND THE GROUND OF APPEAL AT THE TIME OF HEARING. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WOR KS AS A CIVIL CONTRACTOR. DURING THE COURSE OF ASSESSMENT PROCEED IMGS, LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DELIBE RATELY WENT ON SEEKING ADJOURNMENTS AND DID NOT PRODUCE RELEVANT E VIDENCE. VARIOUS QUERIES RAISED BY THE ASSESSING OFFICER REMAINED UN COMPLIED WITH. THE ASSESSING OFFICER HAS MADE DETAILED OBSERVATIONS IN THIS BEHALF WITH FURTHER OBSERVATIONS THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUPPORT THE CLAIMS OF EXPENDITURE MADE IN HIS INFORMATION CONTA INED IN THE RETURN WAS FOUND TO BE UNCORROBORATED AND WRONG. LOOKING AT THE INCONSISTENCIES, NON-COOPERATION AND RECALCITRANT A TTITUDE OF THE ASSESSEE, FOLLOWING ADDITIONS WERE MADE:- 1. DISALLOWANCE OF MATERIAL PURCHASED RS. 1419442/ - 2. DISALLOWANCE OF DIESEL PURCHASED RS. 623104/- 3. DISALLOWANCE OF MACHINERY & JCB, TRUCK AND TRACTOR EXPENSES RS. 404835/- 4. DISALLOWANCE OF BLASTING & BORE WELL EXPENSES RS. 78437/- 5. DISALLOWANCE OF LABOUR EXPENSES RS. 193770/- ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 4 3. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL B EFORE THE LEARNED CIT(A), BUT DID NOT RAISE ANY GROUND TO COUNTER THE OBSERVATIONS OF ASSESSING OFFICER THAT THE ASSESSEE DID NOT PRODUCE PROPER INFORMATION AND RENDER COOPERATION IN THE ASSESSMENT PROCEEDING S, ONLY RESPECTIVE ADDITIONS WERE CHALLENGED BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) GAVE PART RELIEF BY FOLLOWING OBSERVATIONS:- IN THIS CASE, DURING THE COURSE OF HEARING IT WAS FOUND THAT PURCHASES TO THE TUNE OF RS. 44,65,509/- WERE T HROUGH BOGUS BILLS. IT WAS ALSO FOUND THAT ASSESSEE HAS PURCHASED DIESE L OF RS. 31,15,522/- IN CASH. HOWEVER, THE ASSESSEE DID NOT P RODUCE LOG BOOK OR RECORD OF USE OF DIESEL AND BILLS AND VOUCH ERS. IT WAS ALSO FOUND THAT THE ASSESSEE HAS INCURRED HI RING CHARGES OF RS. 9,38,450/- FOR MACHINERY AND RS. 31, 09,904/- FOR HIRING JCB, TRUCK AND TRACTOR. HOWEVER, THE ADDRESSE S OF THE RECIPIENTS WERE NOT FURNISHED. IT IS ALSO FOUND THAT ASSESSEE HAS INCURRED BLASTI NG EXPENSES OF RS. 4,40,674/- AND BOREWELL EXPENSES OF RS. 3,43,700/-. HOWEVER, COMPLETE ADDRESS OF THE RECIPI ENTS WERE NOT GIVEN. IT IS ALSO FOUND THAT ASSESSEE HAS INCURRED LABOUR EXPENSES OF RS. 19,37,702/-. VARIOUS DISCREPANCIES WERE NOTIC ED IN RELATION TO THESE PAYMENTS ALSO. THE A.O. DISALLOWED A SUM OF RS. 14,19,442/- OUT OF PURCHASE EXPENSES, RS. 6,23,104/- OUT OF DIESEL EXP ENSES, RS. ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 5 4,04,835/- OUT OF HIRING CHARGES, RS. 78,437/- OUT OF BLASTING AND BOREWELL EXPENSES AND RS. 1,93,770/- OUT OF LABOUR E XPENSES, TOTALING TO RS. 27,19,587/-. BEFORE ME ALSO NO DETAILS TO CHALLENGE THE FINDING S GIVEN BY A.O. WERE FURNISHED. ACCORDINGLY, THE DISCREPANCIES MENTIONED BY A.O. WERE FOUND TO BE CORRECT. THE ASSESSEE IS A CONTRACTOR DOING THE WORK FOR GOVT . DEPARTMENTS. DURING THE YEAR, THE TURNOVER OF ASSES SEE WAS RS. 2,07,56,706/- AND THE ASSESSEE HAS SHOWN A PROFIT OF RS. 12,49,467/-. AFTER ADDING THE DISALLOWANCE BY A.O., THE PROFIT FROM THE BUSINESS COMES TO RS. 39,69,054/-. THIS GI VES N.P. RATE OF 19.12%. I HAVE ALREADY HELD THAT THE DISCREPANCIES MENTION ED BY A.O. WERE FOUND TO BE CORRECT. HOWEVER, AFTER TOTALI NG THE DISALLOWANCE, THE NET PROFIT OF THE ASSESSEE COMES T O 19.12% WHICH APPEARS TO BE ON HIGHER SIDE. IN MY OPINION, ONCE THESE DISCREPANCIES WERE FOUND THE A.O. SHOULD HAVE REJECTED THE BOOKS OF ACCOUNTS AND SHOULD HAVE ESTIMATED THE NET PROFIT OF THE ASSESSEE. IN VIEW OF THE ABOVE, IT WOULD BE FAIR AND REASONABL E TO ESTIMATE THE INCOME OF ASSESSEE. CONSIDERING THAT A SSESSEE WAS INVOLVED IN LARGE SCALE MANIPULATION OF ACCOUNTS AN D THAT THE ASSESSEE HAS SUBMITTED BOGUS BILLS TO THE TUNE OF R S. 44,65,509/-, I AM OF THE OPINION THAT A HIGHER RATE OF NET PROFIT SHOULD BE APPLIED IN THE CASE OF THE ASSESSEE. ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 6 ACCORDINGLY, A NET PROFIT RATE OF 12% IS CONSIDERE D REASONABLE IN THIS CASE. THIS GIVES A NET PROFIT OF RS. 24,90,804/- AS AGAINST RS. 12,49,467/- DECLARED BY ASSESSEE. ACCORDINGLY, ADDITION OF RS. 12,41,337/- IS CONFIR MED. THE A.O. IS DIRECTED TO DELETE THE BALANCE ADDITION OF RS. 14,78,250/-. THESE GROUNDS OF APPEAL ARE THEREFORE PARTLY ALLOWE D. 4. AGGRIEVED, BOTH THE PARTIES ARE BEFORE US ON THE IR RESPECTIVE GRIEVANCES. 5. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT: I. THERE IS NO JUSTIFICATION IN MAKING SUCH HUGE ES TIMATED DISALLOWANCE BY THE ASSESSING OFFICER, WHO HAS NOT P ROVIDED ANY BASIS OF MAKING AD HOC DISALLOWANCES. II. THE LEARNED CIT(A) ALSO HELD THAT IN THE LIGHT O F ADVERSE OBSERVATIONS, THE ASSESSEES BOOKS OF ACCOUNT SHOUL D HAVE BEEN REJECTED AND THEREFORE ESTIMATED THE NET PROFIT @ 12 %, THE SAME IS ARBITRARY AND HARSH. APROPOS MERITS, FOLLOWING IS SUBMITTED:- (A) MATERIAL PURCHASES EXPENSES: - THE LEARNED ASSE SSING OFFICER DISALLOWED 20% OF THE TOTAL EXPENDITURE OBSERVING TH AT CEMENT MIGHT HAVE BEEN PURCHASED FROM SOME OTHER PARTIES AND THI S TECHNIQUE WAS USED TO REDUCE THE PROFIT OF THE FIRM. IT ASSUMES T HAT ASSESSEE ACTUALLY PURCHASED THE CLAIMED QUANTITY OF CEMENT BAGS ALBEI T FROM OTHER ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 7 PARTIES, EVEN THEN IT BECOMES ALLOWABLE EXPENDITURE, DISALLOWANCE OF ON 20% AD HOC BASIS IS ARBITRARY. (B) DIESEL EXPENSES:- THE ASSESSEE PURCHASED PETROL AND DIESEL FROM ONE M/S AGARWAL FILLING STATION, BUNDI. COPIES OF BILLS AND VOUCHERS WERE PRODUCED ALONGWITH LEDGER COPIES. THE AS SESSEE HAD NO BANK ACCOUNT AT BUNDI, THEREFORE, CASH PAYMENT ABOV E RS. 20,000/- AMOUNTING TO RS. 623104/- HAS BEEN DISALLOWED BY THE ASSESSING OFFICER WITHOUT PROPER JUSTIFICATION AND APPLYING TH E RULE 6DD OF THE INCOME TAX RULES, 1962. (C) MACHINERY, JCB TRUCK AND TRACTOR RENT: - THE ASSE SSEE PROVIDED COMPLETE ADDRESSES OF THE PAYEES, OWNERS OF SUCH EARTH MOVING MACHINERY THEY ARE RESIDING IN VILLAGES WHERE NO HOUSE NUMBER IS ALLOTTED. BECAUSE ASSESSEE DID NOT PROVIDE NAME OF THE FATHER OF THE OWNER, 10% AD HOC DISALLOWANCES HAS BEEN UNJUSTIFIABL Y MADE. (D) BLASTING AND BORE WELL EXPENSES:- 10% OF THE EXP ENDITURE HAS BEEN DISALLOWED BY THE ASSESSING OFFICER AGAIN ON TH E SAME FOOTING ABOUT THE ADDRESSES OF THE RECIPIENTS BEING NON-VER IFIABLE. (E) LABOUR PAYMENT EXPENSES:- THE ASSESSEE PROVIDE D COPY OF LEDGER ACCOUNT AND MUSTER ROLL AND GAVE COMPLETE AD DRESSES OF THE LABOURERS. AS AGAINST TOTAL CONTRACT RECEIPTS OF MO RE THAN 2 CRORES, THE ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 8 TOTAL LABOUR PAYMENT OF RS. 193770/- WERE JUSTIFIED. 10% AD HOC DISALLOWANCE WAS UNJUSTIFIABLY MADE BY THE ASSESSING OFFICER. 5.1 IT IS FURTHER CONTENDED THAT LEARNED CIT(A), HOWE VER, HELD THAT LOOKING AT THE DISCREPANCIES, THE ASSESSING OFFICER SHOULD HAVE REJECTED THE BOOKS AND ESTIMATED THE NET PROFIT OF THE ASSES SEE @ 12%. THE FINDINGS OF LD. CIT(A) ARE AGAIN ARBITRARY, UNJUSTI FIED; IT HAS BEEN HELD BY VARIOUS JUDICIAL PRECEDENTS THAT IN CASE OF REJE CTION OF BOOKS, THE ASSESSEES EARLIER YEARS N.P. ARE AVERAGE THEREOF, MAY BE ADOPTED. RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS:- (I) INDWELL CONSTRUCTION VS. CIT (1999) 151 CTR (AP) 207 : (1998) 232 ITR 776 (AP) (DPB 5-7). (II) BANWALIRALA BANSHIDHAR (1998) 148 CTR (ALL) 533 : (1998) 229 ITR 229 (ALL) (III) CIT VS. G.K. CONTRACTOR (2009) 19 DTR 305 (RA J) (DPB 12- 14). (IV) ACIT VS. SMT. RENU MUKERJEE (2008) 15 DTR (DEL) (TRIB) 205 (DPB 15-25). (V) EASTERN CONSTRUCTION COMPANY VS. ITO (1997) 59 TTJ (DEL) 723 (DPB 26-36). EVEN WHEN THE ASSESSEES BOOKS OF ACCOUNT ARE REJECT ED, THE CONSEQUENT BEST JUDGMENT ASSESSMENT HAS TO BE REASO NABLE AND NOT ARBITRARY. RELIANCE IS PLACED ON THE DECISION IN T HE CASE OF CIT VS. GOTAN LIME KHANIZ UDYOG 256 ITR 243 (RAJ) HOLDING TH AT MERE REJECTION OF BOOKS OF ACCOUNT NEED NOT NECESSARILY LEAD TO AD DITIONS TO THE ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 9 RETURNED INCOME. AS COMPARED TO EARLIER YEARS, THER E IS ONLY MINOR FALL OF 0.48%, WHICH IS ATTRIBUTABLE TO STEEP INCREASE IN TURNOVER. IN ORDER TO ACHIEVE HIGHER T O ASSESSEE HAD TO APPOINT NEW AND INEXPERIENCED STAFF IN A TOUGH COMPETITIVE MARKET, THEREFORE, THE MARGINAL REDUCTION IN NP IS JUSTIFIED. 5.2 EVEN IN CASE OF PRESUMPTIVE TAXATION ON CONTRA CTORS, N.P. RATE OF 8% IS PRESCRIBED BY THE LAW U/S 44AD OF THE INCOME TAX ACT, 1961. ALTERNATIVELY IT IS PLEADED THAT EVEN IF CONTRACTOR S NP IS ESTIMATED DEDUCTION OF INTEREST OF RS. 42403/- AND DEPRECATIO N OF RS. 26641/- IS TO BE SEPARATELY ALLOWABLE RELYING ON THE FOLLOWING CASE LAWS:- (I) CIT VS. JAIN CONSTRUCTION CO. AND OTHERS (1999) 156 CTR (RAJ.) 290. (II) RIKHABDAS JAIN CONTRACTOR VS. ITO (2001) 72 TTJ (JD) 526. (III) TEJA CONSTRUCTION VS. ACIT (2010) 129 TTJ 57 ( HYD) (UO). (IV) ITO VS. SHRI RAM TRADERS (2013) 90 DTR 217 (JD ) (V) BHARAT CONSTRUCTION CO. VS. CIT (2002) 258 ITR 1 40 (RAJ). 6. THE LEARNED D.R. ON THE OTHER HAND, CONTENDS THAT THE ASSESSEES NON-COOPERATION, NON SUBMISSION OF DOCUMENTS AND RE LEVANT INFORMATION WAS DELIBERATE AND PALPABLE. THE FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE WAS NON-COOPERATIVE AND DI D NOT PRODUCE RELEVANT INFORMATION HAS NEITHER BEEN CHALLENGED BE FORE THE CIT(A) NOR BEFORE THE HONBLE ITAT, THUS, THE ASSESSEES DUBIOU S ROLE EMERGES ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 10 FROM THE RECORD. THE LEARNED CIT(A) OUGHT TO HAVE AP PRECIATED THAT ASSESSING OFFICER GAVE SEVERAL CHANCES TO ASSESSEE TO PRODUCE THE RELEVANT INFORMATION, WHICH WAS NOT PROVIDED. IF THE ASSESSEE IS NOT FORTHCOMING WITH THE RELEVANT INFORMATION ASSESSING OFFICER HAD NO CHOICE BUT TO ADOPT ONE OF THE REASONABLE WAYS TO FR AME THE ASSESSMENT ON ESTIMATE, DISALLOWANCE OF EXPENDITURE ON ESTIMATED % BASIS CANNOT BE FOUND FAULT WITH AS THE ASSESSEE FAI LED TO SUBSTANTIATE ITS CLAIM OF EXPENDITURE. THE ASSESSING OFFICER, IN THE ABSENCE OF COOPERATION DISALLOWED THE EXPENDITURE ON A CONSERVA TIVE BASIS. THE LEARNED CIT(A) SHOULD HAVE UPHELD HIS ORDER INSTEAD OF APPLYING 12% N.P. RATE. RELIANCE IS PLACED ON THE DECISION OF HO NBLE RAJASTHAN HIGH COURT IN THE CASE OF KANSARA BEARING PVT. LTD. VS. ACIT 270 ITR 235 HOLDING THAT IF THE FINDING OF ESTIMATED PROFIT IS BORNE OUT BY THE RECORD THEN THE SAME BECOMES THE FINDING OF FACT AGAINST W HICH SHOULD NOT BE ROUTINELY INTERFERED AND AGAINST WHICH NO SUBSTANTIA L QUESTION OF LAW ARISES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT EM ERGES FROM THE RECORD THE ASSESSEES CONDUCT DURING ASSESSMENT PRO CEEDINGS WAS ONE OF NON-COOPERATION AND NON-COMPLIANCE QUA THE QUERI ES WHICH RESULTED IN EX PARTE ASSESSMENT. THIS OBSERVATION AND CONCLUS ION HAS NOT BEEN ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 11 AGITATED THE ASSESSEE EITHER BEFORE THE CIT(A) OR BE FORE THE ITAT IN GROUNDS. SIMILARLY NEITHER BEFORE CIT(A) NOR BEFORE US ANY PRAYER FOR ADMISSION OF ANY ADDITION EVIDENCE HAS BEEN MADE TO IMPROVE ON THE MERITS. THUS, THIS CASE INVOLVES PECULIAR FACTS FOR DETERMINATION OF TAXABLE INCOME, LEARNED CIT(A) GAVE PART RELIEF OBSE RVING THAT THE ASSESSEES BOOKS SHOULD HAVE BEEN REJECTED INSTEAD OF % DISALLOWANCE OF EXPENDITURE. LD. CIT(A) ESTIMATED THE N.P. @ 12% AS REASONABLE ESTIMATION. ACCORDING TO THE REVENUE, THE LEARNED CIT(A) SHOULD HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER AND THE ASSESSEE CLAIMS THAT IN CASE OF REJECTION OF BOOKS, ITS N.P. IN EARLIER YEARS SH OULD HAVE BEEN APPLIED. IN OUR VIEW, ASSESSEES CONDUCT DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS DOES NOT GIVE A CONDUCIVE PIC TURE, IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A) HOLDING THAT THE ASSESSEES BOOKS OF ACCOUNT SHOULD HAVE BEEN REJECTED AND NP SHOULD BE ESTIMATED AT 12%. TH IS WAY OF ESTIMATION IN CASE OF REJECTION OF BOOKS IS ALSO A RECOGNIZED MANNER. 8. HAVING HELD SO, THE NEXT QUESTION ARISES ABOUT REASONABLENESS OF ESTIMATION OF THE TAXABLE INCOME. THE LEARNED CIT(A) AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES WAS OF THE VIEW THAT THE NON- COOPERATION OF THE ASSESSEE CANNOT BE PUT TO ITS AD VANTAGE IN ONLY ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 12 ADOPTING EARLIER YEARS N.P. THE ASSESSEE CANNOT ON T HE ONE HAND CHOSE TO BE TO NON-COOPERATIVE, NON COMPLIANT AND OBSTRUC TING A FAIR ASSESSMENT AND ON THE OTHER HAND, CLAIM A PARTICULA R PERCENTAGE OF N.P. TO BE ADOPTED AS A PRIZE FOR HIS RECALCITRANCE . THE ASSESSEE HAS NOT BEEN ABLE TO DEMONSTRATE THAT THE 2% ADOPTED BY LEA RNED CIT(A) ORDER IS ARBITRARY. THE ONLY RELIANCE PLACED IS ON CASE LA W THAT A LESSER PROFIT SHOULD BE TAKEN, NOTHING HAS BEEN ADVERTED TO EXPLA IN WHY THE ASSESSEE CANNOT EARN 12% NP. IN SOME CASES CONTRACT ORS EARN MORE ALSO, IN THE GIVEN FACTS AND CIRCUMSTANCES IT IS TH E BURDEN OF THE ASSESSEE TO OBJECTIVELY PROVE THAT HE EARNED LESS T HAN THE ESTIMATE. THIS BURDEN HAS NOT BEEN PROPERLY DISCHARGED. 9. IT IS TRITE LAW THAT WHILE CHALLENGING THE ESTIMAT E MADE BY THE INCOME TAX AUTHORITIES, THE BURDEN IS ON THE ASSESS EE TO CONVINCINGLY DEMONSTRATE THAT THE ESTIMATE IS ARBITRARY, SO AS T O ENABLE THE APPELLATE AUTHORITY TO INTERFERE. IN ABSENCE OF ANY CONVINCIN G ARGUMENTS OR EVIDENCE IN THIS BEHALF, WE SEE NO REASON TO INTERFE RE IN THE ORDER OF ESTIMATE MADE BY THE LEARNED CIT(A). IN THESE CIRCU MSTANCES, WE SEE NO REASON TO INTERFERE WITH THE RATE OF N.P. AS ESTI MATED BY THE LEARNED CIT(A). HOWEVER, WE FIND MERIT IN THE ALTERNATE PRAYE R OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT A RELIEF OF INTEREST OF RS. 42403/- AND ITA 414 & 344/JP/2012_ ACIT VS ASHOK JAIN 13 DEPRECIATION OF RS. 26641/- SHOULD BE GIVEN WHICH IS ALLOWED TO THE ASSESSEE. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED AN D THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/02/2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 13 TH FEBRUARY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE A.C.I.T., CIRCLE-2, KOTA/ADDL.CIT, RANGE-2, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- SHRI ASHOK JAIN, KOTA. 3. VK;DJ VK;QDRVIHY @ THE CIT(A), KOTA. 4. VK;DJ VK;QDR @ CIT, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 414 & 344/JP/2012) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR