Shri Yashwant M. Mahajan, Jalgaon V. ITO, Ward 1(1), Jalgaon

ITA 515/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1692 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 18-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUDHANSHU SHEKHAR
• Keywords: Revised return
• Section: 145

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.515/PN/2013 #& & / ASSESSMENT YEAR : 2009-10 SHRI YASHWANT M. MAHAJAN, PLOT NO.2, SAMARTH COLONY, JALGAON, PIN NO. 425 001 PAN NO. AAXPM8694H . / APPELLANT V/S ITO, WARD-1(1), JALGAON . / RESPONDENT / ASSESSEE BY : SHRI SUNIL GANOO / REVENUE BY : SHRI SUDHANSHU SHEKHAR / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24-12-2012 OF THE CIT(A)-II, NASHIK RELATING TO AS SESSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, HOT MI X PLANT AND STONE CRUSHING. HE FILED HIS RETURN OF INCOME ON 01-12 -2009 DECLARING TOTAL INCOME OF RS.6,47,620/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO FILE CERTAIN DETAILS AS PER THE QUESTIONNAIRE DATED 29-07-2011 WHICH WAS ISSUED ALONG WITH NOTICE U/S.143(2) AND NOTICE U/S.141. AFTER MUCH DELAY / DATE OF HEARING :13.06.2016 / DATE OF PRONOUNCEMENT:15.06.2016 2 ITA NO.515/PN/2013 THE ASSESSEE FILED CERTAIN DETAILS. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE THE AO NOTED THAT THERE WERE VARIOUS EXPENSES WHICH WERE NOT SUPPORTED BY PROPER VOUCHERS. FURTHER, THE PROFIT DISCLOSED BY THE ASSESSEE FROM THE CONSTRUCTION BUSINESS IS ONLY @ 5.38% ON A CONTRACT RECEIPT OF RS.3,37,31,650/- WHICH IS VERY LOW AS COMPARED TO ASSESSEES DOING SIMILAR BUSINESS IN THE SAME AREA. REJECT ING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND APPLYING THE PROVISIONS OF SECTION 145(3) OF THE I.T. ACT THE AO DETERMIN ED THE NET PROFIT AT 14% ON THE CONTRACT RECEIPT OF RS.3,37,31,650/- A ND DETERMINED THE PROFIT FROM CONTRACT WORK AT RS.47,22,431/-. 3. IN APPEAL THE LD.CIT(A) RESTRICTED SUCH PROFIT TO 12% O F THE CONTRACT RECEIPT BY OBSERVING AS UNDER : 7. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER , SUBMISSION OF THE APPELLANT, REMAND REPORT OF THE AO, COUNTER COM MENTS OF THE APPELLANT ON AO'S REMAND REPORT AND THE MATERIAL AVA ILABLE ON RECORD. I FIND FROM THE RECORDS THAT THE AO VIDE QUESTIONNAIRE DATED 29/07/2011 HAD INTERALIA ASKED DETAILS OF VARIOUS EXPENSES ALONGWI TH THE RELEVANT EVIDENCES BY 12/08/2011. HOWEVER, THE APPELLANT DID NOT FURNISH ANY DETAILS TILL 28/09/2011. IN THE NAME OF EVIDENCE, TH E APPELLANT FURNISHED LEDGER ACCOUNTS OF VARIOUS EXPENSES. APPELLANT SUBMITTED THAT HE WAS NOT MAINTAINING WORK-WISE, RECEIPT-WISE, SITE-WISE, PURPOSE- WISE, QUANTITY- WISE RECORDS. APPELLANT FURNISHED LEDGER 'ACCOUNTS FOR VARIOUS EXPENSES. HOWEVER, APPELLANT FAILED TO PRODUCE RELEVANT VOUCH ERS, REGISTERS, MUSTER ROLL AND DOCUMENTS TO SUBSTANTIATE VARIOUS EXPENSES CLAIM ED BY HIM IN P & L A/C IN HIS BUSINESS OF GOVERNMENT CONTRACTS IN RESP ECT OF CIVIL CONSTRUCTION. THE AO HAD SPECIFICALLY ASKED FOR SITE-WI SE AND WORK-WISE EXPENDITURE DETAILS. THE APPELLANT IS STATED TO HAVE A DMITTED THAT HE WAS NOT MAINTAINING SITE-WISE EXPENSES DETAILS. TAKING INTO CONSIDERATION THE APPELLANT'S NON-PRODUCTION OF FULL AND COMPLETE EXPE NDITURE VOUCHERS AND OTHER DETAILS IN REGARD TO OPENING AND CLOSING W IP, AO REJECTED BOOK RESULTS U/S 145 (3) OF THE IT ACT AND PROCEEDED TO ESTI MATE NET INCOME @ 14% OF TOTAL CONTRACT RECEIPTS BASED ON 2 COMPARABLE CASES OF M/S. B.C. BIYANI PROJECT PVT. LTD. OF BHUSAWAL AND M/S INDRAJIT SINGH CHHABRA OF BHUSAWAL WHEREIN THE APPELLANTS (GOVT. CIVIL CONTRACT ORS) THEMSELVES ADMITTED NET PROFIT @ 14% OF CONTRACT RECEIPTS. AO D URING THE ASSESSMENT FOUND THAT A LARGE NUMBER OF VOUCHERS WERE SELF-MADE AND THE APPELLANT FAILED TO SUBSTANTIATE THE GENUINENESS OF THE PAYMENTS O F THE SAID EXPENSES. IN THE AUDIT REPORT ALSO THE AUDITORS HAD WRI TTEN THAT THEY HAVE NOT PHYSICALLY VERIFIED STOCK AND WIP AS ON 31/03/2009 AND THE SAME WAS TAKEN AS VALUED AND CERTIFIED BY PROPRIETOR. IN T HE CASE OF CASH PAYMENTS EXCEEDING RS.20,000/- DURING THE YEAR, AUDIT OR'S REPORT WAS BASED ON APPELLANT'S CERTIFICATE. IN VIEW OF THE ABOV E, AO CONCLUDED THAT 3 ITA NO.515/PN/2013 BOOKS RESULTS WERE LIABLE TO BE REJECTED U/S 145(3) OF THE ACT. HE THEREAFTER, ESTIMATED NET PROFIT @ 14% OF TOTAL CONT RACT RECEIPTS. THE APPELLANT HAS CONTESTED THE AO'S ACTION IN APPEAL BEFO RE ME. 7.1. I HAVE ALSO CAREFULLY GONE THROUGH THE POINTS M ADE BY THE AO IN THE REMAND REPORT AND APPELLANT'S COUNTER COMMENTS. T HE APPELLANT HAS CONTENDED THAT IN THE PAST ALSO HIS RESULTS WERE ACCEPTE D. IN THIS CONNECTION HE HAS FILED HON'BLE ITAT PUNE'S ORDER IN HIS OWN CASE FOR A.Y. 2007-08 IN WHICH THE HON'BLE COURT HAD RESTRICTED DI SALLOWANCE OF EXPENSES TO RS. 1 LAC ONLY. IN THIS REGARD, I AM OF THE OPINION THAT THE PRINCIPLE OF RES-JUDICATA DOES NOT APPLY TO TAX PROC EEDINGS. INCOME FOR EACH ASSESSMENT YEAR NEEDS TO BE COMPUTED ON THE BASIS OF FACTS PREVAILING IN THAT PARTICULAR ASSESSMENT YEAR. I FIND T HAT IN THIS PARTICULAR ASSESSMENT YEAR THE APPELLANT'S EXPENSES ON LABOUR INCREASE D FROM 20.52% OF TOTAL RECEIPTS IN A.Y 2008-09 TO 31.2 % OF TOTAL CONTRACT RECEIPTS. WHILE THE LABOUR EXPENSES WERE 21.72% OF TOT AL CONTRACT RECEIPTS IN A.Y. 2006-07, THE SAID LABOUR EXPENSES WERE 22.25% IN A.Y. 2007-08. A CHART IN THIS REGARD IS GIVEN BELOW: A . Y. CONTRACT RECEIPTS LABOUR EXPENSES % OF LABOUR EXPENSES (RS. ) ( RS. ) TO CONTRACT RECEIPT 2006 - 07 2,82 , 45,082 61,36,782 21 . 72% 2007 - 08 4,87.56,328 1,08,52,069 22.25% 2008 - 09 1,66,30,204 34,L3,620 20.52% 2009 - 10 3,37,31,650 1,05 , 44,674 31 . 2% IN VIEW OF THE ABOVE, DURING THE APPELLATE PROCEEDI NGS THE APPELLANT WAS ASKED TO PRODUCE THE DETAILS OF TOTAL WORKFORCE ENGAG ED, DETAILS OF LABOUR CONTRACTS, MUSTER ROLL, SITES AT WHICH SUCH WORK FORCE WAS ENGAGED, AGREEMENT WITH LABOUR CONTRACTORS, IF ANY, DETAILS OF SUB-CONTRACTORS, IF ANY, RATE AT WHICH PAYMENTS WERE MADE TO LABOUR FOR VERIFICATION OF THE LABOUR EXPENSES. THE APPELLANT HOWEVER, SENT A COPY OF MUSTER ROLL BY POST STATING THAT IT WAS NOT MAINTAINING DETAILS OF SITE -WISE LABOUR EXPENSES AND SITE-WISE LABOUR MUSTER ROLL. LABOUR EXPENSE S CONSTITUTE 23% OF TOTAL EXPENSES AND NEEDED TO BE VERIFIED FOR A SCERTAINING THE AUTHENTICITY OF APPELLANT'S CLAIM IN REGARD TO GENUI NENESS OF THE EXPENSES CLAIMED IN THE P & L A/C. THE PERCENTAGE OF LABOUR EXPENSES TO TOTAL EXPENSES IN. A.Y. 2008-09 WAS ONLY 14.44%. 7.2 TAKING INTO CONSIDERATION THE FACTS IN TOTALITY, I AM OF THE CONSIDERED VIEW THAT AO WAS JUSTIFIED IN REJECTING BOO K RESULTS U/S.145(3) OF THE ACT. THE APPELLANTS OPENING WIP A ND CLOSING WIP WERE NOT VERIFIED BY THE AUDITORS AS PER THEIR STATEMENT IN THE TAX AUDIT REPORT. SPECIFIC DEFECTS IN THE VOUCHERS WERE POINTED OUT BY THE AO DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT FAILED TO PRODUCE RELEVANT SITE- WISE EXPENDITURE VOUCHERS/REGISTERS WHICH WERE NECESSARY FOR VERIFYING EXPENSES CLAIMED IN THE P&L A/C. THE APPELLANT ALSO D ID NOT MAINTAIN PROPER ACCOUNTS RELATING TO PAYMENT OF WAGES TO LABOU R. THE EXPENDITURE INCURRED BY THE APPELLANT RELATING TO ITS CONSTRUCTIO N ACTIVITIES AND RECORDED IN THE BOOKS OF ACCOUNT WAS NOT SUPPORTED BY BILLS OR VOUCHERS. LABOUR PAYMENTS WHICH CONSTITUTED 31.2% OF TOTAL EXP ENSES WERE NOT SUPPORTED BY VERIFIABLE DETAILS. THE WORKING RESULTS E FFECTED IN THE BOOKS 4 ITA NO.515/PN/2013 MUST BE VERIFIABLE AND BEYOND DISPUTE. THE APPELLANT S CONTENTION THAT BOOKS WERE AUDITED U/S.44A OF THE ACT DOES NOT SUPPORT HIS CASE AS THE MAJOR EXPENDITURE CLAIMED BY HIM IN P&L A/C WERE NO T SUPPORTED BY PROPER BILLS AND VOUCHERS. THE REJECTION OF BOOK RESU LTS WAS JUSTIFIED AS TRUE RESULTS WERE NOT ASCERTAINABLE IN ABSENCE OF MAIN TENANCE OF SITE- WISE PROJECT-WISE EXPENDITURE RECORD. 7.3 AS REGARDS ESTIMATING NET PROFIT @ 14% OF TOTAL CO NTRACT RECEIPTS AS AGAINST NET PROFIT 5.3% SHOWN BY THE APPELLANT, I A M OF THE VIEW THAT AO'S ESTIMATE NOT ONLY NEEDS TO BE FAIR, REASONABLE BUT ALSO BASED ON THE PAST HISTORY AND COMPARABLE CASES. WHILE THERE IS NO DO UBT THAT THE COMPARABLE CASES OF M/S B.C. BIYANI PROJECT PVT. LTD A ND M/S INDRAJITSINGH CHHABRA WERE ALSO THAT OF CIVIL CONTRAC TORS, THE SHEER VOLUME OF CONTRACT RECEIPTS IN THE CASE OF M/S. B.C. B IYANI WAS MUCH HIGHER I.E. RS. 59.64 CRORE AS AGAINST RECEIPTS OF RS. 3 .37 CRORE IN THE CASE OF APPELLANT. SINCE THE AO HAS NOT DISPUTED THE TOTAL CONTRACT RECEIPTS, IT IS PRESUMED TO BE FACTUAL. HOWEVER, IT IS NOT DISPUTED TH AT THE LABOUR PAYMENT IN THIS A.Y IS 31.2% OF TOTAL CONTRACT RECEIP TS WHICH IS ABNORMALLY HIGH AS COMPARED TO EARLIER YEARS. THE APP ELLANT HAS ALSO FAILED TO SUBSTANTIATE HIS LABOUR EXPENSES DESPITE OPPORT UNITIES GIVEN DURING THE ASSESSMENT PROCEEDINGS/APPELLATE PROCEEDINGS. THE APPELLANT'S CONTENTION THAT RATE OF LABOUR INCREASED DURING THE YEAR AND THAT IT UNDERTOOK ROAD CONSTRUCTION UNDER PMGSY WHER E LABOUR RATE WAS HIGH IS WITHOUT ANY MATERIAL SUPPORT. THERE HAS ALWAYS BEEN AN INCREASE IN LABOUR RATE EVERY THE YEAR. THE CONTRACT BIDS ARE ACCORDINGLY MADE KEEPING IN MIND THE LIKELY INCREASE IN VARIOUS EXPENSE S INCLUDING THE LABOUR. IN VIEW OF THE APPELLANT'S ABNORMAL CLAIM OF LABOUR EXPENSES IN THIS YEAR AND HIS FAILURE TO PRODUCE THE RELEVANT REC ORDS IN REGARD TO LABOUR EXPENSES, AN INFLATION IN LABOUR EXPENSES TO RED UCE HIS TAXABLE INCOME CANNOT BE RULED OUT. SIMILARLY, INFLATION IN OTHER EXPENSES FOR WHICH VOUCHERS WERE FOUND TO BE DEFECTIVE, CANNOT BE RULED OUT. THUS THE BOOKS OF ACCOUNT DO NOT DEDUCE TRUE AND CORRECT PROF IT OF THE APPELLANT. TAKING INTO CONSIDERATION A HOLISTIC APPROACH AND THE FACTS OF THE CASE, I AM OF THE CONSIDERED VIEW THAT WHILE AO WAS JUSTIFIED IN REJECTING BOOK RESULTS U/S 145(3) OF THE ACT, HE WAS NOT CORRECT IN AP PLYING NET PROFIT @ 14% ON THE BASIS OF M/S B. C. BIYANI PROJECTS (P) LTD . AND INDRAJITSING CHHABRA IN VIEW OF THEIR HUGE CONTRACT RECEIPTS VIS- A-VIS APPELLANT'S CONTRACT RECEIPTS. IN MY OPINION A NET PROFIT @ 12% OF THE TOTAL CONTRACT RECEIPTS WOULD MEET THE END OF THE JUSTICE. NET PROFI T @ 12% OF TOTAL CONTACT RECEIPTS OF RS.3,37,31,650/- COMES OUT TO BE R S. 40,47,798/- THE APPELLANT WOULD GET A RELIEF OF RS. 6,74,633/-. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEA L BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE PREVAILING IN CIRCUMSTANC ES OF THE CASE AS PER THE PROVISION OF LAW, THE CIT(A) HAS GROSSLY ERRED IN ESTIMATING NET PROFIT AT RS.40,47,798/- (WHICH IS @12% ON CONTRACT R ECEIPT OF RS.3,37,31,650/-], AS AGAINST NET PROFIT SHOWN AT RS.18, 15,057/- AND CONFIRMING THE ADDITION AT RS.22,32,741/-. THEREFOR E, ADDITION CONFIRMED BY CIT(A) MAY PLEASE BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER THE PROVISION OF LAW, THE CIT(A) HAS GROSSLY ERRED IN REJECTING GROUND OF INTEREST MERELY STATING THAT IT IS MANDATORY PROVISI ON, EVEN THOUGH 5 ITA NO.515/PN/2013 APPELLANT IS NOT LIABLE TO PAY ANY INTEREST U/S.234B O F THE I.T. ACT. 1961, AND DENIED HIS LIABILITY, AS ENTIRE INCOME OF THE APP ELLANT IS SUBJECTED TO THE TDS. THE AFORESAID FINDING OF CIT(A) BEING LEGA LLY UNSUSTAINABLE, ARBITRARY, AND DEVOID OF MERITS, THE SAME MAY PLEASE B E VACATED. 3. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF THE A PPEAL, IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMIT TED THAT THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNT AN D HIS ACCOUNTS ARE AUDITED U/S.44AB AND THEREFORE THE PROFIT R ATE ADOPTED BY THE AO WHICH HAS BEEN SLIGHTLY REDUCED BY THE CIT(A ) IS NOT CORRECT. SO FAR AS THE 2 COMPARING CASES ARE CONCERNE D THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE COPY OF THE AS SESSMENT ORDER IN CASE OF M/S. INDRAJITSINGH CHHABRA SUBMITTED THAT THE ASSESSEE IN THAT CASE HAD FILED ORIGINAL RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5.83 CRORES AND SUBSEQUENTLY THE ASSESSEE FILED A REVISED RETU RN BY INCREASING THE PROFIT BY RS.95,50,000/-. THE REASONS FOR R EVISED RETURN OF INCOME WAS FOR NON-KEEPING OF SITE-WISE PARTICULAR DETAILS. UNDER THESE CIRCUMSTANCES, THE FACTS OF THAT CASE CANN OT BE COMPARED WITH THAT OF THE ASSESSEE. SIMILARLY IN THE CASE OF B.C. BIY ANI PROJECT PVT. LTD. HE REFERRED TO THE ASSESSMENT ORDER AND SUBM ITTED THAT THE ASSESSEE AFTER BEING CONFRONTED WITH THE DISCREPANCIES IN THEIR BOOKS OF ACCOUNT WAS UNABLE TO JUSTIFY THE SAME AND TO BUY P EACE OF MIND AND TO AVOID LITIGATIONS OFFERED TO DISCLOSE 14% PROFIT FROM TH E CONTRACT BUSINESS OF RS.59.65 CRORES. THEREFORE, THE FACTS OF THIS C ASE ALSO IS NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. THUS, THE 2 DECISIONS RELIED ON BY THE AO ARE DISTINGUISHABLE AND NOT A PPLICABLE TO THE FACTS OF THE PRESENT CASE. 6 ITA NO.515/PN/2013 6. REFERRING TO PAGE 23 OF THE PAPER BOOK THE LD. COUNS EL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE COMPA RATIVE DETAILS OF NET PROFIT AND GROSS PROFIT RATIO AND SUBMITTED THAT THE NET PROFIT DECLARING DURING A.Y. 2006-07 WAS 2.18%, IN A.Y. 2007-08 IT W AS 3.22% IN A.Y. 2008-09 IT WAS 5.58%. HE SUBMITTED THAT DURIN G A.Y. 2007-08 THE CASE WAS UNDER SCRUTINY. THE AO ESTIMATED THE PROFIT AND THE MATTER TRAVELLED UPTO THE TRIBUNAL. THE TRIBUNAL SUSTAINED ADDITION OF ONLY RS. 1 LAKH. HE ACCORDINGLY SUBMITTED THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE PROFIT PERCENTAG E OF 12% ADOPTED BY THE CIT(A) IS HIGHLY EXCESSIVE AND UNREASONAB LE AND SHOULD BE REDUCED. HE SUBMITTED THAT A PROFIT RATE OF 6% UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE WILL BE REASONABLE. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAN D HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT IT IS AN ADMITTED FACT THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSES SEE ARE NOT RELIABLE AS POINTED OUT BY THE AO FOR WHICH HE REJECTED T HE BOOK RESULTS AND ESTIMATED THE PROFIT RATE OF 14% WHICH IS IN LINE WITH ASSESSEES DOING SIMILAR CONTRACT BUSINESS IN THE SAME ARE A. THE LD.CIT(A) HAS ALREADY GIVEN RELIEF BY REDUCING THE GROSS PR OFIT MARGIN TO 12% WHICH IN THE PRESENT CASE IS REASONABLE. HE ACCO RDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE ASSESSEE IN T HE INSTANT CASE IS ENGAGED IN CONSTRUCTION BUSINESS. THE AO AFTER R EJECTING THE BOOK RESULTS OF THE ASSESSEE ADOPTED THE PROFIT RATE OF 14% ON THE CONTRACT RECEIPTS OF RS.3.37 CRORES. WHILE DOING SO, HE RE FERRED TO THE 7 ITA NO.515/PN/2013 BOOK RESULTS SHOWN BY 2 DIFFERENT ASSESSEES, NAMELY M/S. B.C. BIYAN I PROJECT PVT. LTD. AND M/S. INDRAJITSINGH CHHABRA WHO HAV E DECLARED 14% PROFIT FROM CONTRACT BUSINESS. WE FIND IN APPEAL THE LD .CIT(A) REDUCED SUCH PROFIT PERCENTAGE TO 12%. IT IS THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSESSEE THAT THE RELIANCE ON THE 2 DEC ISIONS BY THE AO ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. FURTHER, IN A.Y . 2007-08 WHEN THE MATTER TRAVELLED UPTO THE TRIBUNAL, THE TRIBUNAL SUSTAINED ADDITION OF ONLY RS. 1 LAKH ON ESTIMATE BASIS. TH EREFORE, THE PROFIT RATE ADOPTED BY THE AO AND MARGINAL RELIEF GIVEN BY THE CIT(A) IS INCORRECT. 9. WE FIND SOME FORCE IN THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. FROM THE VARIOUS DETAILS FURNISH ED BY THE ASSESSEE, WE FIND THE ASSESSEE IN A.Y. 2006-07 HAS DECLARE D NET PROFIT OF 2.18% ON CONTRACT RECEIPT OF RS.2.82 CRORES. SIMILARLY, FOR A.Y. 2007-08 NET PROFIT WAS 3.22% ON CONTRACT RECEIPT OF RS.4.8 7 CRORES. SIMILARLY, FOR A.Y. 2008-09, THE PROFIT FROM CONTRACT WORK WAS 5.58% ON CONTRACT RECEIPT OF RS.1.66 CRORES. FOR THE CURRENT ASSESSMENT YEAR, NET PROFIT RATIO DECLARED BY THE ASSESSEE IS 5.38% ON CONTRACT RECEIPT OF RS.3.37 CRORES. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSMENT FOR A.Y. 2007-08 WAS SCRUTINISED WHEREIN THE AO HAD REJECTED THE BOOK RESULTS SHOWN BY THE ASSESSEE. HOW EVER, WHEN THE MATTER TRAVELLED UPTO THE TRIBUNAL THE TRIBUNAL SUSTAINED A DDITION OF RS. 1 LAKH ONLY. AS HAS ALREADY BEEN POINTED OUT BY TH E LD. COUNSEL FOR THE ASSESSEE, THE RELIANCE PLACED ON BY THE REVENUE IN THE 2 COMPARATIVE CASES ARE FACTUALLY DIFFERENT. IN THE CASE OF M/S. INDRAJITSINGH CHHABRA WE FIND THE ASSESSEE HIMSELF HAS FILED A REVISED RETURN BY DECLARING ADDITIONAL INCOME OF RS.95,50,000/- DUE TO NON KEEPING OF SITE-WISE PARTICULAR DETAILS. SIMILARLY, IN THE CASE OF B.C. 8 ITA NO.515/PN/2013 BIYANI PROJECT PVT. LTD. WE FIND THE ASSESSEE VOLUNTARILY DECLARED 14% INCOME TO BUY PEACE OF MIND AND TO AVOID LITIGATION BECAUSE OF THE VARIOUS DISCREPANCIES POINTED OUT BY THE AO DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THOSE 2 CASES RELIED ON BY THE AO AS COMPARATIVE CASE IN OUR OPINION ARE NOT APPLICABLE TO T HE FACTS OF THE PRESENT CASE. AT THE SAME TIME, THE BOOK RESULTS D ECLARED BY THE ASSESSEE IN THE PRESENT CASE IN OUR OPINION CANNOT BE ACCEPTED DUE TO VARIOUS DISCREPANCIES POINTED OUT BY THE AO ESPECIALLY WH EN MOST OF THE EXPENSES ARE NOT SUPPORTED BY PROPER VOUCHERS. 10. IT IS THE SETTLED PROPOSITION OF LAW THAT FOR CLAIMING AN Y EXPENDITURE AS GENUINE, THE ONUS IS ALWAYS ON THE ASSES SEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE AO THAT THE EXPENSES ARE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PUR POSE OF BUSINESS. HOWEVER, IN THE INSTANT CASE, AS MENTIONED BY T HE AO, MOST OF THE VOUCHERS ARE SELF MADE. THEREFORE, THE BOOK RESULTS CANNOT BE ACCEPTED AS TRUE. FURTHER, THE FINDING GIVEN BY THE LD.CIT(A) THAT THE LABOUR PAYMENT DURING THE CURRENT YEA R AT 31.2% IS VERY HIGH AS AGAINST 20.52% IN A.Y. 2008-09, 22.25% IN A.Y.2 007-08 AND 22.71% IN A.Y. 2006-07 COULD NOT BE CONTROVERTED B Y THE LD. COUNSEL FOR THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT ADOPTION OF P ROFIT RATE OF 8% ON THE GROSS CONTRACT RECEIPT OF RS.3,37,31,650/- WILL B E JUST AND PROPER AND WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY, WE DIRECT THE AO TO ADOPT THE PROFIT PERCENTAGE OF 8% AS AGAINST 12% HELD BY THE CIT(A) ON CONTRACT RECEIPT OF RS.3,37,31,650/-. THE GROUND S RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 9 ITA NO.515/PN/2013 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-06-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ' DATED :15 TH JUNE, 2016. ) *#,! -!/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . THE CIT(A ) - II, NASHIK 4. 5. 6. THE CIT - II , NASHIK $ ''( , ( , / DR, ITAT, B PUNE; + / GUARD FILE. / BY ORDER, // TRUE COPY // // $ ' //TRUE -. ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE