Ram Veer Singh, Agra V. A.C.I.T., Circle-3(1), Etah

ITA 57/AGR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0382 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 15-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 44AD; 143(3); 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 57/AGRA/2012 ASSTT. YEAR : 2008-09 RAM VEER SINGH, CONTRACTOR, VS. A.C.I.T., CIRCLE 3(1), SANJAY NAGAR, AGRA ROAD, ETAH. ETAH. (PAN : AAEFR 9046 D) ITA NO. 89/AGRA/2012 ASSTT. YEAR : 2008-09 A.C.I.T., CIRCLE 3(1), VS. RAM VEER SINGH, CONTR ACTOR, ETAH. SANJAY NAGAR, AGRA ROAD, ETAH. ITA NO. 56/AGRA/2012 ASSTT. YEAR : 2008-09 M/S. ASTHA ASSOCIATES ENGINEERING & VS. A.C.I .T., CIRCLE 3(1), CONTRACTOR, 59, SHANTI NAGAR, ETAH. ETAH. (PAN : AAKFA 8373 N) ITA NO. 88/AGRA/2012 ASSTT. YEAR : 2008-09 A.C.I.T., CIRCLE 3(1), VS. M/S. ASTHA ASSOCIATES ENGINEERING & ETAH. CONTRACTOR, 59, SHANTI NAGAR, ETAH. (APPELLANTS) (RESPONDENTS) ASSESSEES BY : SHRI ANURAG SINHA, ADVOCATE REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. DATE OF HEARING : 18.02.2013 DATE OF PRONOUNCEMENT OF ORDER : 22.02.2013 ORDER PER BHAVNESH SAINI, J.M.: ABOVE CROSS APPEALS IN THE CASES OF TWO DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A), GHAZIABAD DAT ED 08.12.2011 FOR THE ITA NO. 57, 89, 56, 88/AGRA/2012 2 ASSESSMENT YEAR 2008-09. THE ISSUE IN BOTH THE CROS S APPEALS OF BOTH THE ASSESSEES ARE SIMILAR. THEREFORE, ALL THE APPEALS WERE HEARD TOGETHER AND THE PARTIES MAINLY ARGUED IN THE CASE OF ASSESSEE, RAM VEER SINGH CONT RACTOR. THEREFORE, THE SAME IS TAKEN FOR DISPOSAL AS UNDER : ITA NO. 89/AGRA/2012 (RAM VEER SINGH, CONTRACTOR) : ITA NO. 57/AGRA/2012 (-----------------DO--------- ------) 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE RETU RN OF INCOME WAS FILED ON 30.09.2008 AT A TOTAL INCOME OF RS.14,21,940/-. THE CASE WAS SELECTED FOR SCRUTINY AND TIME TO TIME SEVERAL STATUTORY NOTICES WERE SER VED UPON THE ASSESSEE, BUT THE SAME WERE NOT COMPLIED WITH. DURING THE YEAR, THE A SSESSEE HAS DERIVED INCOME FROM CONTRACT WORKS AND BANK INTEREST. THE GROSS RE CEIPTS OF THE BUSINESS ARE RS.6,00,77,558/- AS PER TRADING ACCOUNT. THE AUDIT REPORT WAS ALSO FILED. THE ASSESSEE, HOWEVER, FAILED TO PRODUCE THE BOOKS OF A CCOUNT IN COMPLIANCE TO THE NOTICES ISSUED BY THE AO. THE AO FOUND THAT SINCE N ONE OF THE STATUTORY NOTICES HAVE BEEN COMPLIED WITH, THEREFORE, THERE WAS NO OP TION EXCEPT TO PROCEED EXPARTE U/S. 144 OF THE IT ACT. THEREFORE, FINAL OPPORTUNIT Y WAS ALSO GIVEN TO THE ASSESSEE AS TO WHY EXPARTE ASSESSMENT BE NOT MADE. SINCE THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNTS, VOUCHERS AND BANK STATEMENTS, TH EREFORE, THE EXPENSES COULD NOT BE SUBJECTED TO VERIFICATION. THE AO, THEREFORE, GA VE OPPORTUNITY TO THE ASSESSEE AS TO WHY THE BOOKS OF ACCOUNT SHOULD NOT BE REJECTED AND 50% OF THE EXPENSES SHOULD NOT BE DISALLOWED. THE AO FURTHER FOUND THAT THE ASSESSEE HAS CLAIMED TOTAL ITA NO. 57, 89, 56, 88/AGRA/2012 3 EXPENSES OF RS.2,32,78,110/-. THEREFORE, THE AO PRO POSED TO DISALLOW 50% OUT OF THE SAME. THERE WERE FURTHER UNSECURED LOANS AND BA NK INTEREST, WHICH COULD NOT BE SUBJECTED TO VERIFICATION. THE AO ACCORDINGLY DISAL LOWED 50% OF THE EXPENSES AND MADE ADDITION OF RS.1,16,39,055/-. THE SAID ADDITIO N WAS CHALLENGED BEFORE THE LD. CIT(A) AND ASSESSEE FILED WRITTEN SUBMISSIONS, WHIC H IS INCORPORATED IN THE APPEAL. THE SAME WAS REMANDED TO THE AO FOR FILING THE REMA ND REPORT. THE AO AS PER DIRECTION OF THE LD. CIT(A) EXAMINED THE ISSUE AGAI N AND FOUND THAT MAXIMUM EXPENSES ARE STATED TO HAVE BEEN CLAIMED UNDER THE HEAD LABOUR EXPENSES IN A SUM OF RS.1,01,68,367/- OUT OF LABOUR EXPENSES AND RS.7 8,54,900/- UNDER THE HEAD HIRE EXPENSES. NO BOOKS OF ACCOUNT WERE PRODUCED. THE AS SESSEE PRODUCED MANUALLY WRITTEN LEDGER AND CASH BOOK. THE AO ON PERUSAL OF THE VOUCHERS NOTICED SEVERAL DISCREPANCIES, I.E., WHEN PAYMENT IS MADE TO 10 PER SONS, THE RECEIPT IS SIGNED BY ONLY ONE OR TWO PERSONS. EXPENSES WERE INCURRED AT THE SITE OR PURCHASE FROM LOCAL AGENTS AND MOST OF THE EXPENSES COULD NOT BE SUBJEC TED TO VERIFICATION. THE REMAND REPORT IS NOTED IN THE APPELLATE ORDER AND THE ASSE SSEE WAS GIVEN SEVERAL OPPORTUNITIES TO EXPLAIN THE ISSUE AND REJOINDER OF THE ASSESSEE IS ALSO REPRODUCED IN THE APPELLATE ORDER. THE LD. CIT(A), AS REGARDS THE COMPLETION OF ASSESSMENT EXPARTE U/S. 144, CONFIRMED THE ORDER OF THE AO BEC AUSE SEVERAL OPPORTUNITIES HAVE BEEN PROVIDED TO THE ASSESSEE FOR PRODUCTION OF BOO KS OF ACCOUNT AND FOR PRODUCING SUNDRY CREDITORS AND ALSO FOR FURNISHING EVIDENCES FOR EXPENDITURE CLAIMED BUT NONE WERE COMPLIED WITH. AS MANY AS 25 HEARINGS WER E HELD. THE LD. CIT(A) ITA NO. 57, 89, 56, 88/AGRA/2012 4 FOUND THAT NO WORTHWHILE DETAILS HAVE BEEN PRODUCED BEFORE HIM. THE LEDGER AND CASH BOOK WERE SHOWN BUT ON VERIFICATION OF EXPENSE S, IT WAS FOUND THAT ALL THE EXPENSES ARE ON SELF PREPARED VOUCHERS AND NO PROPE R BILLS HAVE BEEN MAINTAINED. THE CREDITORS, LOANS AND EXPENSES REMAINED UNPROVED . THEREFORE, EXPARTE ASSESSMENT ORDER U/S. 144 WAS HELD TO BE JUSTIFIED. THE LD. CIT(A) ALSO FOUND THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND ONCE BOOKS O F ACCOUNT HAVE NOT BEEN PRODUCED, THEREFORE, IT HAS TO BE ASSUMED THAT THE BOOKS HAVE NOT BEEN MAINTAINED. THE LEDGER AND CASH BOOK NOW PRODUCED HAVE NO SANCT ITY. THEREFORE, IT WAS HELD THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF A CCOUNT. THE LD. CIT(A), HOWEVER, ON THE BASIS OF PRESUMPTIVE RATE OF TAXATI ON AS PER SECTION 44AD, DIRECTED THE AO TO APPLY 8% AGAINST THE GROSS RECEIPTS AND C OMPUTED THE INCOME OF ASSESSEE AT RS.48,06,204/-. THE APPEAL OF THE ASSES SEE WAS, ACCORDINGLY PARTLY ALLOWED. 3. THE ASSESSEE IN HIS APPEAL CHALLENGED THE EXPART E ORDER U/S. 144 OF THE IT ACT AND APPLICATION OF PROVISIONS OF SECTION 44AD F OR COMPUTING THE INCOME OF THE ASSESSEE. THE REVENUE IN ITS APPEAL CHALLENGED THE ORDER OF THE LD. CIT(A) IN REDUCING THE PROFIT RATE TO 8% WHEREAS THE PROVISIO NS OF SECTION 44AD ARE NOT APPLICABLE IN THIS CASE, AS THE TURNOVER WAS MORE T HAN RS.40,00,000/-. ITA NO. 57, 89, 56, 88/AGRA/2012 5 4. THE LD. COUNSEL FOR THE ASSESSEE EARLIER SOUGHT SEVERAL ADJOURNMENTS FOR FILING THE PAPER BOOK, BUT DESPITE TAKING SEVERAL A DJOURNMENTS, NO PAPER BOOK WAS FILED. IT IS ONLY ON THE DATE OF HEARING ON 18.02.2 013, THE LD. COUNSEL FOR THE ASSESSEE FILED PAPER BOOK, BUT ONLY PAGES 50 TO 52 AND ORDER OF THE TRIBUNAL AT PAGE 53 HAVE BEEN REFERRED TO DURING THE COURSE OF ARGUM ENTS. THE LD. COUNSEL FOR THE ASSESSEE BY REFERRING TO PB-52, WHICH IS HISTORY OF THE ASSESSEE IN SEVERAL ASSESSMENT YEARS, SUBMITTED THAT IN ASSESSMENT YEAR 2010-11, THE AO PASSED THE ORDER U/S. 143(3) ON DATED 12.11.2012 AND PROFIT RA TE OF ASSESSEE AT 2.04% HAS BEEN ACCEPTED, IN WHICH THE ADDITION HAS BEEN MADE OF RS .2,39,531/- ONLY AND IN EARLIER YEAR ALSO, THE NET PROFIT RATE OF ASSESSEE WAS 2.97 % IN THE ASSESSMENT YEAR 2007-08 AND IN ASSESSMENT YEAR 2009-10, THE NET PROFIT RATE WAS 1.59%. THEREFORE, THE ADDITION IS HIGHLY EXCESSIVE AS MADE BY THE LD. CIT (A). HE HAS RELIED UPON THE ORDER OF THE ITAT, AGRA BENCH IN THE GROUP CASES OF ITO VS. SURAJ SINGH ETC. IN ITA NO. 207/AGRA/2012 ETC. DATED 19.10.2012, COPY O F WHICH FILED AT PAGE 53 OF THE PAPER BOOK. HE HAS ALSO SUBMITTED THAT THE PROV ISIONS OF SECTION 44AD ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE, AS THE TURN OVER IS MORE THAN RS. 40 LACS. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT SINCE THE EXPENSES WERE NOT SUBJECTED TO VERIFICATION, TH EREFORE, THE AO RIGHTLY DISALLOWED 50% OF THE EXPENSES AND PROVISIONS OF SE CTION 44AD WOULD NOT APPLY IN THE CASE OF ASSESSEE, AS THE TOTAL TURNOVER IS M ORE THAN RS.40 LACS. ITA NO. 57, 89, 56, 88/AGRA/2012 6 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE HISTORY OF ASS ESSEE AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE. IN BOTH THE CROSS APPEALS , THE LD. REPRESENTATIVES OF BOTH THE PARTIES ARGUED THAT THE PROVISIONS OF SECTION 4 4AD ARE NOT APPLICABLE TO THE ASSESSEES CASE BECAUSE THE TURNOVER IS MORE THAN R S.40 LACS. IN THE CASE OF ASSESSEE THE TURNOVER SHOWN BY THE ASSESSEE IS RS.6 ,00,77,558/-, THEREFORE, IT WAS MORE THAN 40 LAKHS OF RUPEES. THE PROVISIONS OF SEC TION 44AD APPLY TO THE BUSINESS OF CIVIL CONSTRUCTION OR SUPPLY OF LABOUR FOR CIVIL CONSTRUCTION AND ON PRESUMPTIVE BASIS, DIRECTED TO APPLY PROFIT RATE OF 8% OF THE GROSS RECEIPTS. HOWEVER, THE PROVISO TO THE ABOVE PROVISIONS PROVID ES THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY IN THE CASE THE AFORES AID GROSS RECEIPTS PAID OR PAYABLE EXCEED AN AMOUNT OF RS.40 LACS. SINCE IN THE CASE O F THE ASSESSEE THE GROSS RECEIPTS ARE MORE THAN RS.40 LACS, THEREFORE, EVEN IF ASSESSEE IS IN CIVIL CONSTRUCTION BUSINESS, THE PROFIT RATE ON PRESUMPTIVE BASIS AS P ROVIDED U/S. 44AD CANNOT BE APPLIED IN THE CASE OF THE ASSESSEE. BOTH THE PARTI ES IN THEIR RESPECTIVE GROUNDS OF APPEALS IN THE CROSS APPEALS CHALLENGED THE ORDER O F LD. CIT(A) IN APPLYING THE PROVISIONS OF SECTION 44AD IN THE MATTER. BOTH THE PARTIES, THEREFORE, RIGHTLY CONTENDED THAT THE PROVISIONS OF SECTION 44AD, AS A PPLIED BY THE LD. CIT(A) FOR ESTIMATING THE PROFIT OF ASSESSEE BY APPLYING THE R ATE OF 8%, CANNOT BE INVOKED IN THE CASE OF ASSESSEE. THE ORDER OF THE LD. CIT(A) I N APPLYING THE PROFIT RATE OF 8% AS PER SECTION 44AD IS, THEREFORE, SET ASIDE. THE Q UESTION THEREFORE LEFT FOR ITA NO. 57, 89, 56, 88/AGRA/2012 7 CONSIDERATION IS AS TO WHAT REASONABLE PROFIT IS TO BE APPLIED IN THE CASE OF THE ASSESSEE IN THE GIVEN SET OF FACTS AND CIRCUMSTANCE S, AS THE AO PASSED EXPARTE ASSESSMENT ORDER U/S. 144 OF THE IT ACT. THE ASSESS MENT ORDER CLEARLY SHOWS THAT THE ASSESSEE WAS AFFORDED SEVERAL OPPORTUNITIES TO PRODUCE THE BOOKS OF ACCOUNT, VOUCHERS OF EXPENSES, DETAILS OF SUNDRY CREDITORS E TC. BUT THE ASSESSEE DID NOT PRODUCE ANYTHING BEFORE THE AO. THEREFORE, THE AO D ISALLOWED 50% OF THE EXPENSES. AT THE APPELLATE STAGE, THE MATTER WAS RE MANDED TO THE AO FOR FILING THE REMAND REPORT, IN WHICH THE AO JUSTIFIED HIS ACTION IN DISALLOWING THE EXPENSES BECAUSE OUT OF EXPENSES LIKE LABOUR AND HIRING EXPE NSES, THERE WERE DISCREPANCIES IN THE VOUCHERS AND THE SAME WERE NOT SUBJECTED TO VERIFICATION. WHATEVER CASH BOOK AND LEDGER PREPARED MANUALLY WERE PRODUCED WER E NOT FOUND RELIABLE, THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT SINCE NO DOCUMENTS AND VOUCHERS WERE PRODUCED BEFORE THE AO AT ASSESSMENT STAGE AND WHATEVER BOOKS WERE PRODUCED AT REMAND STAGE WERE NOT AUTHENTIC AN D NO SANCTITY WAS ATTACHED. THEREFORE, PASSING OF THE ORDER U/S. 144 IS JUSTIFI ED. REJECTION OF BOOKS OF ACCOUNT U/S. 145 IS ALSO JUSTIFIED. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS REJECTED. 5.1 THE QUESTION NOW LEFT FOR CONSIDERATION IS ESTI MATE OF REASONABLE PROFIT. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF ITAT, AGRA BENCH IN THE CASE OF ITO VS. SHRI SURAJ SINGH AND OTHERS (SUPRA) IN W HICH ALSO, THE LD. CIT(A) ITA NO. 57, 89, 56, 88/AGRA/2012 8 APPLIED THE PROFIT RATE OF 8% INSTEAD OF 50% EXPENS ES DISALLOWED BY THE AO. IT WAS HELD THAT IN SUCH CIRCUMSTANCES, IT SHOULD BE REASO NABLE THAT REASONABLE AND FAIR ESTIMATION OF INCOME SHOULD BE MADE. CONSIDERING TH E HISTORY OF THE ASSESSEE AND TRADING ADDITIONS MADE IN EARLIER YEAR AT THE PECUL IAR FACTS OF THE CASE, IT WAS FOUND REASONABLE TO MAKE PART ADDITIONS INSTEAD OF APPLYI NG 8% PROFIT. WE HAVE ALREADY HELD ABOVE THAT APPLICATION OF PROFIT RATE OF 8% AS PER SECTION 44AD IS NOT JUSTIFIED IN THIS CASE BECAUSE THE TURNOVER EXCEEDS RS.40 LAC S. THEREFORE, HISTORY OF THE ASSESSEE SHALL HAVE TO BE CONSIDERED IN THE LIGHT O F THE OBSERVATIONS GIVEN BY THE AO AT THE ASSESSMENT STAGE AS WELL AS IN THE REMAND PROCEEDINGS FOR THE PURPOSE OF ESTIMATING THE REASONABLE AND FAIR PROFIT IN THE CA SE OF THE ASSESSEE. IN ASSESSMENT YEAR UNDER APPEAL, I.E., 2008-09, THE ASSESSEE FILE D RETURN OF INCOME AT RS.14,21,940/- DISCLOSING NET PROFIT OF 2.36%. HOWE VER, GROSS PROFIT IS SHOWN AT RS.59,63,450/- DISCLOSING G.P. RATE OF 11.9%. THE B OOK PROFIT IS SHOWN AT RS.31,10,260/- GIVING PROFIT RATE OF 5.1%. IN ASSES SMENT YEAR 2007-08 AND 2009- 10, THE GROSS PROFIT IS SHOWN AT RS.69,49,356/- AT 11% AND 22,01,206/- AT 10.8% RESPECTIVELY. BOOK PROFIT IS SHOWN AT RS.35,52,683/ - AT 5.62% AND 14,84,009/- AT 7.2%. WHEN THE ABOVE HISTORY OF THE ASSESSEE IS EXA MINED WITH REFERENCE TO THE FINDING OF FACT GIVEN BY THE AO IN THE ASSESSMENT O RDER AND REMAND PROCEEDINGS, IT IS CLEAR THAT THE ASSESSEE HAS INFLATED THE MAJOR E XPENSES, I.E., LABOUR , HIRE EXPENSES ON WHICH THE ASSESSEE CLAIMED EXPENSES AT RS.1,01,6 8,367/- AND RS.78,54,900/- RESPECTIVELY AND THE ASSESSEE DID NOT PRODUCE ANY B OOKS OF ACCOUNT AND VOUCHERS ITA NO. 57, 89, 56, 88/AGRA/2012 9 BEFORE THE AO AT THE ASSESSMENT STAGE. WHATEVER BOO KS OF ACCOUNT MANUALLY PREPARED AND SELF MADE VOUCHERS WERE PRODUCED IN RE MAND PROCEEDINGS CLEARLY REVEALED THAT THE SAME WERE NOT RELIABLE. THE AO FO UND ON EXAMINATION OF THE VOUCHERS THAT WHEN PAYMENT IS MADE TO 10 PERSONS, T HE RECEIPT IS SIGNED ONLY BY ONE OR TWO PERSONS AND NONE OF THE EXPENSES ARE VER IFIABLE. THE ABOVE FINDING OF FACT RECORDED BY THE AO HAVE BEEN CONFIRMED BY THE LD. CIT(A) BY HOLDING THAT THE BOOKS OF ACCOUNT AND VOUCHERS OF THE ASSESSEE DID N OT SUPPORT THE CASE OF THE ASSESSEE AND NO SANCTITY AND AUTHENTICITY COULD BE PROVIDED TO THE CASH BOOK AND LEDGER PRODUCED IN THE REMAND PROCEEDINGS. THE PERC ENTAGE OF THE GROSS PROFIT, RATE, BOOK PROFIT AND NET PROFIT DISCLOSED BY THE A SSESSEE AS NOTED ABOVE (PB-52) WOULD CLEARLY REVEAL THAT THERE WAS A STEEP FALL IN THE SAME BECAUSE IN ASSESSMENT YEAR 2007-08, 11% GROSS PROFIT HAS REDUCED TO BOOK PROFIT AT 5.6% AND NET PROFIT AT 2.97%. SIMILAR IS THE CASE IN ASSESSMENT YEAR 2009- 10 AND IN ASSESSMENT YEAR 2008-09, G.P. RATE IS 11.9%, BOOK PROFIT IS 5.1% AN D NET PROFIT IS 2.3%. SINCE THE ASSESSEE COULD NOT PRODUCE RELIABLE EVIDENCE IN RES PECT OF MAJOR EXPENSES LIKE LABOUR AND HIRE EXPENSES, IT IS CLEARLY PROVED THAT THE ASSESSEE INFLATED THESE EXPENSES TO REDUCE THE PROFIT MARGIN. IN THE ABSENC E OF ANY RELIABLE OR COGENT EVIDENCE PRODUCED BEFORE US, WE ARE OF THE VIEW THA T THE ASSESSEE FAILED TO PRODUCE RELEVANT AND AUTHENTIC BOOKS OF ACCOUNTS AND VOUCHE RS FOR EXPENSES AT ANY STAGE TO PROVE THE CLAIM OF EXPENSES. NOT ONLY THE EXPENSES, THE ASSESSEE ALSO FAILED TO PROVE THE GENUINE CREDITS, LOANS ETC., FOR WHICH NO ADDITION HAS BEEN MADE ITA NO. 57, 89, 56, 88/AGRA/2012 10 SEPARATELY OTHERWISE THERE WOULD HAVE BEEN FURTHER ADDITION AGAINST THE ASSESSEE. CONSIDERING THE STEEP FALL IN THE GROSS PROFIT, BOO K PROFIT AND NET PROFIT, THE LD. CIT(A) SHOULD HAVE CONSIDERED THE ISSUE OF COMPUTAT ION OF INCOME IN THE LIGHT OF FINDINGS OF AO THAT VOUCHERS OF THE EXPENSES ARE NO T RELIABLE. IN THE ASSESSMENT YEAR 2010-11, THOUGH THE ASSESSMENT ORDER IS PASSED U/S. 143(3) (PB-50), THE ASSESSEE PRODUCED COMPLETE BOOKS AND RELIABLE VOUCH ERS BEFORE THE AO AND THE AO ON EXAMINATION OF THE SAME FOUND THE BOOK RESULT OF THE ASSESSEE TO BE CORRECT. SOME EXPENSES WERE DISALLOWED WHICH COULD NOT BE SU BJECTED TO VERIFICATION. BUT IN THE YEAR UNDER APPEAL, THE ASSESSEE FAILED TO PR ODUCE RELIABLE BOOKS OF ACCOUNTS AND VOUCHERS OF EXPENSES. THEREFORE, INCOME HAS TO BE COMPUTED IN THE LIGHT OF THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE. CONSIDE RING THE FACT THAT EVEN AT THE REMAND PROCEEDINGS, THE ASSESSEE DID NOT PRODUCE AN Y RELIABLE EVIDENCE BEFORE THE AO FOR CLAIMING DEDUCTION OF THE LABOUR EXPENSES IN CRORES, IT WOULD BE REASONABLE TO ADOPT THE BOOK PROFIT OF THE ASSESSEE AT RS.31,0 0,000/-, WHICH DISCLOSES THE PROFIT RATE OF 5.1% FOR ESTIMATING THE PROFIT RATE OF ASSESSEE IN ORDER TO MEET THE ENDS OF JUSTICE AND THE FINDING OF FACT RECORDED BY THE AO AT THE REMAND PROCEEDINGS. CONSIDERING THE ABOVE DISCUSSION, WE FIND IT REASONABLE AND APPROPRIATE TO ESTIMATE THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS.31,00,000/- (ROUND FIGURE) INSTEAD OF INCOME COMPUTED BY THE LD. CIT(A) AT RS.48,06,204/-. IN THE RESULT, THE DEPART MENTAL APPEAL FAILS AND IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 57, 89, 56, 88/AGRA/2012 11 ITA NO. 88 & 56/AGRA/2012 (ASHTHA ASSOCIATE ENGG. & CONTRACTOR): 6. IN THIS CASE, THE FACTS ARE IDENTICAL AS HAVE BE EN CONSIDERED IN THE CASE OF ASSESSEE RAM VEER SINGH CONTRACTOR ABOVE. IN THIS C ASE THE RETURN OF INCOME HAS BEEN FILED AT RS.14,86,190/-. THE ASSESSEE DERIVED INCOME FROM CONTRACT WORK AND BANK INTEREST. SIMILARLY, EXPARTE ASSESSMENT ORDER U/S. 144 WAS PASSED. THE ASSESSEE CLAIMED MAJOR EXPENSES ON FREIGHT & CARTAG E AND WAGES. 50% EXPENSES WERE DISALLOWED. THE AO AT THE REMAND PROCEEDINGS, SIMILARLY HELD THAT THE VOUCHERS ARE NOT SUBJECTED TO VERIFICATION AND WHEN EVER PAYMENT IS MADE TO 10 PERSONS, RECEIPT IS SIGNED BY ONE OR TWO PERSONS. T HE LD. CIT(A) CONFIRMED THE EXPARTE ASSESSMENT ORDER U/S. 144 AND REJECTION OF BOOKS OF ACCOUNT U/S. 145 OF THE IT ACT AND DIRECTED TO APPLY PROFIT RATE OF 8% ACCO RDING TO SECTION 44AD OF THE IT ACT. IN BOTH THE CROSS APPEALS, SIMILARLY WORDED GR OUNDS OF APPEAL HAVE BEEN RAISED. THOUGH THE LD. COUNSEL FOR THE ASSESSEE FIL ED PAPER BOOK ONLY ON THE DATE OF HEARING, BUT REFERRED TO ONLY HISTORY OF THE ASSESS EE FILED AT PAGE 37 OF THE PAPER BOOK, IN WHICH THERE IS STEEP FALL IN G.P., NET PRO FIT AND BOOK PROFIT. IN THIS CASE IN SUBSEQUENT ASSESSMENT YEARS 2009-10 AND 2010-11, TH E AO ACCEPTED THE BOOK RESULTS U/S. 143(3) (PB- 17 & 01). HOWEVER, IN THOS E ASSESSMENT YEARS, THE ASSESSEE PRODUCED RELIABLE BOOKS OF ACCOUNT AND VOUCHERS FOR EXPENSES. THEREFORE, THE SAME WOULD NOT HELP THE ASSESSEE, CONSIDERING THE OBJECT IONS OF THE AO AT REMAND PROCEEDINGS THAT NO RELIABLE BOOKS AND VOUCHERS HAV E BEEN PRODUCED. THEREFORE, TO ITA NO. 57, 89, 56, 88/AGRA/2012 12 MEET THE ENDS OF JUSTICE AS HELD IN THE CASE OF RAM VEER SINGH CONTRACTOR, THE PROFIT OF THE ASSESSEE IS ASSESSED AT RS.30,00,000/ - INSTEAD OF INCOME ESTIMATED BY THE LD. CIT(A) AT RS.44,83,506/-. THE ORDER IN THE CASE OF RAM VEER SINGH CONTRACTOR (SUPRA) IS FOLLOWED AND INCOME OF THE AS SESSEE IS ACCORDINGLY COMPUTED AT RS.30,00,000/-. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND DEPARTMENTAL APPEAL IS DISMISSED. 7. IN THE RESULT, BOTH THE DEPARTMENTAL APPEALS ARE DISMISSED AND BOTH THE APPEALS OF ASSESSEES ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY