RAJ KUMAR GUPTA, Jaipur V. ITO, Jaipur

ITA 789/JPR/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6227 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-03-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 01-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA JCIT DR DHK
• Keywords: Rejection of books of accounts; Depreciation
• Section: 145

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 FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 789/JP/2016 & 212/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2012-13 & 2013-14 SHRI RAJ KUMAR GUPTA F-100, PANCHSHEEL MARG, C-SCHEME JAIPUR CUKE VS. THE ITO WARD- 6(5) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AHPPG 4958 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI VIKASH RAJVANSHI, CA JKTLO DH VKSJ LS@ REVENUE BY:SMT. SEEMA MEENA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06/03/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 9/04/2018 VKNS'K@ ORDER PER BHAGCHAND, AM BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD. CIT(A)-2, JAIPUR DATED 27-07-2016 AND 23-09-2016 FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14 RESPECTIVE LY RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. ITA NO. 789/JP/2016 A.Y. 2012-13 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACTS IN WRONGLY REJECTING THE BOOKS OF ACCOUNT U/S 145(3) A PPLIED 5.5% N.P. RATE ON CONTRACT RECEIPTS BEFORE DEPRECIATION AND INTEREST (LD. AO ASSESSED AT 8%) INSTEAD OF ACTUAL N.P. OF 3 .45% WITHOUT ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 2 CONSIDERING OWN PAST HISTORY OF THE ASSESSEE. WE RE QUEST FOR APPLICATION OF ACTUAL APPLICATION N.P. OF 3.45%. 2. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACT IN CONSIDERING THE GROSS MACHINERY RENT CONTRACT OF RS . 12,48,450/- AS INCOME FROM OTHER SOURCES AND DID NO T CONSIDER IT AS A PART OF TURNOVER FOR APPLICATION OF NP RATE WHEREAS IT IS A NORMAL BUSINESS OF CIVIL CONTRACTOR AND THERE ARE A LSO GENUINE EXPENSES WHICH WERE NOT REDUCED FROM GROSS RECEIPTS SUCH AS SALARY TO DRIVER, KHALLASI, DEPRECIATION, BANK CHAR GES, FUEL EXPENSES, INTEREST EXPENSES, REPAIRS AND MAINTENANC E EXPENSES, GENERAL WAGES EXPENSES WHICH WERE NOT CONSIDERED BY BOTH AO / LD. CIT(A). HENCE, WE REQUEST YOUR HONOUR THAT RS . 12,48,450/- SHOULD NOT BE SEPARATELY ADDED AND MAY BE CONSIDERED AS A PART OF TURNOVER. ITA NO. 212/JP/2017 A.Y. 2013-14 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACTS IN WRONGLY UPHOLDING REJECTION THE BOOKS OF ACCOUNT U/ S 145(3) OF I.T. ACT, 1961 WITHOUT ANY SIGNIFICANT DEFECT AND A RBITRARILY APPLIED 5.50% BEFORE ALLOWING INTEREST AND DEPRECIA TION N.P. JUST ON THE BASIS OF PREVIOUS ORDERS WITHOUT CONSID ERING THE PAST HISTORY OF THE ASSESSEE. 2. THE AO AND LD. CIT(A) HAS ERRED IN LAW AS WELL A S IN FACT NOT ALLOWING DEDUCTION OF SALES TAX FROM NP RA TE. ONLY INTEREST AND DEPRECIATION WERE ALLOWED AS DEDUCTION S WHEREAS JURISDICTIONAL HIGH COURT HAS ALLOWED DEDUCTION OF SALES TAX ALONGWITH INTEREST AND DEPRECIATION FROM N.P. RATE FIRST OF ALL, WE TAKE UP THE GROUNDS OF APPEAL OF T HE ASSESSEE FOR THE ASSESSMENT YEAR 2012-13 FOR ADJUDICATION. 2.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, THE FACT S AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. AS ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 3 PER THE ASSESSMENT ORDER, ON PAGE 2, THE ASSESSING OFFICER HAS LISTED THE DEFECTS FOUND IN THE BOOKS OF ACCOUN TS OF THE ASSESSEE WHICH INCLUDED NOT MAINTAINING SEPARATE BO OKS FOR CONTRACT BUSINESS, SALE BUSINESS AND PLANT RENTAL B USINESS, PAYMENTS TO LABOURER IN CASH WITH NO SUPPORTING EVI DENCES AND NON-MAINTENANCE OF MUSTER ROLL/ WAGES REGISTER EVIDENCING PAYMENT OF LABOUR. FOR THESE AND FURTHER DEFECTS DISCUSSED, THE BOOKS OF ACCOUNT WERE REJECTED UNDER SECTION 145(3) AND THE N.P. RATE WAS ADOPTED AT 8% BY THE A SSESSING OFFICER ON SALE OF RS.11,48,000/- AND GROSS CONTRAC T RECEIPTS OF RS. 7,88,40,577/-. IN THE PRESENT PROCEEDINGS, THE AUTHORISED REPRESENTATIVE SUBMITTED THAT THE AVERAGE PROFIT OF THE ASSESSEE FOR THE LAST FIVE YEARS IS 3.1% WHEREAS DU RING THE CURRENT YEAR THE SAME IS AT 3.45% WHICH IS HIGHER A ND HENCE, SHOULD BE ACCEPTED. IT WAS FURTHER SUBMITTED THAT T HE BOOKS OF ACCOUNTS HAVE BEEN AUDITED UNDER SECTION 44AB AN D MOST BILLS AND VOUCHERS HAVE BEEN MAINTAINED FOR THE ASS ESSMENT YEAR 2008-09 DURING THE COURSE OF SCRUTINY, THE N.P . RATE DECLARED AT 4.67% HAD BEEN REVISED BY THE ASSESSING OFFICER TO 5.5% WHICH WAS NOT APPEALED AGAINST BY THE ASSE SSEE AND IT WAS SUBMITTED THAT THIS WAS DUE TO HIS BAD HEALT H BY WHICH TIME THE TIME FOR APPEAL HAD EXPIRED. IN THE ASSESS MENT YEAR 2009-10, THE ASSESSING OFFICER HAD APPLIED A RATE O F 8% BEFORE INTEREST AND DEPRECIATION WHICH HAD BEEN REV ISED BY THE LD. CIT(A) TO 5.5% BEFORE ALLOWING INTEREST AND DEPRECIATION. THE ASSESSEE HAD GONE IN APPEAL AGAIN ST THE ORDER OF THE CIT (A) AND THE ITAT VIDE ITS ORDER D ATED 28- 04-2016 DISMISSED THE APPEAL OF THE ASSESSEE AND CO NFIRMED THE N.P. RATE AT 5.5% AS REASONABLE. THE RELEVANT P ORTION OF THE ORDER IS REPRODUCED BELOW:- WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE R ECORD. WHATEVER DEFICIENCY POINTED OUT BY THE ASSESSING OF FICER ARE SUFFICIENT TO REJECTION OF BOOKS OF ACCOUNT U/S 145 (3) OF THE ACT. AS DISCUSSED ABOVE, WHICH HAS BEEN UPHELD BY THE C IT (A) ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 4 ALSO. THE ASSESSEE HIMSELF ADMITTED THAT IN A.Y. 20 08-09, THE ASSESSEE'S CASE HAS BEEN ASSESSED N.P. RATE @ 5.5% IN SCRUTINY WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE. THER EFORE, PAST HISTORY OF THE CASE SUGGEST THAT THE N.P. RATE @ 5. 5% IS REASONABLE AS UPHELD BY THE LD. CIT(A) BEFORE DEPRE CIATION AND INTEREST. ACCORDINGLY, WE UPHOLD THE ORDER OF THE L D. CIT(A) AND REJECT THE ASSESSEE'S APPEAL ON REJECTION OF BOOKS OF ACCOUNTS U/S 145(3)OF THE ACT AND N.P. RATE DISCLOSED BY THE ASSESSEE. AFTER CONSIDERING BOTH THE SIDES, WE DO NOT FIND AN Y MERIT IN THE CASE OF ASSESSEE, AS SUCH NO CLAIM HAS BEEN MADE BEFORE THE LOWER AUTHORITIES AND THERE IS ALSO NO P AST HISTORY IN THE CASE OF ASSESSEE. THE CASE LAWS RELIED UPON BY THE ASSESSEE IS ALSO NOT SQUARELY APPLICABLE. ACCORDINGLY, WE DI SMISS THE APPEAL OF ASSESSEE ON THIS GROUND. CONSIDERING THAT THE NATURE OF CONTRACT WORK HAS LARGELY REMAINED THE SAME AS ALSO IN VIEW OF TH E DEFECTS IN THE BOOKS OF ACCOUNTS POINTED OUT BY THE ASSESSING OFFICER AND CONSIDERING THE PAST HISTORY OF THE CASE AS WELL AS THE DECISION OF HON'BLE ITAT FO R ASSESSMENT YEAR 2009-10 IN THE ASSESSEE'S OWN CASE, THE REJECTION OF BOOKS UNDER SECTION 145(3), IS UPH ELD AND THE N.P. RATE TO BE ADOPTED AT 5.5% BEFORE INTE REST AND DEPRECIATION. GROUND OF APPEAL IS DISMISSED. 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LOWER AUTHORITIES HAVE ERRED IN ERRED IN REJECT ING THE BOOKS OF ACCOUNTS AND APPLYING THE N.P. RATE OF 5.5% INSTEAD OF 3.45%. 2.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LD. CIT(A). 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE IS ENGAGED ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 5 IN THE BUSINESS OF CIVIL WORK IN THE NAME AND STYLE OF M/S. GOYAL SAVITRI INDUSTRIES. THE ASSESSEE HAS MAINLY CARRIED OUT CIV IL WORK ALLOTTED BY RHB, JDA, RICCO ETC. THE AO NOTED THAT DURING THE Y EAR UNDER CONSIDERATION, THE GROSS RECEIPTS FROM CIVIL WORK, SALES AND PLANT RENT HAVE BEEN SHOWN BY THE ASSESSEE AT RS. 7,82,40,517/- RS. 11,48,000/- AND RS. 12,48,450/- RESPECTIVELY RESULTING INTO TOTAL RECEI PT OF RS. 8,06,36,976/-. THE GROSS PROFIT IS OF RS. 69,81,789/- AND NET PROF IT IS OF RS. 27,42,819/- GIVING THE NET PROFIT RATE OF 3.40%. THE AO NOTED T HAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT COMPLETE AND DO NOT DEPICT CORRECT PICTURE OF THE BUSINESS. THUS NO TRUE AND CORRECT PROFITS O F THE ASSESSEE CAN BE ASCERTAINED FROM THE BOOKS OF ACCOUNT OF THE ASSESS EE. THE AO NOTED THAT THE ASSESSEE HAS NOT MAINTAINED STOCK REGISTER, PRO PER EVIDENCE REGARDING WAGES PAYMENT AND EXPENSES. THE AO THUS INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND APPLIED THE NET PROFI T OF 8% BY OBSERVING AS UNDER:- THUS THE CONTENTION OF THE ASSESSEE IS CAREFULLY C ONSIDERED BUT IS NOT FOUND TENABLE AND BY LOOKING INTO CIRCUMSTAN CES AND FACTS, I CONSIDER IT FAIR TO TAKE THE ENTIRE RECEIPTS FROM P LANT RENTAL AT RS. 12,48,450/- AS INCOME AND APPLY NET PROFIT RATE OF 8% ONLY ON SALE OF RS. 11,48,000/- AND GROSS CONTRACT RECEIPTS OF RS. 7,88,40,577/-. THE ABOVE ESTIMATION OF PROFIT HAS BEEN MADE SUBJECT TO DEDUCTION OF DEPRECIATION AND INTEREST TO BANKS. ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 6 IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE R EJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT AND ADOPTED THE N.P. RATE OF 5.5% BEFORE INTEREST AND DEPRECIATION IN VIEW OF THE DECISION O F ITAT DATED 28-04- 2016. (SUPRA). TAKING INTO CONSIDERATION THE ORDER OF THE LD. CIT(A) AND ALSO THE DECISION OF ITAT, JAIPUR BENCH (SUPRA), W E FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THUS GR OUND NO. 1 OF THE ASSESSEE IS DISMISSED. 3.1 APROPOS GROUND NO. 2 OF THE ASSESSEE, THE FACT S AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCE EDING, NOTICED THAT INCOME FROM RENT OF PLANT OF RS.12,48, 450/- WAS ALSO INCLUDED IN THE TOTAL TURNOVER. THE ASSESSEE C ONTENDED THAT THERE ARE EXPENSES TO BE INCURRED AND HENCE TH E SAME SHOULD ALLOWED. THE ASSESSING OFFICER DID NOT CONCU R AND TREATED THE INCOME AS INCOME FROM OTHER SOURCES AND THE SAME TREATMENT OF THIS INCOME HAD ALSO BEEN CONFIRM ED BY THE CIT (A)-2, JAIPUR IN THE ASSESSMENT YEAR 2009- 10. VIDE ITS ORDER DATED 28-04-2016, THE HON'BLE ITAT, JAIPU R HAS CONFIRMED THE STAND OF THE ASSESSING OFFICER AND TH E RELEVANT PORTION OF THE ORDER IS REPRODUCED AS FOLLOWS. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED MATERIAL AVAILABLE ON THE RECOR D. THE NATURE OF RECEIPTS IS FROM THE SCRAP SALE AND RENTA L INCOME FROM THE MACHINES, WHICH COMES UNDER THE HEAD INCOME FRO M OTHER SOURCES. THE LD.AR HAS NOT SUBSTANTIATED ANY ADDITI ONAL EXPENDITURE INCURRED ON MACHINERY, WHICH HAS NOT BE EN DEBITED IN THE P&L ACCOUNT. IT MEANS THE ASSESSEE ALREADY D EBITED THE ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 7 EXPENSES FOR EARNING THIS INCOME. THEREFORE, WE UPH OLD THE ORDER OF CIT(A), ACCORDINGLY, ON THIS GROUND, THE APPEAL OF THE ASSESSEE IS DISMISSED. IN VIEW OF THE ABOVE, THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 3.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN CONSIDERING THE MACHINE RY RENT CONTRACT OF RS. 12,48,450/- AS INCOME FROM OTHER SOURCES AND DID NO T CONSIDER IT AS A PART OF TURNOVER FOR APPLICATION OF NET PROFIT RATE. 3.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LD. CIT(A). 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE, THE AO TREATED T HE ENTIRE RECEIPT FROM PLANT RENTAL AT RS. 12,48,450/- AS INCOME AND APPLI ED THE NET PROFIT OF 8%. IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE A CTION OF THE AO TAKING INTO CONSIDERATION THE DECISION OF ITAT JAIPUR BENC H DATED 28-04- 2016.THE RELEVANT PORTION OF THE ORDER IS REPRODUCE D AS UNDER:- WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED MATERIAL AVAILABLE ON THE RECOR D. THE NATURE OF RECEIPTS IS FROM THE SCRAP SALE AND RENTA L INCOME FROM THE MACHINES, WHICH COMES UNDER THE HEAD INCOME FRO M OTHER SOURCES. THE LD.AR HAS NOT SUBSTANTIATED ANY ADDITI ONAL EXPENDITURE INCURRED ON MACHINERY, WHICH HAS NOT BE EN DEBITED IN THE P&L ACCOUNT. IT MEANS THE ASSESSEE ALREADY D EBITED THE ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 8 EXPENSES FOR EARNING THIS INCOME. THEREFORE, WE UPH OLD THE ORDER OF CIT(A), ACCORDINGLY, ON THIS GROUND, THE APPEAL OF THE ASSESSEE IS DISMISSED. SINCE THIS ISSUE HAS ALREADY BEEN DECIDED BY THE IT AT JAIPUR BENCH (SUPRA), THEREFORE, WE CONCUR WITH THE FINDINGS OF THE LD. CIT(A). THUS GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 4.1 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE VIDE LETTER DATED 5-03-2018 HAS PRAYED FOR ADMISSION OF FOLLOWI NG ADDITIONAL GROUND AS GROUND NO. 3 WHICH COULD NOT BE TAKEN UP WHILE F ILING THE GROUNDS OF APPEAL FOR THE ASSESSMENT YEAR 2012-13. GROUND NO. 3: THE LD. AO AND LD. CIT (A) HAS ERRED IN LAW AS WELL AS IN FACT NOT ALLOWING DEDUCTION OF SALES TAX FROM N.P. RATE. ONLY INTEREST AND DEPRECIATION WERE ALLOWED AS DEDU CTION WHEREAS JURISDICTIONAL HIGH COURT HAS ALSO ALLOWED DEDUCTIO N OF SALES TAX ALONGWITH INTEREST AND DEPRECIATION FROM N.P. RATE. 4.2 ON THE OTHER HAND, THE LD. DR OBJECTED TO THE R AISING OF ADDITIONAL GROUND BY THE LD.AR OF THE ASSESSEE. 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE BENCH CONSIDERED IT APPROP RIATE TO ALLOW THE PRAYER OF THE LD.AR OF THE ASSESSEE TO RAISE THE AD DITIONAL GROUND. THE BENCH NOTED THAT ONCE THE BOOKS OF ACCOUNT OF THE A SSESSEE HAS BEEN REJECTED AND SUSTAINED BY THE LD. CIT(A) AND NET IN COME HAS BEEN ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 9 ESTIMATED THEN THERE IS NO ANY FURTHER SCOPE FOR D EDUCTION ON ACCOUNT OF INTEREST, DEPRECIATION, VAT ETC. IT IS ALSO PERTINE NT TO MENTION THAT THE LD. CIT(A) HAS ALREADY GRANTED RELIEF OUT OF 5.5% N.P. RATE ESTIMATED. HOWEVER, REVENUE HAS NOT FILED ANY APPEAL AGAINST S UCH RELIEF. IN THIS VIEW OF THE MATTER, THE GROUND NO. 3 OF THE ASSESSE E IS DISMISSED. 5.0 NOW WE TAKE UP THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2013-14 FOR ADJUDICATION. 6.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. AS PER THE ASSESSMENT ORDER, ON PAGE 1, THE ASSESSING OFFICER HAS LISTED THE DEFECTS FOUND IN THE BOOKS OF ACCOUN TS OF THE ASSESSEE WHICH INCLUDED NOT MAINTAINING DAY TO DAY STOCK REGISTER, SITEWISE STOCK REGISTER, SEPARATE ACCOUNT S FOR EACH OF THE CONTRACT WORK, WAGES BEING PAID IN CASH AND NO SUPPORTING VOUCHERS ARE MAINTAINED AND NON-MAINTENA NCE OF MUSTER ROLL/ WAGES REGISTER EVIDENCING PAYMENT OF L ABOUR. FOR THESE AND FURTHER DEFECTS DISCUSSED, THE BOOKS OF ACCOUNT WERE REJECTED UNDER SECTION 145(3) AND THE N.P. RAT E WAS ADOPTED AT 8% BY THE ASSESSING OFFICER ON PLANT REN T OF RS. 6,87,006/- AND GROSS CONTRACT RECEIPTS OF RS. 9,53, 91,581/- IN THE PRESENT PROCEEDINGS, THE AUTHORISED REPRESENTATIVE SUBMITTED THAT THE AVERAGE PROFIT OF THE ASSESSEE FOR THE LAST FIVE YEARS IS 3.25% WHEREAS D URING THE CURRENT YEAR THE SAME IS AT 3.30% WHICH IS HIGHER A ND HENCE, SHOULD BE ACCEPTED. IT WAS FURTHER SUBMITTED THAT T HE BOOKS OF ACCOUNTS HAVE BEEN AUDITED UNDER SECTION 44AB AN D MOST ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 10 BILLS AND VOUCHERS HAVE BEEN MAINTAINED. IN THIS CA SE THE ISSUE OF APPLYING THE APPROPRIATE PROFIT OF PERCENT AGE RATE HAS BEEN COMING UP SINCE ASSESSMENT YEAR 2008-09. F OR THE ASSESSMENT YEAR 2008-09 DURING THE COURSE OF SCRUTI NY, THE N.P. RATE DECLARED AT 4.67% HAD BEEN REVISED BY THE ASSESSING OFFICER TO 5.5% WHICH WAS NOT APPEALED A GAINST BY THE ASSESSEE AND IT WAS SUBMITTED THAT THIS WAS DUE TO HIS BAD HEALTH BY WHICH TIME THE TIME FOR APPEAL HAD EX PIRED. IN THE ASSESSMENT YEAR 2009-10, THE ASSESSING OFFICER HAD APPLIED A RATE OF 8% BEFORE INTEREST AND DEPRECIATI ON WHICH HAD BEEN REVISED BY THE LD. CIT(A) TO 5.5% BEFORE A LLOWING INTEREST AND DEPRECIATION. THE ASSESSEE HAD GONE IN APPEAL AGAINST THE ORDER OF THE CIT (A) AND THE ITAT VIDE ITS ORDER DATED 28-04-2016 DISMISSED THE APPEAL OF THE ASSESS EE AND CONFIRMED THE N.P. RATE AT 5.5% AS REASONABLE. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED BELOW:- WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE R ECORD. WHATEVER DEFICIENCY POINTED OUT BY THE ASSESSING OF FICER ARE SUFFICIENT TO REJECTION OF BOOKS OF ACCOUNT U/S 145 (3) OF THE ACT. AS DISCUSSED ABOVE, WHICH HAS BEEN UPHELD BY THE C IT (A) ALSO. THE ASSESSEE HIMSELF ADMITTED THAT IN A.Y. 20 08-09, THE ASSESSEE'S CASE HAS BEEN ASSESSED N.P. RATE @ 5.5% IN SCRUTINY WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE. THER EFORE, PAST HISTORY OF THE CASE SUGGEST THAT THE N.P. RATE @ 5. 5% IS REASONABLE AS UPHELD BY THE LD. CIT(A) BEFORE DEPRE CIATION AND INTEREST. ACCORDINGLY, WE UPHOLD THE ORDER OF THE L D. CIT(A) AND REJECT THE ASSESSEE'S APPEAL ON REJECTION OF BOOKS OF ACCOUNTS U/S 145(3)OF THE ACT AND N.P. RATE DISCLOSED BY THE ASSESSEE. AFTER CONSIDERING BOTH THE SIDES, WE DO NOT FIND AN Y MERIT IN THE CASE OF ASSESSEE, AS SUCH NO CLAIM HAS BEEN MADE BEFORE THE LOWER AUTHORITIES AND THERE IS ALSO NO P AST HISTORY IN THE CASE OF ASSESSEE. THE CASE LAWS RELIED UPON BY THE ASSESSEE IS ALSO NOT SQUARELY APPLICABLE. ACCORDINGLY, WE DI SMISS THE APPEAL OF ASSESSEE ON THIS GROUND. CONSIDERING THAT THE NATURE OF CONTRACT WORK HAS LARGELY REMAINED THE SAME AS ALSO IN VIEW OF THE DE FECTS IN ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 11 THE BOOKS OF ACCOUNTS POINTED OUT BY THE ASSESSING OFFICER AND CONSIDERING THE PAST HISTORY OF THE CASE AS WEL L AS THE DECISION OF HON'BLE ITAT FOR ASSESSMENT YEAR 2009-1 0 IN THE ASSESSEE'S OWN CASE, THE REJECTION OF BOOKS UND ER SECTION 145(3), IS UPHELD AND THE N.P. RATE TO BE ADOPTED A T 5.5% BEFORE INTEREST AND DEPRECIATION. GROUND OF APPEAL IS PARTLY ALLOWED 6.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IMPERATIVE TO REPEAT THE ISSUE AS THE LD. CIT(A) HAS APPLIED THE NET PROFIT RATE OF 5.5% BEFO RE INTEREST AND DEPRECIATION IN VIEW OF THE DECISION OF ITAT JAIPUR BENCH DATED 28-04- 2016 (SUPRA). IN THIS VIEW OF THE MATTER, WE CONCUR WITH THE FINDINGS OF THE LD. CIT(A). THUS GROUND NO. 1 OF THE ASSESSEE I S DISMISSED. 7.1 THE ASSESSEE HAS RAISED THE GROUND NO. 2 AS UND ER:- 2. THE AO AND LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN FACT NOT ALLOWING DEDUCTION OF SALES TAX FROM NP RA TE. ONLY INTEREST AND DEPRECIATION WERE ALLOWED AS DEDUCTION S WHEREAS JURISDICTIONAL HIGH COURT HAS ALLOWED DEDUCTION OF SALES TAX ALONGWITH INTEREST AND DEPRECIATION FROM N.P. RATE. 7.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE BENCH NOTED THAT ONCE THE BOOKS OF ACCOUNT OF THE ASSESSEE HAS BEEN REJECTED AND SUSTAINED BY THE LD. CIT(A) AND NET INCOME HAS BEEN ESTIMATED THEN THERE IS NO ANY FURT HER SCOPE FOR DEDUCTION ON ACCOUNT OF INTEREST, DEPRECIATION, VAT ETC. IT IS ALSO ITA NO.789/JP/2016 SHRI RAJ KU MAR GUPTA. VS ITO, WARD- 6(5) ,JAIPUR 12 PERTINENT TO MENTION THAT THE LD. CIT(A) HAS ALREAD Y GRANTED RELIEF OUT OF 5.5% N.P. RATE ESTIMATED. HOWEVER, REVENUE HAS NOT FILED ANY APPEAL AGAINST SUCH RELIEF. IN THIS VIEW OF THE MATTER, TH E GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 8.0 IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 -04-2018 . SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09 /04/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAJ KUMAR GUPTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 6(5), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.789/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR