Dy. Commissioner of Income Tax, Lucknow V. Suman Singh, Lucknow

ITA 799/LKW/2014

• Counselvise Citation: 79923714 RSA 2014
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 29-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWATI RATNA
• Assessee Lawyers: K R RASTOGI
• Keywords: Bogus purchase
• Section: 44AD; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.799/LKW/2014 ASSESSMENT YEAR:2010-11 ACIT RANGE 1 LUCKNOW V. SUMAN SINGH LUCKNOW TAN/PAN:BIAPS8913D (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. SWATI RATNA, D.R. RESPONDENT BY: SHRI. K. R. RASTOGI, C.A. DATE OF HEARING: 02 07 2015 DATE OF PRONOUNCEMENT: 27 08 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.2,44,87,614/- IN RESPECT OF SUNDRY CREDITORS, WHICH REMAINED UNVERIFIED AND IN RESTRICTING THE ESTIMATE OF PROFIT OF THE APPELLANT TO 7.5% OF GROSS RECEIPTS ON THE BASIS OF PAST HISTORY OF THE CASE OF THE ASSESSEE. HE FAILED TO APPRECIATE THAT HUGE UNVERIFIED CREDITORS SHOWN AS OUTSTANDING IN THE BALANCE SHEET ARE AN EXTENSION OF BOGUS PURCHASES CLAIMED IN THE P&L A/C, WHICH HAS A DIRECT BEARING ON THE NET PROFIT OF THE ASSESSEE. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.25,83,748/- AGAINST ADDITION OUT OF PURCHASES AS THE PURCHASES WERE NOT FULLY VERIFIABLE. :- 2 -: 2. APROPOS GROUND NO.1, IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED FROM THE BALANCE SHEET THAT OUT OF LIABILITIES AMOUNTING TO RS.2,48,96,412/-, THE PAYMENTS OF RS.2,44,87,614/- PERTAIN TO SUB-CONTRACTORS. THE ASSESSEE PROVIDED LIST OF 1050 SUB-CONTRACTORS GIVING THEIR NAMES & ADDRESSES, GROSS AMOUNT PAYABLE, AMOUNT PAID AND PAYMENT DUE TO THEM, TO THE ASSESSING OFFICER. OUT OF 1050, NOTICES WERE ISSUED TO 44 PERSONS BY THE ASSESSING OFFICER ON RANDOM BASIS AND 36 NOTICES WERE RETURNED BACK WITH THE POSTAL REMARK THAT THE PERSONS DID NOT RESIDE AT THE GIVEN ADDRESS. IN ONE CASE, NOTICE WAS SERVED UPON SHRI. SANJAI KUMAR WHO DENIED HAVING ANY TRANSACTION WITH THE ASSESSEE AND IN CERTAIN NOTICES THOUGH SERVED BUT NO REPLY WAS RECEIVED. ON BEING CONFRONTED BY THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT THE ADDRESSES GIVEN BY HIM ARE THE SAME AS PROVIDED BY THE SUB-CONTRACTORS AND THE PETTY CONTRACTORS WERE PAID THE AMOUNT IN DUE COURSE OF BUSINESS DEPENDING UPON THE AVAILABILITY OF FUNDS. THE ASSESSING OFFICER FOUND IT IS INCOMPREHENSIBLE THAT THE PAYMENTS TO PETTY LABOURERS/SUB-CONTRACTORS REMAINED UNPAID FOR SUCH A LONG PERIOD AND TREATED THE TOTAL AMOUNT OF RS.2,44,87,614/- SHOWN AS PAYABLE TO SUB-CONTRACTORS AS BOGUS AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNT AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE BOOKS OF ACCOUNT, BILLS, VOUCHERS AND OTHER DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER. IT WAS ALSO SUBMITTED THAT ALL THE WORKS WERE EXECUTED UNDER DIRECT CONTROL AND SUPERVISION OF THE SENIOR OFFICERS OF NORTHERN RAILWAY WHICH WERE MEASURED, VERIFIED AND ONLY AFTER THEIR APPROVAL, PAYMENTS WERE MADE. HENCE IT CANNOT BE HELD THAT THE WORKS WERE NOT EXECUTED OR EXPENSES WERE NOT VERIFIABLE. IT WAS FURTHER CONTENDED BEFORE THE LD. :- 3 -: CIT(A) THAT THE ASSESSEE WAS REQUIRED TO MAKE PAYMENT IN ADVANCE FOR PROCURING MATERIALS WHICH RESULTS INTO BLOCKING OF FUNDS AND SOME TIME PAYMENTS RECEIVED FROM RAILWAYS ALSO GET DELAYED AND DUE TO NON- AVAILABILITY OF FUNDS , THE PAYMENTS TO LABOURERS ARE MADE IN SUBSEQUENT YEAR FOR THE WORK EXECUTED IN LAST MONTH OF THE YEAR. IT WAS FURTHER CONTENDED THAT THE DUES WERE CLEARED IN SUCCEEDING MONTHS I.E. APRIL AND MAY, 2010 IMMEDIATELY AFTER REALIZING THE PAYMENTS. IT WAS FURTHER CONTENDED THAT NOTICES WERE ISSUED TO 44 PERSONS ON RANDOM BASIS TO WHOM PAYMENTS WERE DUE OF RS.9,81,613/-, THEREFORE, IF THE CONTENTION OF THE ASSESSING OFFICER IS TO BE ACCEPTED, ONLY DISALLOWANCE CAN BE MADE TO THE EXTENT OF RS.9,81,613/- AND NOT THE ENTIRE PAYMENT. 4. THE LD. CIT(A) RE-EXAMINED THE ISSUE IN THE LIGHT OF ASSESSEES CONTENTIONS AND BEING CONVINCED WITH IT, HE DELETED THE ADDITION. HE, HOWEVER, ESTIMATED THE PROFIT FOR THE ASSESSEE AT 7.5% OF THE GROSS RECEIPTS OF RS.6,74,52,799/-. ACCORDINGLY THE ADDITION WAS RESTRICTED TO RS.9,63,634/-. 5. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT WHEN THE ASSESSEE COULD NOT PROVE THE OUTSTANDING LIABILITIES AT THE END OF THE YEAR BY PLACING RELEVANT EVIDENCE, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION OF THE SAME; WHEREAS THE LD. CIT(A) WITHOUT ANY COGENT REASON HAS DELETED THE ADDITION. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT THE REVENUE HAS NOT DOUBTED THE NATURE OF BUSINESS OF THE ASSESSEE AND ONCE IT IS ADMITTED THAT THE ASSESSEE IS A CONTRACTOR WORKING FOR THE NORTHERN RAILWAY, THE EXPENDITURES ARE BOUND TO BE INCURRED IN EXECUTION OF TENDER ISSUED BY THE NORTHERN RAILWAY. THE ASSESSING OFFICER HAS MADE A SIMPLE CHECK ON RANDOM BASIS AND AT THE MOST ADDITION CAN BE MADE WITH RESPECT TO THOSE CASES IN WHICH NOTICES :- 4 -: WERE ISSUED, BUT THE ENTIRE LIABILITIES CANNOT BE DISALLOWED FOR THE SAME REASON. IT WAS FURTHER CONTENDED THAT THE PAYMENT COULD NOT HAVE BEEN MADE ON ACCOUNT OF RECEIPT OF DELAYED PAYMENTS FROM THE RAILWAYS. HOWEVER, OUTSTANDING LIABILITIES WERE CLEARED IN SUCCEEDING MONTHS AND THESE FACTS ARE NOT DISPUTED BY THE REVENUE AUTHORITIES. THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS TAKEN COGNIZANCE OF ALL THE RELEVANT FACTS WHILE DELETING THE ADDITION. THE LD. CIT(A), HOWEVER, ESTIMATED THE PROFIT OF THE ASSESSEE BY APPLYING 7.5% RATE OF THE GROSS RECEIPTS. 7. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE NATURE OF ACTIVITIES UNDERTAKEN BY THE ASSESSEE WAS NOT DISPUTED BY THE REVENUE. THE REVENUE HAS ALSO NOT DISPUTED THE CONTRACT RECEIPTS RECEIVED BY THE ASSESSEE. THEREFORE, IN EXECUTION OF WORK, CERTAIN EXPENSES ARE BOUND TO BE INCURRED. THE DISPUTE WAS RAISED WITH REGARD TO THE OUTSTANDING LIABILITIES AT THE END OF THE YEAR, FOR WHICH ASSESSEE HAS CONTENDED THAT ON ACCOUNT OF DELAYED RECEIPT OF PAYMENT FROM NORTHERN RAILWAY, PAYMENT TO SUB-CONTRACTOR OR PAID CONTRACTOR COULD NOT BE MADE BY THE END OF THE FINANCIAL YEAR, BUT IT WAS MADE IN SUCCEEDING YEAR. THIS CONTENTION WAS NOT DISPUTED BY THE REVENUE AUTHORITIES. THESE FACTS WERE TAKEN INTO ACCOUNT BY THE LD. CIT(A) WHILE ADJUDICATING THE ISSUE AND FOR THE SAKE OF REFERENCE, WE EXTRACT THE RELEVANT PORTION OF THE ORDER OF THE LD. CIT(A) AS UNDER:- 3.3 I HAVE CONSIDERED THE MATTER AND EXAMINED THE DOCUMENTS/EVIDENCES FURNISHED BY THE APPELLANT HI RESPECT OF CIVIL WORK CONTRACT, THE APPELLANT HAS DISCLOSED NET PROFIT OF RS.40,95,326/- @ 6.07% ON TURNOVER OF RS.6,74,52,799/-. IT IS NOTED THAT THE APPELLANT HAS CLAIMED PAYMENT TO SUBCONTRACTORS AT RS.5,59,87,389/-IN THE PROFIT AND LOSS ACCOUNT OUT OF WHICH AMOUNT OF RS.2,44,87,614/- HAS REMAINED OUTSTANDING AT THE END :- 5 -: OF THE YEAR. THE ENTIRE OUTSTANDING LIABILITY HAS BEEN PAID IN THE MONTHS OF APRIL & MAY, 2010 IN THE SUBSEQUENT FINANCIAL YEAR. IT IS NOTED THAT THE AO HAS CONDUCTED ENQUIRIES WITH 44 PERSONS OUT OF THE LIST OF 1050 SUBCONTRACTORS AND DISALLOWED THE ENTIRE LABOUR CHARGES PAYABLE OF RS.2,44,87,614/- WHEREAS THE AMOUNT PAYABLE TO THESE 44 PERSONS AMOUNTED TO RS.9,81,613/- ONLY. IT IS ALSO NOTED THAT IF THE DISALLOWANCE MADE BY THE AO IS TAKEN INTO ACCOUNT THE NET PROFIT RATE WILL INCREASE TO 46.20% WHICH IS NOT POSSIBLE IN THE CASE OF A CONTRACTOR. HOWEVER, THE ARGUMENT OF THE AO THAT THE LABOURERS WHO ARE SURVIVING ON DAY TO DAY BASIS CANNOT KEEP THE PAYMENTS PENDING FOR MORE THAN ONE YEAR IS PLAUSIBLE. IN THE CASE OF THE APPELLANT IT IS NOTED THAT ABOUT 45% OF SUCH PAYMENTS DEBITED IN THE PROFIT AND LOSS ACCOUNT REMAINED OUTSTANDING AT THE END OF THE YEAR. FURTHER, THE APPELLANT IS ALSO NOT JUSTIFIED IN TAKING THE PLEA THAT HE IS NOT REQUIRED TO VERIFY THE ADDRESSES OF THE LABOURERS AND IT IS NOT HIS DUTY TO MAINTAIN SUCH RECORD. IT MAY BE MENTIONED THAT IN RESPECT OF EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT THE PRIMARY ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE EXPENSES. IN THE CASE OF THE APPELLANT A LARGE PORTION OF LABOUR CHARGES HAS BEEN SHOWN AS OUTSTANDING OUT OF WHICH ON ENQUIRY 44 LABOURERS WERE NOT FOUND AT THE GIVEN ADDRESSES HENCE THE GENUINENESS OF SUCH PAYMENTS REMAINED UNVERIFIABLE. HOWEVER THE APPELLANT'S ARGUMENT THAT 45% LABOUR CHARGES DEBITED IN THE PROFIT AND LOSS ACCOUNT CANNOT BE TREATED AS BOGUS THAT TOO ONLY ON THE BASIS OF ENQUIRIES CONDUCTED FROM 44 PERSONS IS ALSO FOUND TO BE JUSTIFIED. ALSO NET PROFIT RATE OF 46.20% ASSESSED BY THE AO IS VERY HIGH IN THE CASE OF A CONTRACTOR. IN VIEW OF THE DISCUSSIONS MADE ABOVE IT IS HELD THAT THE BEST OPTION AVAILABLE TO THE AO WAS TO REJECT THE BOOK RESULTS SINCE HE COULD NOT HAVE SATISFIED HIMSELF ABOUT THE CORRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND THE ONLY ALTERNATIVE AVAILABLE WAS TO COMPLETE THE ASSESSMENT IN THE :- 6 -: MANNER PROVIDED UNDER SECTION 144 OF THE ACT IN VIEW OF PROVISIONS OF SECTION 145(3) OF THE ACT IN THE CASE OF DHONDIRAM DALICHANDY. GIT, 81ITR 609 (BOM.) THE HON'BLE HIGH COURT HAS HELD THAT WHILE EXERCISING THE POWERS U/S!45OFTHE ACT IT IS NOT NECESSARY FOR REVENUE AUTHORITIES TO RECORD AFORESAID FINDINGS IN SPECIFIC WORDS BEFORE EXERCISING POWER, PARTICULARLY IN VIEW OF THE FACT THAT CIRCUMSTANCES OF CASE OTHERWISE JUSTIFIED INVOKING OF SAID POWER. 3.4 HAVING SAID THAT, I FIND THAT THE PROVISIONS OF SECTION 44AD OF THE ACT ESTIMATING THE PROFIT OF CONTRACTOR @ 8% OF THE TURNOVER ARE APPLICABLE FOR CIVIL CONTRACTORS ADOPTING THE PRESUMPTIVE SCHEME OF TAXATION AND THE SCOPE OF THE SECTION IS LIMITED TO CONTRACTORS WHOSE TURNOVER DOES NOT EXCEED RS.40 LAKH. IN THE CASE OF THE APPELLANT, THE GROSS RECEIPTS IS RS.6,74,52,799/-. HENCE, THE SAID PROVISIONS ARE NOT APPLICABLE TO THE APPELLANT. IN CIT V. LAXMINARAIN BADRIDAS [1937] 5TTR 170 (PC) THEIR LORDSHIPS OF THE PRIVY COUNCIL OBSERVED AS FOLLOWS: 'THE OFFICER IS TO MAKE AN ASSESSMENT TO THE BEST OF HIS JUDGLMENL AGAINST A PERSON WHO IS IN DEFAULT AS REGARDS SUPPLYING INFORMATION. HE MUST NOT ACT DISHONESTLY OR VINDICTIVELY OR CAPRICIOUSLY BECAUSE HE MUST EXERCISE JUDGMENT IN THE MATTER. HE MUST MAKE WHAT HE HONESTLY BELIEVES TO BE A FAIR ESTIMATE OF THE PROPER FIGURE OF ASSESSMENT, AND FOR THIS PURPOSE HE MUST, THEIR LORDSHIPS THINK, BE ABLE TO TAKE INTO CONSIDERATION LOCAL KNOWLEDGE AND REPUTE IN REGARD TO THE ASSESSEE'S CIRCUMSTANCES, AND HIS OWN KNOWLEDGE OF PREVIOUS RETURNS BY AND ASSESSMENTS OF THE ASSESSEE, AND ALL OTHER MATTERS WHICH HE THINKS WILL ASSIST HIM IN ARRIVING AT A FAIR AND PROPER ESTIMATE; AND THOUGH THERE MUST NECESSARILY BE GUESSWORK IN THE MATTER, IT MUST BE HONEST GUESSWORK. IN THAT SENSE, TOO, THE ASSESSMENT MUST BE, TO SOME EXTENT, ARBITRARY.' :- 7 -: SINCE THE LAW RELATING TO 'BEST JUDGMENT ASSESSMENT' IS THE SAME BOTH IN THE CASE OF INCOME-TAX ASSESSMENT AND SALES TAX ASSESSMENT, THE FOLLOWING OBSERVATIONS IN RAGHUBAR MANDAL HARIHAR MANDAL V. STATE OF BIHAR [1957] 8 STC 770 , 778 (SQ, A CASE UNDER THE BIHAR SALES TAX ACT, WOULD BE MATERIAL: *NO DOUBT IT IS TRUE THAT WHEN THE RETURNS AND THE BOOKS OF ACCOUNT ARE REJECTED, THE ASSESSING OFFICER MUST MAKE AN ESTIMATE, AND TO THAT EXTENT HE MUST MAKE A GUESS; BUT THE ESTIMATE MUST.BE RELATED TO SOME EVIDENCE OR MATERIAL AND IT MUST BE SOMETHING MORE THAN MERE SUSPICION.' AGAIN IN STATE OF KERALA V. G VELOKUTTY [1966] 60 TTR 239 (SC), WHICH WAS A CASE UNDER THE TRAVANCORE-COCHIN GENERAL SALES TAX ACT, THE COURT OBSERVED: 'THE LIMITS OF THE POWER ARE IMPLICIT IN THE EXPRESSION 'BEST OF HIS JUDGMENT'. JUDGMENT'S A FACULTY TO DECIDE MATTERS WITH WISDOM TRULY AND LEGALLY. JUDGMENT DOES NOT DEPEND UPON THE ARBITRARY CAPRICE OF A JUDGE, BUT ON SETTLED AND INVARIABLE PRINCIPLES OF JUSTICE. THOUGH THERE IS AN ELEMENT OF GUESSWORK IN A 'BEST JUDGMENT ASSESSMENT', IT SHALL NOT BE A WILD ONE, BUT SHALL HAVE A REASONABLE NEXUS TO THE AVAILABLE MATERIAL AND THE CIRCUMSTANCES OF EACH CASE.' IT IS EVIDENT FROM WHAT HAS BEEN STATED ABOVE THAT THE AUTHORITY MAKING A BEST JUDGMENT ASSESSMENT MUST MAKE AN HONEST AND FAIR ESTIMATE OF INCOME OF ASSESSEE AND THOUGH ARBITRARINESS CANNOT BE AVOIDED IN SUCH ESTIMATE THE SAME MUST NOT BE CAPRICIOUS BUT SHOULD HAVE A REASONABLE NEXUS TO THE AVAILABLE MATERIAL, CIRCUMSTANCES OF THE CASE AND BUSINESS OF THE APPELLANT. THE APPELLANT IN THE IMPUGNED ASSESSMENT YEAR HAS DECLARED NET PROFIT RATE OF 6.07% WHEREAS IN THE PRECEDING YEAR IT WAS 5.48% ONLY. HOWEVER, PAST HISTORY OF THE CASE OF THE APPELLANT CANNOT BE RELIED UPON AS RETURNS FILED FOR THE PRECEDING YEAR HAS NOT BEEN SUBJECT MATTER OF SCRUTINY. THE HON'BLE 1TAT, :- 8 -: LUCKNOW SMC BENCH IN ITA NO. 574/LUC/05 DATED 10.03.2006 IN THE CASE OF M/S GUPTA CONSTRUCTIONS HAS CONFIRMED THE ACTION OF AO IN ESTIMATING THE PROFIT AT @ 7% OF TOTAL TURNOVER. THE ITAT ALLAHABAD BENCH IN CASE OF RAJESH KUMAR SINGH, GORAKHPUR V. ITO IN ITA NO. 425/ALLD/2003 FOR AY 2000-01 DATED 25.06.2004 HAS UPHELD THE APPLICATION OF NET PROFIT RATE OF 7.5%. IN THE CASE OF ACJT V. RAJ BROS, REPORTED IN 2009 (13) MTC 88 (TRIB.) BY THE APPELLANT THE HON'BLE ITAT, ALLAHABAD BENCH HAS DIRECTED THE AO TO APPLY NET PROFIT RATE OF 9.6% IN .THE CASE OF A CONTRACTOR WHOSE TURNOVER IS RS.10 CRORE. IN VIEW OF THE ABOVE DISCUSSIONS AND CONSIDERING THE FACT THAT THE TURNOVER OF THE APPELLANT IS RS.6,74,52,799/-, I AM OF THE CONSIDERED OPINION THAT IT WOULD BE REASONABLE TO ESTIMATE THE PROFITS OF THE APPELLANT AT RS.50,58,960/- @ 7.5% OF GROSS RECEIPTS OF RS.6,74,52,799/-. ACCORDINGLY, OUT OF ADDITION MADE OF RS.2,44,87,614/- ADDITION TO THE EXTENT OF RS.9,63,634/- (RS750,58,960 - 40,95,326/-) IS CONFIRMED. 8. WE ALSO FIND FORCE IN THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT ONLY ON THE BASIS OF SAMPLE CHECK ON RANDOM BASIS THE ENTIRE LIABILITIES CANNOT BE TREATED TO BE BOGUS LIABILITIES. AT THE MOST, THE ASSESSING OFFICER IF INTENDED TO MAKE AN ADDITION ON THE BASIS OF RANDOM CHECK, IT CAN ONLY BE RESTRICTED AT RS.9,13,613/-, BUT THE ENTIRE OUTSTANDING LIABILITIES CANNOT BE TREATED TO BE BOGUS ON THE BASIS OF SAMPLE CHECK. BUT IN ANY CASE, THE LD. CIT(A) HAS ESTIMATED THE PROFIT OF THE ASSESSEE @ 7.5% OF THE GROSS RECEIPTS RESULTING INTO AN ADDITION OF RS.9,63,634/-. WE HAVE ALSO CAREFULLY EXAMINED THE FINDINGS OF THE LD. CIT(A) AND WE FIND THAT THE LD. CIT(A) HAS PROPERLY ADJUDICATED THE ISSUE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. SINCE WE FIND NO INFIRMITY THEREIN, WE CONFIRM HIS ORDER ON THIS ISSUE. :- 9 -: 9. WITH REGARD TO GROUND NO.2, IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THE PURCHASES AMOUNTING TO RS.1,78,63,188/- RELATING TO CONTRACT WORK, CONSUMABLES AMOUNTING TO RS.66,73,750/- AND MATERIAL SHIFTING CHARGES AMOUNTING TO RS.13,00,538/-. THE ASSESSING OFFICER MADE DISALLOWANCE OF 10% HAVING OBSERVED THAT THE ASSESSEE HAS NOT MAINTAINED COMPLETE BILLS AND VOUCHERS AND MADE ADDITION OF RS.25,83,748/-, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THESE ADDITIONS ARE MADE ON AD-HOC BASIS WITHOUT POINTING OUT ANY DEFECT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IT WAS FURTHER CONTENDED THAT THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNT AND FURNISHED COMPLETE DETAILS BEFORE THE ASSESSING OFFICER BUT WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE MAINTENANCE OF THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER HAS MADE DISALLOWANCE ON AD HOC BASIS. FINDING FORCE IN THE CONTENTIONS OF THE ASSESSEE, THE LD. CIT(A) HAS DELETED THE ADDITION. 10. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL, BUT COULD NOT PLACE ANY EVIDENCE TO JUSTIFY THAT THE ASSESSEE HAS NOT MAINTAINED COMPLETE DETAILS SUCH AS BILLS AND VOUCHERS FOR PURCHASES. SINCE NO SPECIFIC DEFECT WAS POINTED OUT BY THE ASSESSING OFFICER, WE FIND NO MERIT IN THE DISALLOWANCE. ACCORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE WHO HAS RIGHTLY DELETED THE ADDITION. 11. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER :- 10 -: DATED:27 TH AUGUST, 2015 JJ:2008 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR