DCIT, Sangrur V. M/s Krishna Construction Co, Sangrur

ITA 805/CHANDI/2014

• Counselvise Citation: 80521514 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 18-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: SUDHIR SEHGAL
• Keywords: Rejection of books of accounts; Business income
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER & MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 805/CHD/2014 ASSESSMENT YEAR: 2010-11 THE DCIT, VS. M/S KRISHNA CONSTRUCTION CO. CIRCLE 1 ST FLOOR, KRISHNA VEHICLES SANGRUR MEHLAN ROAD SANGRUR PAN NO. AAGFJ5614C & C.O. NO.44/CHD/2014 (IN ITA NO. 805/CHD/2014) ASSESSMENT YEAR: 2010-11 M/S KRISHNA CONSTRUCTION CO, VS. THE DCIT, 1 ST FLOOR, KRISHNA VEHICLES CIRCLE MEHLAN ROAD SANGRUR SANGRUR PAN NO. AAGFJ5614C (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANJIT SINGH RESPONDENT BY : SH. SUDHIR SEHGAL DATE OF HEARING : 02.09.2015 DATE OF PRONOUNCEMENT : 28/10/2015 ORDER PER ANNAPURNA MEHROTRA, A.M THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTIONS BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), PATIALA D ATED 31.07.2014 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS A CIVIL CONTRACTOR. DURING ASSESSMENT PROCEEDINGS, THE A.O. REJECTED TH E BOOKS OF ACCOUNTS OF THE 2 ASSESSEE U/S 145(3) OF THE ACT AND ESTIMATED NET PR OFIT @ 10% OF THE GROSS RECEIPTS AND AFTER ALLOWING INTEREST AND SALARY TO THE PARTNERS, COMPUTED THE INCOME OF THE ASSESSEE. THE MATTER WAS CARRIED IN A PPEAL BEFORE THE LD. CIT(A), WHO UPHELD THE REJECTION OF BOOKS OF ACCOUNTS BUT R EDUCED THE NET PROFIT RATE APPLIED TO 5% OF GROSS RECEIPTS. AGGRIEVED BY THE S AME, THE REVENUE HAS CHALLENGED THE REDUCTION OF THE NET PROFIT RATE FRO M 10% TO 5% WHILE THE ASSESSEE IN CROSS OBJECTION HAS CHALLENGED THE ORDE R OF THE LD. CIT(A) IN CONFIRMING THE REJECTION OF BOOKS OF ACCOUNTS AND A PPLICATION OF NET PROFIT RATE OF 5%. 3. WE SHALL FIRST TAKE UP THE ISSUE OF REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE INCOME TAX ACT, 1961 RAISED IN THE CROSS OBJ ECTION FILED BY THE ASSESSEE. 4. THE FACTS OF THE CASE ARE THAT THE AO REJECTED T HE BOOKS OF ACCOUNTS FOR THE REASON THAT THE PURCHASE REGISTER FOR MATERIAL SUCH AS DIESEL, CEMENT, BRICKS BAJRI, IRON GOODS, MITTI, WOODS ETC. HAD NOT BEEN M AINTAINED. NO STOCK REGISTER OF SUCH MATERIALS WERE MAINTAINED AND NO REGISTER FOR ISSUE OF DAY TO DAY MATERIAL FOR CONSTRUCTION WAS MAINTAINED. THE COMPLETE DETAI LS OF THE EMPLOYEES WAS NOT MENTIONED IN THE MUSTER ROLLS. THE MEASUREMENT BOOKS FOR THE WORK DONE WERE ALSO NOT MAINTAINED. THE QUANTITATIVE DETAIL O F THE OPENING AND CLOSING STOCK AND WORK IN PROGRESS WAS ALSO NOT MAINTAINED. NO DOCUMENTARY EVIDENCE REGARDING PHYSICAL VERIFICATION OF QUANTITATIVE / Q UALITATIVE DETAILS OF OPENING AND CLOSING STOCK WAS PRODUCED. DETAILS OF TRUCK OW NERS FROM WHOM PURCHASES HAD BEEN MADE DIRECTLY WAS NOT MENTIONED AND DETAIL S OF LABOURERS TO WHOM PAYMENT WAS MADE WAS NOT SUBMITTED. THE WAGES SALAR Y AND LABOUR REGISTER WAS ALSO NOT PRODUCED FOR LABOUR VERIFICATION. IT W AS ALSO NOTICED THAT ON SOME PURCHASE BILLS THE NAME OF INDIVIDUAL PERSONS WAS M ENTIONED. 5. DURING APPELLATE PROCEEDINGS THE ASSESSEE SUBMIT TED THAT ON THE ISSUE OF NON-MAINTENANCE OF PURCHASE REGISTER OF MATERIALS, IT WAS NOT POSSIBLE TO 3 MAINTAIN DAY TO DAY RECORD OF PURCHASES LOOKING INT O THE NATURE OF THE BUSINESS. THE ASSESSEE FURTHER PLEADED THAT ALL PURCHASES WER E SUPPORTED BY BILLS AND VOUCHERS AND THAT ALL CONTRACTS WERE UNDERTAKEN FOR THE GOVERNMENT PROJECTS. THE ASSESSEE ALSO SUBMITTED THAT ALL PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES. THE ASSESSEE CONTENDED THAT NON-MAINTENANC E OF STOCK REGISTER COULD NOT BE MADE A GROUND FOR REJECTING THE BOOKS OF ASS ESSEE. AS REGARDS THE MAINTENANCE OF DETAILS OF EMPLOYEES, THE ASSESSEE S TATED THAT THEY WERE GENERALLY MIGRATORY LABOUR AND DID NOT HAVE COMPLET E ADDRESS. FURTHER THE ASSESSEE STATED THAT NO ADVERSE VIEW HAD BEEN TAKEN BY VAT AUTHORITIES. THE ASSESSEE ALSO STATED THAT PROPER MUSTER ROLLS WERE MAINTAINED OF THE EMPLOYEES AND WHILE PAYING THE LABOURERS THEIR SIGNATURES HAD BEEN TAKEN ON THE MUSTER ROLES. AS REGARDS THE NON-MAINTENANCE OF MEASUREME NT BOOKS FOR THE WORK DONE THE ASSESSEE PLEADED THAT IT WAS NOT MANDATORY TO MAINTAIN THE SAME. REGARDING THE VALUATION OF OPENING AND CLOSING STOC K AND WORK IN PROGRESS, THE ASSESSEE STATED THAT IT WAS NOT POSSIBLE TO MAINTAI N THE QUANTITATIVE DETAILS OF THE SAME. THE ASSESSEE FURTHER STATED THAT THE VALU ATION OF STOCK HAD BEEN DONE AS PER PHYSICAL VERIFICATION BASIS AND SIMILAR VALU ATION OF STOCK HAD BEEN ACCEPTED BY THE DEPARTMENT IN THE PREVIOUS YEAR I.E . A.Y. 2009-10. REGARDING THE PAYMENT MADE TO TRUCK OWNERS THE ASSESSEE SUBMI TTED THAT THE SAME BELONGED TO THE UNORGANIZED SECTOR WHO WERE NOT ASS ESSED TO THE INCOME TAX AND THEREFORE, CASH PAYMENT WAS MADE AS PER GENERAL TRADE PRACTICE. AS REGARDS THE NAME OF INDIVIDUAL PERSONS APPEARING ON SOME BILLS, THE ASSESSEE STATED THAT THE SAME WAS BECAUSE WHENEVER A PERSON WENT TO PURCHASE THE ITEM, THE BILL WAS ISSUED TO THE SAID PERSON IN HIS NAME. THE ASSESSEE FURTHER STATED THAT THERE WERE ONLY A FEW SUCH BILLS WHICH WERE OF SMALL AMOUNT. 6. THE SUBMISSIONS OF THE ASSESSEE WERE FORWARDED T O A.O. FOR HIS COMMENTS WHO VIDE LETTER NO. 206 DATED 15/08/2014, REITERATE D THE SUBMISSIONS MADE IN 4 THE ASSESSMENT ORDER. THEREAFTER, THE LD. CIT(A) UP HELD THE REJECTION OF BOOKS BY HOLDING AT PARA 4.3 OF HIS ORDER AS FOLLOWS:- 4.3 I HAVE CONSIDERED THE SUBMISSION MADE. LOOKI NG INTO THE FACTS OF THE CASE IT IS NOTED THAT THE APPELLANT COULD NOT AUTHENTICA TE THE EXACT BASIS OF VALUATION OF THE CLOSING STOCK AND WORK IN PROGRESS. CORRECT VERIFICATION AND QUANTIFICATION OF CLOSING STOCK AND WORK IN PROGRESS VIS--VIS, TH E AMOUNT OF MATERIAL USED OUT OF PURCHASES AND OPENING STOCK FOR THE QUANTUM OF WORK EXECUTED IS NECESSARY IN ORDER TO DEDUCE THE CORRECT PROFIT MADE OUT OF THE BUSINESS. IN VIEW OF THIS, I AM OF THE OPINION THAT THE BOOKS OF ACCOUNTS HAVE BEEN CORRECTLY REJECTED BY THE AO. 7. BEFORE US LD. AR REITERATED THE CONTENTIONS MADE BEFORE THE LD. CIT(A), WHILE LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A ). 8. WE HAVE HEARD THE CONTENTIONS OF BOTH THE REPRES ENTATIVES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 9. WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. THE VARIOUS DISCREPANCIES POINTED OUT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, BEING NON-MAINTENANCE OF PURCHASE & STOCK REGISTER OF MATERIALS, NON-MAINTENANCE OF DETAILS OF LABOURERS, NON-MAINTE NANCE OF MEASUREMENT BOOK NON-MAINTENANCE OF DETAILS OF TRUCK DERIVES TO WHOM PAYMENTS WERE MADE FOR RAW MATERIALS & NON-MAINTENANCE OF QUANTIT ATIVE RECORD OF OPENING AND CLOSING STOCK AND WORK IN PROGRESS COLLECTIVELY AND TOGETHER RENDER THE ACCOUNT BOOKS INCOMPLETE AND THEREFORE UNRELIABLE F OR DETERMINING THE PROPER RESULTS OF THE ASSESSEE. THE ASSESSEE BEING A CIVIL CONTRACTOR, PROPER QUANTITATIVE RECORDS OF ITS OPENING AND CLOSING STOCK IS IMPERAT IVE FOR DETERMINING THE CORRECT RESULTS. IN THE PRESENT CASE WE FIND THAT THE ASSES SEE HAS CLAIMED THAT IT VALUED ITS STOCK ON PHYSICAL VERIFICATION BASIS, YET NO RE CORDS OF THE PHYSICAL VERIFICATION CONDUCTED WAS ALSO MAINTAINED. THE JURISDICTIONAL HIGH COURT IN A RECENT DECISION IN THE CASE OF HARISH AHUJA VS. CIT IN ITA NO. 196 OF 2015 DT. 24/08/2015, UPHELD T HE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) FOR NON MAINTENANCE OF STOCK RE GISTER BY HOLDING AS FOLLOWS: 5 5. THE ASSESSEE WAS TRADING IN THE ITEMS OF WELL ESTABLISHED COMPANIES AND IS ALSO A WHOLESALER C&F AGENT. IN ORDER TO CHECK VERACITY OF THE GROSS PROFIT DISCLOSED BY THE ASSESSEE, MAINTENANCE OF STOCK REG ISTER BY THE ASSESSEE WAS ESSENTIAL. THE ASSESSING OFFICER HAD COMPARED THE GROSS PROFI T RATE OF THE ASSESSEE VIZ-A-VIZ OTHER SIMILAR CONCERNS. NO SATISFACTORY EXPLANATION HAD BEEN FURNISHED BY THE ASSESSEE FOR NOT MAINTAINING THE S TOCK REGISTER. THE REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE BY THE ASSESSING O FFICER WAS, THUS, JUSTIFIED . THE RELEVANT FINDINGS RECORDED BY THE TRIBUNAL READ AS UNDER:- GURBACHAN SINGH 2015.09.0415:58 I ATTEST TO THE ACCURACY AND AUTHEN TICITY OF THIS DOCUMENT HIGH COURT CHANDIGARH 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW REJECTION OF THE BOOKS OF ACCOUNT IS JUSTIFIED IN T HE MATTER. THE ASSESSING OFFICER HAS VERIFIED THE GP RATE OF DIFFERENT CONCERNS AND FOUND ASSESSEE HAS BEEN DECLARING DIFFERENT GP, THOUGH SAME CALCULATION WAS FOUND TO BE DEFECTIVE BY LD. CIT(APPEALS) BUT THE FACT REMAINS THAT THERE WAS A VARIATION IN THE GROSS PROFITT RATE AND FURTHER, ASSESSEE HAS NOT MAINTAINED ANY S TOCK REGISTER, THEREFORE THE VERIFICATION OF THE PROPER GROSS PROFIT COULD NOT B E DONE BY THE ASSESSING OFFICER. THE VALUATION OF THE CLOSING STOCK WAS THUS, NOT VE RIFIABLE. IT WAS ALSO FOUND THAT ASSESSEE IS TRADING IN THE ITEMS OF WELL ESTABLISHE D COMPANIES AND IS A WHOLESALER/C&F AGENT. THEREFORE, STOCK REGISTER SHO ULD HAVE BEEN MAINTAINED BY ASSESSEE. THEREFORE, CONSIDERING THE OBJECTIONS RAI SED BY THE ASSESSING OFFICER, THE REJECTION OF BOOKS OF ACCOUNT IS JUSTIFIED. WE, THEREFORE, CONFIRM THE ORDERS OF THE AUTHORITIES BELOW IN REJECTING THE BOOKS OF ACC OUNT OF THE ASSESSEE. FURTHER THE NON-MAINTENANCE OF DETAILS OF LABOURER, AND TRUCK DRIVER TO WHOM PAYMENTS WERE MADE DIRECTLY IN CASH AS ALSO THE PUR CHASE BILLS IN THE NAMES OF INDIVIDUALS, CASTS DOUBTS ON THE GENUINENESS OF EXP ENSES BOOKED. THE QUERIES RAISED IN THIS BEHALF BY THE AO HAVE NOT BEEN SATIS FACTORILY ADDRESSED BY THE ASSESSEE. THEREFORE CONSIDERING THE FACTS RECORDED BY THE AUTHORITIES BELOW FOR REJECTION OF BOOKS OF ACCOUNT, WE DO NOT FIND ANY J USTIFICATION TO INTERFERE WITH THE ORDER OF THE AUTHORITIES BELOW. THE CROSS OBJEC TION OF THE ASSESSEE IS THEREFORE LIABLE TO BE DISMISSED ON THIS GROUND. 10. THE REVENUE IN ITS APPEAL HAS CHALLENGED THE RE DUCTION OF THE NET PROFIT RATE FROM 10% TO 5%. THE ASSESSEE IN THE CROSS OBJE CTION HAS CHALLENGED THE APPLICATION OF NET PROFIT RATE OF 5% BY THE LD. CIT (A). 11. BRIEFLY STATED, AFTER REJECTING THE BOOKS OF TH E ASSESSEE U/S 145, THE A.O. APPLIED A NET RATE OF 10% ON THE GROSS TURNOVER OF THE ASSESSEE TO ESTIMATE THE BUSINESS INCOME OF THE ASSESSEE. FURTHER DEDUCTION ON ACCOUNT OF SALARY AND INTEREST WAS ALLOWED SUBJECT TO THE LIMITS BY PROVI DED CLAUSE (B) OF SECTION 40 OF THE ACT. NO DEDUCTION ON ACCOUNT OF THE DEPRECIATIO N CLAIMED WAS ALLOWED. BEFORE THE LD. CIT(A), THE ASSESSEE PLEADED THAT AF TER REJECTING THE BOOKS OF THE 6 ASSESEE, IT WAS INCUMBENT TO CONSIDER THE PAST HIS TORY OF THE ASSESSEE, WHICH HAD SHOWN AN INCREASE IN THE NET PROFIT RATE. THE C IT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE APPLIED A NET PROFIT RA TE OF 5% ON THE TURNOVER TO ESTIMATE THE INCOME OF THE ASSESSEE BY HOLDING AS F OLLOWS:- NOW COMING TO THE ESTIMATION OF PROFIT IT IS NOTED THAT IN A.Y. 2009-10 THE NET PROFIT RATE OF 1.81% ON TURNOVER OF RS. 5,51,53,760/- HAS BEEN DECLARED BY THE APPELLANT. AS PER COPY OF ASSESSMENT ORDER FILED BY THE APPELL ANT, IN SCRUTINY PROCEEDINGS THE INCOME IS ASSESSED AT RS. 10,54,842/- IN PLACE OF 9,99,016/- DECLARED BY THE APPELLANT THERE BY ASSESSING PROFIT @ 1.91%. IN THI S YEAR I.E. 2010-11 THE NET PROFIT IS DECLARED AS 3.11% ON A TURNOVER OF RS. 7,90,52,919/ -. THUS, THE PROFIT DECLARED IS PROGRESSIVE IN NATURE. THE NATURE OF THE BUSINESS A LSO REMAINS SAME WHICH IS NOT REBUTTED BY THE A.O. IN HIS COUNTER COMMENTS. IN TH E CASE OF M/S HARBHAJAN SINGH AND CO. VS. JCIT IN ITA NO. 183/CHD/2013 FOR A.Y. 2008-09 THE HONBLE ITAT CHANDIGARH RELIED ON THE CASE OF CIT VS. PARVEEN KU MAR MITTAL DELIVERED BY HONBLE JURISDICTIONAL HIGH COURT AND CONTENDED THA T EVEN AFTER THE REJECTION OF BOOKS OF ACCOUNTS THE PAST HISTORY OF THE ASSESSEE HAS TO BE APPLIED AND ADOPTED FOR THE PURPOSE. IN THIS CASE, THE PURCHASE S ARE DULY VOUCHED AND NO DISCREPANCY IS FOUND BY THE A.O. THERE IS NO DISPUT E REGARDING THE TURNOVER ALSO. MUSTER ROLLS ARE PRODUCED BEFORE THE A.O. HOWEVER P ROPER VERIFICATION WAS NOT POSSIBLE IN ABSENCE OF POSTAL ADDRESS AND THERE MAY BE SOME LEAKAGE OF REVENUE. CLOSING STOCK IS VALUED ON THE BASIS OF PH YSICAL VERIFICATION ONLY AS IN THE PREVIOUS YEAR. THE APPELLANT HAS SUBMITTED THAT IT IS NOT POSSIBLE TO MAINTAIN QUANTITATIVE DETAILS OF STOCK IN THIS BUSINESS. HOW EVER, IN ABSENCE OF THE EXACT QUANTIFICATION SOME LEAKAGE OF REVENUE IS POSSIBLE. THEREFORE, LOOKING INTO THE ENTIRETY OF THE FACTS OF THE CASE, I AM OF THE OPIN ION THAT THE NET PROFIT DECLARED BY THE APPELLANT TO BE TAKEN @5% IN PLACE OF 3.11% DECLARED BY THE APPELLANT AND IN PLACE OF 10% ESTIMATED BY THE A.O. THUS, THE RE IS A NET INCREASE OF 1.89% IN THE NET PROFIT . 12. BEFORE US THE LD. AR CONTENDED THAT THE ASSESSE E IS TAKING CONTRACTS ONLY FROM THE GOVERNMENT DEPARTMENT AS PER PRESCRIBED RA TES APPROVED BY THE GOVERNMENT AND AT TIMES THE CONTRACT IS ALLOTTED ON LY AT 3.9% HIGHER OF APPROVED RATES AND THUS PROFIT CANNOT BE THAT MUCH. LD. AR ARGUED THAT EVEN AS PER ITS PAST HISTORY THE ASSESSEE HAD NOT BEEN A SSESSED AT A NET PROFIT RATE EXCEEDING 4% . LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE AO. 13. WE FIND THAT THE AO APPLIED A PROFIT RATE OF 10 % FOR ESTIMATING THE INCOME OF THE ASSESSEE BY RELYING ON THE JUDGMENT OF THE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PARBHAT KUMAR (2010) 323 ITR 675 AN D ESS ESS BUILDERS. LD. CIT(A) ON THE OTHER HAND AFTER CONSIDERING THE PAST HISTOR Y OF THE ASSESSEE AND THE FACT THAT LEAKAGES OF REVENUE MUST HAVE OCC URRED ON 7 ACCOUNT OF NON MAINTENANCE OF STOCK RECORDS AND DET AILS OF LABOURERS REDUCED THE NET PROFIT RATE TO 5%. UNDENIABLY, WHERE BOOKS OF ACCOUNTS ARE REJECTED, T HE PROFITS HAVE TO BE ESTIMATED AND THE ESTIMATION HAS TO BE ON A R EASONABLE BASIS SO AS TO ARRIVE AT AN APPROXIMATION OF THE PROFITS WHICH AN ASSESSEE WOULD ORDINARILY WOULD HAVE EARNED IN HIS LINE OF B USINESS AND WHICH COULD HAVE BEEN ARRIVED AT FROM HIS BOOKS OF ACCOUN TS IF MAINTAINED PROPERLY. THE PURPOSE OF APPLYING A PROFIT RATE TO THE TURNOVER OR ANY OTHER BASIS, IS TO COMPUTE THE PROFITS ON A REASONA BLE BASIS OF ESTIMATE. TO ARRIVE AT A REASONABLE BASIS, THE PROF IT RATE TO BE APPLIED CAN BE DETERMINED HAVING REGARD TO THE RATE OF PROFITS MADE BY THE ASSESSEE IN PAST YEARS, THE AVERAGE RAT E OF PROFIT MADE IN SIMILAR LINE OF BUSINESS OR ANY OTHER SUCH BASIS . IN THE PRESENT CASE WE FIND THAT THE APPLICATION OF PROFIT OF 10% FOLLO WING THE DECISION OF THE JURISDICTIONAL HIGH COURT WITHOUT ESTABLISHING HOW THE FACTS OF THE CASE ARE SIMILAR TO THE ASSESSEE, IS NOT JUSTIFIED. THE LD. CIT(A), WE FIND HAS, ON THE OTHER HAND CONSIDERED THE PAST HIS TORY OF THE ASSESSEE WHEREIN THE ASSESSEE HAD SHOWN A PROFIT RA TE OF 1.91% IN AY 09-10, WHICH WAS ACCEPTED IN SCRUTINY PROCEEDINGS. IN THE IMPUGNED AY THE ASSESSEE HAS DECLARED A PROFIT RATE OF 3.11% . LD. CIT(A) TAKING INTO CONSIDERATION THE PAST RESULTS AND MAKING ADJU STMENTS THERETO ON ACCOUNT OF DISCREPANCIES FOUND IN THE BOOKS OF A CCOUNTS WHICH MAY HAVE RESULTED IN REVENUE LEAKAGES, APPLIED A NE T PROFIT RATE OF 5%. WE FIND THAT THE PROFIT RATE ADOPTED BY THE LD. CIT(A) IS REASONABLE AND APPROPRIATE. WE THEREFORE UPHOLD THE ORDER OF THE LD. CIT(A) AND APPROVE THE APPLICATION OF NET PROFI T RATE OF 5% AGAINST THE RECEIPTS DISCLOSED BY THE ASSESSEE FOR THE PURPOSE OF COMPUTING THE BUSINESS INCOME OF THE ASSESSEE. 8 15. THE GROUND OF APPEAL OF BOTH THE ASSESSEE AND T HE REVENUE IS THEREFORE DISMISSED. 16. IN THE RESULT BOTH THE DEPARTMENTAL APPEAL AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28/10/2015 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR