ACIT, SRIGANGANAGAR V. Shri Devki Nandan Golyan, SRIGANGANAGAR

ITA 86/JODH/2013

• Counselvise Citation: 8623314 RSA 2013
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN
• Keywords: Depreciation
• Section: 143(3); 142(1); 68; 145; 12; 144

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 86/JODH/2013 (A.Y. 2009-10) THE A.C.I.T. VS. SHRI DEVKI NANDAN GOLYAN CIRCLE, SRIGANGANAGAR SRIGANGANAGAR COLD STORAGE CAMPUS SURATGARH ROAD, N.H. 15, SRIGANGANAGAR. PAN NO. AAZPG6122A (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI N.A. JOSHI, D.R. ASSESSEE BY : SHRI U.C. JAIN & SHRI RAJENDRA JAIN DATE OF HEARING : 25/11/2013. DATE OF PRONOUNCEMENT : 29/11/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 27/12/2012 OF LD. CIT (A), BIKANER. FIRST ISSUE IN THIS APPEA L RELATES TO DELETION OF ADDITION OF RS. 47,29,076/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NET PROFIT RATE APPLIED AT 12.50% AS AGAINST 9.9% DECLARED BY THE A SSESSEE. 2 2. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT TH E ASSESSEE FILED RETURN OF INCOME ON 17/9/2009 DECLARING TOTAL INCOME OF RS. 1 ,79,11,200/-. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. ACCORDING TO THE AS SESSING OFFICER, THE ASSESSEE FAILED TO COMPLY WITH THE REQUIREMENTS OF NOTICE U/S 142(1) OF THE I.T. ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT) A ND THAT NUMBER OF OPPORTUNITIES WERE GIVEN TO PRODUCE THE COMPLETE BO OKS OF ACCOUNT WITH SUPPORTING VOUCHERS BUT HE TOOK ADJOURNMENTS TIME A ND AGAIN ON THE DIFFERENT PLEA. THE ASSESSING OFFICER DID NOT ACCEPT THE COMP UTERIZED CASH BOOK, LEDGER PRODUCED BY THE ASSESSEE BY OBSERVING THAT T HE ASSESSEE WAS NOT MAINTAINING COMPLETE RECORD OF PURCHASES, EXPENSES, PAYMENT ETC. HE, THEREFORE, INVOKED THE PROVISIONS OF SECTION 145 OF THE ACT AND REJECTED THE BOOKS OF ACCOUNT. THE ASSESSMENT WAS FRAMED U/S 144 OF THE ACT BY MAKING VARIOUS ADDITIONS. THE ASSESSING OFFICER MADE THE T RADING ADDITION OF RS. 47,29,076/- IN THE CONTRACT ACCOUNT BY APPLYING THE GROSS PROFIT RATE OF 12% ON CONTRACT RECEIPTS AS AGAINST 9.9% DECLARED BY THE A SSESSEE. THE ASSESSING OFFICER DISCUSSED THIS ISSUE IN PARAS 14 TO 31 OF T HE ASSESSMENT ORDER DATED 26 TH DECEMBER, 2011. THE MAIN REASON FOR APPLICATION OF SUCH RATE OF PROFIT WAS THAT THE ASSESSEE WAS VERY EXPERIENCED CONTRACT OR AND HAD THE BENEFIT OF LARGE MACHINERY. THE ASSESSING OFFICER ALSO REFERRE D THE DECISION OF THE 3 HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS JAIN CONSTRUCTION CO. LTD. WHEREIN PROFIT RATE OF 12.5% WAS STATED TO BE SHOWN . 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER WHILE REJECTIN G THE BOOKS OF ACCOUNT BY INVOKING PROVISIONS OF SECTION 145(3) OF THE ACT AN D IN ESTIMATING THE PROFIT RATE COULD NOT IGNORE THE PAST HISTORY OF THE CASE. RELIANCE WAS PLACED ON THE DECISION OF THE ITAT DELHI SPECIAL BENCH IN THE CAS E OF DY.CIT VS. ALLIED CONSTRUCTION REPORTED IN [106 TTJ (DEL) (SB) 595]. THE ASSESSEE OBJECTED FOR NOT CONSIDERING THE COMPARABLE CASE OF IMMEDIATELY PRECEDING YEAR. IT WAS STATED THAT THE ASSESSING OFFICER APPLIED G.P. RATE OF 12% SUBJECT TO DEPRECIATION AS AGAINST THE DECLARED G.P. RATE OF 9 .99% SUBJECT TO DEPRECATION INTEREST PAID, OFFICE RENT AND ELECTRICITY EXPENSES . IT WAS ALSO STATED THAT THE ASSESSING OFFICER COMPARED THE TURNOVER OF FINANCIA L YEAR 1990-91 AT RS. 58,55,594/- TO THE TURNOVER OF RS. 31,47,41,624/- I N THE YEAR UNDER CONSIDERATION AND IGNORED THE CASE OF IMMEDIATELY P RECEDING YEAR, IN WHICH TURNOVER WAS AT RS. 25,03,26,346/-. IT WAS STATED T HAT EVEN AFTER REJECTION OF BOOKS OF ACCOUNT, THE ASSESSING OFFICER WAS NOT EMP OWERED TO MAKE ARBITRARY ADDITION. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- I. STATE OF ORISSA VS. MAHARAJA SHRI B.P. SINGH DE O REPORTED IN 76 ITR 690 (SC). II. CIT VS. RANICHERRA TEA CO. LTD. (1994) 207 ITR 979 (CAL.) 4 IT WAS FURTHER SUBMITTED THAT IN THE CASE OF M/S J AIN CONSTRUCTION CO., RATE OF PROFIT WAS NOT IN DISPUTE AND AS SUCH, THE CONTENTION OF THE ASSESSING OFFICER THAT RATE OF PROFIT OF 12.5% WAS UPHELD BY THE HON'BLE RAJASTHAN HIGH COURT IN THE SAID CASE, WAS ERRONEOUS. THE ASSESSEE RELIED UPON THE DECISION OF THE ITAT JODHPUR BENCH IN THE CASE OF SHRI KAILA SH CHAND KHATRI VS. ADDL. CIT IN I.T.A. NO. 173/JU/2011 DATED 15/12/2011. WHE REIN THE NET PROFIT OF 9% ON THE TOTAL RECEIPTS SUBJECT TO DEDUCTION OF STATU TORY ALLOWANCES WAS DIRECTED TO BE APPLIED AS WAS ALLOWED IN PAST. 4. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, OBSERVED THAT ONCE THE BOOKS OF ACCOUNT ARE REJECTE D AND THE PROFIT RATE IS APPLIED, THEN IT WAS IMPERATIVE ON THE PART OF THE ASSESSING OFFICER TO ADOPT PROFIT RATE AS ACCEPTED IN THE PRECEDING YEAR. HOWE VER, THE LD. CIT(A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT AND APPLICATION O F PROVISIONS OF SECTION 145(3) OF THE ACT AND OBSERVED THAT AFTER REJECTIO N OF BOOKS OF ACCOUNT, THE PROFIT WAS TO BE ESTIMATED ON THE BASIS OF PAST HIS TORY OF THE CASE. THE LD. CIT(A) POINTED OUT THAT THE ASSESSING OFFICER AT PA GE NO. 5 OF THE ASSESSMENT ORDER HAD GIVEN THE COMPARATIVE POSITION OF CONTRAC T RECEIPTS AND PROFIT RATE DISCLOSED BY THE ASSESSEE FROM THE ASSESSMENT YEARS 1991-92 TO 2008-09 AND THE SECTION UNDER WHICH THE ASSESSMENTS WERE FR AMED. THE LD. CIT(A) POINTED OUT THAT THE SAID COMPARATIVE POSITION REVE ALED THAT ALL THE 5 ASSESSMENT ORDERS WERE PASSED U/S 143(3) OF THE ACT AND THAT IN THE IMMEDIATELY PRECEDING YEAR, RATE OF 9.9% WAS APPLIE D AND THE ASSESSEE HAD DISCLOSED THE SAME RATE IN THE YEAR UNDER CONSIDERA TION. THE LD. CIT(A) HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN APP LYING THE G.P. RATE OF 12% INSTEAD OF 9.9% DECLARED BY THE ASSESSEE. HE ALSO O BSERVED THAT IN THE DECISION OF HON'BLE RAJASTHAN HIGH COURT RELIED BY THE ASSESSING OFFICER IN THE CASE OF M/S JAIN CONSTRUCTION CO., THE RATE OF PROFIT WAS NOT AN ISSUE. ACCORDINGLY, THE LD. CIT(A) DELETED THE ADDITION OF RS. 47,29,076/- MADE BY THE ASSESSING OFFICER BY FOLLOWING THE DECISION OF ITAT DELHI SPECIAL BENCH IN THE CASE OF DY.CIT VS. ALLIED CONSTRUCTION (SUPRA). NOW THE DEPARTMENT IS IN APPEAL. 5. THE LEARNED D.R. SUPPORTED THE ORDER OF THE ASSE SSING OFFICER AND FURTHER SUBMITTED THAT SINCE THE ASSESSEE FAILED TO DISCHARGE HIS ONUS AND DID NOT PRODUCE THE REQUISITE DOCUMENTS, THEREFORE, THE INCOME WAS RIGHTLY ESTIMATED BY THE ASSESSING OFFICER AND THE LD. CIT( A) WAS NOT JUSTIFIED IN DELETING THE SAID ADDITION. 6. IN HIS RIVAL SUBMISSION, THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 6 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN T HE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER REJECTED T HE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE AC T. THE SAID ACTION OF THE ASSESSING OFFICER HAS NOT BEEN CHALLENGED BY THE AS SESSEE. IT IS WELL SETTLED THAT WHEN BOOKS OF ACCOUNT ARE REJECTED, THE BEST C OURSE TO DETERMINE INCOME IS APPLICATION OF G.P. RATE OR NET PROFIT RATE, HOW EVER, THE PAST HISTORY IS TO BE CONSIDERED WHILE ESTIMATING THE INCOME BY APPLYING THE PROFIT RATE AS HAS BEEN HELD BY THE ITAT DELHI SPECIAL BENCH IN THE CA SE OF DY.CIT VS. ALLIED CONSTRUCTION REPORTED IN [106 TTJ (DEL)(SB) 595]. I N THE PRESENT CASE, THE ASSESSING OFFICER AT PAGE NO. 5 OF THE ASSESSMENT O RDER, HAD GIVEN THE CHART OF THE CONTRACT RECEIPTS AND THE NET PROFIT RATE DE CLARED BY THE ASSESSEE FOR THE FINANCIAL YEARS 1991-92 TO 2008-09. IN ALL THE YEAR S, ASSESSMENTS WERE FRAMED U/S 143(3) OF THE ACT. IT IS NOTICED THAT TH E ASSESSEE HAD DECLARED NET PROFIT RATE OF 9.92%, 9.95%, 9.94%, 9.97%, 9.98% AN D 9.99% FOR THE FINANCIAL YEARS 2002-03 TO 2007-08 RESPECTIVELY, WHICH CLEARL Y SHOWS THAT THE MAXIMUM NET PROFIT RATE DECLARED BY THE ASSESSEE IN THE LA ST SIX YEARS, WAS 9.99%, WHICH WAS IN THE IMMEDIATELY PRECEDING YEAR, THEREF ORE, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO APP LY THE NET PROFIT RATE OF 9.99% 7 ON THE BASIS OF PAST HISTORY. WE, THEREFORE, DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 8. VIDE GROUND NO. 2, THE GRIEVANCE OF THE ASSESSEE RELATES TO DELETION OF ADDITION OF RS. 1,29,23,209/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST PAID TO THIRD PARTIES,( RS. 1,39,51,964/- WRONGLY TAKEN). 9. FACTS RELATED TO THIS ISSUE IN BRIEF THAT THE AS SESSING OFFICER DISALLOWED THE INTEREST PAID TO THIRD PARTIES AMOUNTING TO RS. 95,89,072/- AND MADE THE SEPARATE ADDITION OF INTEREST RECEIVED AS INCOME F ROM OTHER SOURCES FOR A SUM OF RS. 43,62,892/-. WHILE DOING SO, THE ASSESSI NG OFFICER REFERRED TO THE DECISION OF THE ITAT JODHPUR BENCH IN THE CASE OF M OHTA CONSTRUCTION CO., BIKANER IN I.T.A. NO. 127/JU/2008 ORDER DATED 27/5/ 2009. 10. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A) AND SUBMITTED THAT THE INTEREST PAID TO THE CREDITORS W AS REQUIRED TO BE REDUCED BEFORE COMPUTING TAXABLE INCOME AS THE NET INCOME F ROM CONTRACT BUSINESS COULD NOT BE DETERMINED WITHOUT ALLOWING SUCH CLAIM . RELIANCE WAS PLACED ON THE JUDGMENTS OF THE HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF M/S JAIN CONSTRUCTION CO. REPORTED IN 245 ITR 527 AND IN THE CASE OF CIT V/S BHAWAN VA PATH NIRMAN (BOHRA) & CO. REPORTED IN 258 ITR 43 1 (RAJ.). IT WAS FURTHER SUBMITTED THAT THE SLP FILED BY THE REVENUE IN THE CASE OF BHAWAN VA PATH NIRMAN (BOHRA) & CO. ((SUPRA)) STOOD REJECTED BY T HE HON'BLE SUPREME COURT. 8 IT WAS CONTENDED THAT THE ISSUE RELATING TO ALLOWAB ILITY OF INTEREST TO THE CREDITORS, INTEREST AND SALARY TO PARTNERS AND THE DEPRECIATION WAS DIRECTLY INVOLVED IN THE AFORESAID REFERRED TO CASES AND THE HON'BLE RAJASTHAN HIGH COURT APPROVED THE ORDER OF THE TRIBUNAL, IN WHICH SUCH CLAIM WAS ALLOWED. IT WAS ALSO STATED THAT THE CLAIM OF THE INTEREST WAS ALLOWED YEAR AFTER YEAR, THEREFORE, THERE WAS NO JUSTIFICATION ON THE PART O F THE ASSESSING OFFICER TO DISALLOW THE SAME. IT WAS FURTHER STATED THAT THE A MOUNT OF INTEREST MENTIONED BY THE ASSESSING OFFICER AT PAGE NO. 8 OF THE ASSES SMENT ORDER DID NOT MATCH WITH THE PARTY WISE DETAILS OF INTEREST RECEIVED AN D PAID, IT WAS EXPLAINED THAT THE NET INTEREST PAID WAS RS. 95,89,072/- IN THE DE TAILS FURNISHED BY THE ASSESSEE. WHILE AS PER ANNEXURE 3CD AUDIT REPORT, I T WAS AT RS. 83,60,470/- BUT THE ASSESSING OFFICER DID NOT FIND IT APPROPRIA TE TO ASK THE ASSESSEE TO EXPLAIN SUCH DIFFERENCE. HAD THE ASSESSING OFFICER SOUGHT EXPLANATION FROM THE ASSESSEE FOR CLERICAL MISTAKE IN THE DETAILS, T HE SAME COULD HAVE BEEN EXPLAINED. IT WAS STATED THAT NET INTEREST PAID AMO UNTING TO RS. 95,89,072/- APPEARING IN SCHEDULE VI OF THE PROFIT AND LOSS ACC OUNT INCLUDED RS. 12,28,602/- OF HIRE CHARGES, WHICH WAS THE INTEREST PAID ON THE TERM/HYPOTHECATION LOANS TAKEN FROM THE BANKS/FINAN CIAL INSTITUTIONS AND THE INTEREST OF RS. 83,60,470/- WAS THE NET BALANCE OF INTEREST ACCOUNT AS APPEARED IN THE BOOKS OF ACCOUNTS. 9 11. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETED THE ADDITION BY OBSERVING IN PARA 6.10 OF THE IMPUG NED ORDER, WHICH READS AS UNDER:- 6.10 I HAVE CONSIDERED THE REASONS ASSIGNED B Y THE LEARNED ASSESSING OFFICER WHILE REJECTING THE CLAIM OF THE ASSESSEE AND THE SUBMISSION OF THE ASSESSEE. I HAVE ALSO GONE TH ROUGH THE JUDGMENT RELIED BY THE ASSESSEE AS WELL BY THE ASSE SSING OFFICER. THE UNDISPUTED FACT IS THAT WHILE ESTIMATING THE IN COME FROM CONTRACT BUSINESS, THE ASSESSING OFFICER HAS ALLOW ED THE CLAIM OF INTEREST PAID TO THIRD PARTIES AND THERE IS NO REAS ON TO DEVIATE FROM THE PAST PRACTICE, PARTICULARLY WHEN, THE HON'BLE R AJASTHAN HIGH COURT IN THE CASES RELIED BY THE ASSESSEES AR THE CLAIM WAS ALLOWED . FURTHER WHEN CONSISTENTLY THE INCOME WAS COMPUTED AFTER ALLOWING THE CLAIM OF INTEREST, I DO NOT FIND ANY REASON TO DEVIATE FROM THE PAST HISTORY OF THE CASE AND AS SU CH RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE RAJASTHAN HIGH CO URT IN THE CASE OF CIT V/S BHAWAN VA PATH NIRMAN (BOHRA) & CO. REPO RTED IN 258 ITR 341 (RAJ.), I DIRECT THE ASSESSING OFFICER TO A LLOW THE CLAIM OF GROSS INTEREST PAID TO THIRD PARTIES WHICH COMES TO RS. 1,39,51,964/-. NOW THE DEPARTMENT IS IN APPEAL. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE INTEREST PAID TO THIRD PARTIES OUT OF GROSS PROFIT RATE DETE RMINED BY KEEPING IN VIEW THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S BHAWAN VA PATH NIRMAN (BOHRA) & CO. REPORTED IN 258 ITR 341 (RAJ.) AND THE SLP AGAINST THE SAID DECISION HAS BEEN REJECTED BY THE HON'BLE SUPREME 10 COURT. WE, THEREFORE, DO NOT SEE ANY VALID GROUND T O INTERFERE WITH THE FINDINGS GIVEN BY THE LD. CIT(A) ON THIS ISSUE, ACCORDINGLY, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 13. THE LAST ISSUE AGITATED BY THE DEPARTMENT RELAT ES TO DELETION OF ADDITION OF RS. 47,12,300/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF STANDING LIABILITIES IN RESPECT OF EXPENDITURE INCURRED IN C ONTRACT ACCOUNT. 14. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT T HE ASSESSING OFFICER FROM THE LIST OF SUNDRY CREDITORS (SCHEDULE-K), NOTICED THAT THE ASSESSEE HAD SHOWN TRUCK PAYMENT OUTSTANDING TO THE TUNE OF RS. 47,12, 300/-. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DID NOT FURNISH DOCUMENTARY EVIDENCE IN RELATION TO THE PERSONS TO WHOM THESE PAYMENTS WERE PAYABLE AS ON 31/3/2009 AND WHEN THE SAME WERE PAID. HE, THEREFOR E, TREATED THE AMOUNT OUTSTANDING AS UNEXPLAINED U/S 68 OF THE ACT AND MA DE THE ADDITION. 15. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A) AND SUBMITTED THAT WHEN BOOKS OF ACCOUNT OF THE ASSESSE E WERE REJECTED THEN THE ASSESSING OFFICER COULD NOT HAVE MADE ADDITION U/S 68 OF THE ACT IN RESPECT OF AMOUNT PAYABLE TO THE LABOURERS AND TRANSPORTERS AS THOSE EXPENSES WERE DEDUCTED IN THE CONTRACT ACCOUNT. RELIANCE WAS PLAC E ON THE JUDGMENT OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. G.K. CONTRACTOR REPORTED IN 19 DTR (RAJ) 305. 11 16. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE OBSERVED THAT THE ISSUE WAS FULLY COVERED BY THE DE CISION OF THE HON'BLE RAJASTHAN HIGH COURT RELIED BY THE ASSESSEE. HE, TH EREFORE, HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING SUCH ADDITION ACCORDINGLY THE ADDITION OF RS. 47,12,300/- WAS DELETED. NOW THE DE PARTMENT IS IN APPEAL. 17. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE LIABILITY TOWARDS OUTSTANDIN G CREDITORS WAS RELATED TO THE TRANSPORTATION AND LABOUR EXPENSES, WHICH WERE DEBI TED IN THE CONTACT ACCOUNT. THE SAID ACCOUNT WAS APPEARING IN THE BOOK S OF ACCOUNT, WHICH WERE REJECTED BY THE ASSESSING OFFICER AN INCOME WAS DET ERMINED BY APPLYING NET PROFIT RATE. ON A SIMILAR ISSUE, THE HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF CIT VS. J.K. CONTRACTOR (SUPRA) HELD AS UNDER:- AO HAVING ESTIMATE THE PROFIT BY APPLYING A HIGHER NET PROFIT RATE TO TOTAL CONTRACT RECEIPTS AFTER REJECTING ASSESSEE S BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF S. 145(3), NO SEPARATE ADDITION CAN BE MADE ON ACCOUNT OF CASH CREDIT UNDE R S. 68 EVEN THOUGH THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONU S OF PROOF IN EXPLAINING THE AMOUNT SHOWN IN THE BOOKS OF ACCOUNT AS MARKET OUTSTANDING. 18. IN THE PRESENT CASE, THE ASSESSING OFFICER REJE CTED THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT, THEREFORE, IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL H IGH COURT, NO SEPARATE 12 ADDITION U/S 68 OF THE ACT COULD HAVE BEEN MADE ON ACCOUNT OF SUNDRY CREDITORS RELATING TO EXPENSES. WE, THEREFORE, DO N OT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 19. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. (ORDER PRONOUNCED IN THE COURT ON 29.11.2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29.11.2013 RANJAN* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.