Books rejected, income estimated at 0.11% net profit excluding notional claims and 26AS advances; no separate 40(a)(ia) disallowance when profits computed on gross profit basis following binding precedent.

PER: RATHOD KAMLESH JAYANTBHAI, AM

(cid:1) By way of the present appeal the revenue challenges the order of the

National Faceless Appeal Centre [ for short CIT(A) ] dated 18-01-2024, for

assessment year 2017-18. That order was passed by ld. CIT(A) because

the assessee challenged the order of the assessment passed against him by ACIT, Circle-3, Jodhpur [ for short AO] on 28.12.2019 as per provision of section 143(3) of the Income Tax Act [ for short Act ].

2. The grounds of following raised by the revenue in this appeal reads as follows:

‘’1. Whether in the facts and circumstances of the case, the Id. CIT(A) is justified in estimating net profit @0.11% and ignoring that the AO has categorically held that 70% of expenses Rs. 46,25,75,450/- not subject to TDS are not genuine and this disallowance of Rs. 32,38,02,815/-(70% of 46,25,75,450/-) was included in estimated addition by applying N.P. rate of 10.32%, 2. Whether in the facts and circumstances of the case, the Id. CIT(A) is justified in deleting addition of Rs. 13,87,72,635/- made u/s 40(a)(ia) which was disallowed by assesse itself and it should not have been made part of estimation of Net Profit.

3. Whether in the facts and circumstances of the case, the Id. CIT(A) is justified in estimating net profit @0.11% and not separately considering the disallowance u/s 40(a)(ia) of Rs. 13,87,72,635/- and disallowance of Rs. 32,38,02,815/-being non genuine expenses and accordingly whether the Id. CIT(A) is justified in relying upon the judgement of Hon'ble ITAT and High Court in the case of assesse for earlier assessment year when the facts of the case are distinguishable.

4. Whether in the facts and circumstances of the case, the Id. CIT(A) is justified in excluding amount of Rs. 1,72,77,91,273/- from turnover of the assesse for determining GP 29.29% whereas the above amount was shown by assesse itself in its ITR under the had "other income" in P&L account so it is part of business receipts along with amount of Rs. 2,73,93,10,472/- from revenue from operations shown by assessee. Whether the Id CIT(A) is justified in treating this amount as un- accrued income when the assessee itself has shown the same as part of income in its ITR.

5. Whether in the facts and circumstances of the case, the Id. CIT(A) is justified in excluding amount of Rs. 73,98,982/- from turnover of the assessee for determining GP @ 29.29% when the assessee failed in the appellate proceedings to explain the difference in amount shown in form 26AS and amount credited in books of accounts in the cases of M/s Rajasthan State Road Development and Construction Corporation Ltd. (difference of Rs. 71,98,207/- and M/s JMC Projects India Ltd. (difference of Rs. 2,56,778/-).

6. That the tax effect involved in this case is above the limit laid down in Circular No. 17/2019 dated 08.08.2019 issued by the CBDT, (Judicial Section) New Delhi." That the appellant reserves its right to add, amend or alter the ground(s) of appeal on or before the date, the appeal is finally heard."

3. The brief facts related to this case are that the assessee-company e- filed its return of income for AY 2017-18 in form ITR-6 declaring NIL income with carried forward of unabsorbed loss of Rs. 5,52,17,083/- (b/f loss of AY 2016-17 Rs.3,17,161 + current year's loss of Rs.5,48,99,877/-). The case was selected for scrutiny through CASS and notice u/s 143(2) dated 17.08.2018 was digitally served on the