IN INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER. ITA No.1595/PUN/2014 Assessment Year 2011-12 M/s. Anusaya Construction Company of Parli Vaijnath, Pin 431515 Distt.-Beed PAN AALFM2684B Appellant V/s. Additional Commissioner of Income Tax, Range 2, Aurangabad Respondent Assessee by Shri M.K. Kulkarni Revenue by Shri Sudhendu Das Date of Hearing 13-09-2019 Date of Pronouncement 19-09-2019 ORDER PER S.S. VISWANETHRA RAVI, JM This appeal by assessee against order dated 02-07-2014 passed by Commissioner of Income Tax (Appeals), Aurangabad for assessment year 2011-12. 2. assessee through additional ground has challenged jurisdiction of Assessing Officer in terms of section 120(4)(b) of Act. 2 ITA No.1595/PUN/2014, A.Y. 2011-12 case of assessee is that jurisdiction was not properly assigned in terms of provisions in as much as it refers to Assessing Officer. We do not find any substance in argument of Ld. AR for obvious reason that definition of (Assessing Officer) given u/s. 2(7A) of Act includes Additional Commissioner as well. Further, Ld. DR has placed on record copy of order passed u/s. 127 of Act transferring jurisdiction by Ld. CIT(A) from one Assessing Officer to another Assessing Officer. Reliance of Ld. AR on Tribunal decision in case of M/s. Tata Sons Ltd. Vs. ACIT reported in (2017) 162 ITD 450 (Mum.) is misplaced in as much as in that case proceedings were initiated by ACIT but were taken over in middle of proceedings by Addl. CIT without there being any valid transfer of jurisdiction from ACIT to Additional CIT. On contrary, we are confronted with situation in which CIT(A), Aurangabad has specifically passed order u/s. 127 of Act transferring jurisdiction of assessee from ACIT, Circle-2, Aurangabad to Additional CIT, Range-2, Aurangabad. additional grounds thus, raised are dismissed. 3. On merits, only issue is to be decided as to whether Commissioner of Income Tax (Appeals) is justified in restricting addition to extent of Rs.52,91,970/- as against Rs.72,37,436/- made on account of estimation of net profit in facts and circumstances of case. 4. Heard both parties and perused materials available on record. brief facts of case as emanating from records are that assessee is partnership firm and engaged in business of Civil Construction. assessee conducts its business under name and 3 ITA No.1595/PUN/2014, A.Y. 2011-12 style of M/s. Anusaya Construction Company, Beed . assessee filed return of income declaring total income of Rs.1,62,17,334/-. Notice u/s. 143(2) and 142(1) of Act was issued. In response to such notices, authorized representative of assessee attended from time to time and furnished written submissions in support of its contentions. 5. On perusal of details filed by assessee, Assessing Officer in order to verify correctness of profit shown and genuineness of expenses asked for various details such as bills, vouchers, month wise purchases, etc. According to Assessing Officer that authorized representative of assessee accepted discrepancies in accounts and expressed their inability to furnish any reasonable explanation. Considering same Assessing Officer rejected books of account in terms of section 145(3) of Act and estimated net profit of Rs.2,33,99,820/- @ 10% of total turnover of Rs.23,39,98,199/-. Thereby, Assessing Officer added further amount of Rs.72,37,336/- (Rs.2,33,99,820 - Rs.1,61,62,484) to total income of assessee vide this order dated 27-02-2014 passed u/s. 143(3) of Act. 6. In challenge, before CIT (Appeals) in First Appellate proceedings assessee vehemently argued that addition made by Assessing Officer by estimating net profit is not maintainable. Further contended that interest and remuneration to partners to be considered in terms of proviso to sub-section (2) of section 44AD of Act. CIT (Appeals) considering submissions of Assessing Officer restricted addition to Rs.52,91,970/- by accepting interest of Rs.14,45,466/- and remuneration to partners Rs.5,00,000/- and deleted amount of 4 ITA No.1595/PUN/2014, A.Y. 2011-12 Rs.19,45,466/-. Before us admittedly there was no appeal by respondent revenue questioning action of Commissioner of Income Tax (Appeals) in deleting addition of Rs.19,45,466/- as it was submitted by ld. DR, Shri Sudhendu Das that respondent revenue did not file appeal as it was covered by then CBDT Circular being below tax effect. 7. Shri M.K. Kulkarni, Ld. Counsel for assessee submitted that by mistake authorized representative admitted discrepancies in accounts of assessee. In actual fact there was no discrepancies in accounts of assessee and by mistake assessee asked to adopt net profit @ 10%. He argued that estimation of net profit is excessive and prayed to restrict net profit as shown by assessee @ 6.91% of total turnover and prayed to allow grounds raised by assessee. 8. Going on relevant material on record, it is seen that assessee did not maintain proper books of account for reasons stated in page 2 of assessment order. When this aspect was confronted to assessee, it agreed with said discrepancies through order sheet dated 25-02-2014, which has been reproduced verbatim on pages 12 and 13 of impugned order, that assessee agreed for estimation of net profit @ 10%. It is on that basis Assessing Officer estimated net profit @ 10% on total turnover and made addition of Rs.72,37,336/-. It was contended before Ld. CIT(A) that net profit @ 10% was agreed before deduction of interest and remuneration to partners. Ld. CIT(A) in all fairness accepted assessee s contentions and treated net profit @ 10% before claim for interest and remuneration to partners totaling Rs.19,45,466, thereby reducing addition from Rs.72,37,436/- 5 ITA No.1595/PUN/2014, A.Y. 2011-12 to Rs.52,91,970/-. On perusal of above factual narration, it is evident that when books of account were not properly maintained by assessee and same fact was confronted, assessee agreed for application of net profit @ 10% and Ld. CIT(A) reducing such net profit by amount of salary interest to partners, there is no infirmity whatsoever in impugned order on this score. We uphold order of Commissioner of Income Tax (Appeals). 9. In result, appeal of assessee is dismissed. Order pronounced in open court on 19th September, 2019. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER Pune Dated 19th September, 2019 RK Copy of Order forwarded to 1. Appellant. 2. Respondent. 3. CIT(A), Aurangabad 4. Commissioner of Income Tax, Aurangabad 5. DR, ITAT, B Bench, Pune. 6. Guard File. True Copy BY ORDER, Private Secretary, ITAT, Pune Anusaya Construction Company of Parli Vaijnath v. Additional Commissioner of Income-tax, Range 2, Aurangabad