Piyush Developers (P) Ltd., Faridabad vs Department Of Income Tax

PAN: AACCV 2714 R ITA No. 5708/Del/2010 AY: 2008-09 ACIT, CC 1 vs. Varsa Buildwell India P.Ltd. Faridabad New Delhi

(Appellant) (Respondent)

Assessee by : Sh. Sudhir K Sehgal, Adv. Dept. by : Sh. Syed Nasir Ali, CIT, D.R. ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10

ORDER

PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER

These are Cross Appeals belonging to different assesses directed

against separate orders of the Ld.CIT(A) dated 29.9.2010 pertaining to the

A.Y. 2008-09 in the case of M/s Piyush Developers Pvt.Ltd; and order dt.

29.9.2010 for the A.Y. 2008-09 in the case of M/s Varsa Buildwell India

Pvt.Ltd. Admittedly as the issues are identical, and the orders of the A.O.

as well as the First Appellate Authority are identical in the case of both the

assesses, for the purpose of convenience they are heard together and are

disposed of by way of this consolidated order.

2. The Ld.Counsel for the assessee Shri Sudhir K Sehgal, and Shri Syed

Nasir Ali, Ld.CIT, D.R. submitted that the arguments made by both the

parties in the case of M/s Piyush Developers Pvt.Ltd. may be adopted for

Varsa Buildwell India P.Ltd. also.

3. Facts in brief:- The assessee is engaged in Real Estate development

and construction activity. It does not own land. It carries out construction

activity and development activity, in the capacity of a contractor, on the land

owned by its clients. The assessee neither purchased land nor sells the

same.

3.1. A search and seizure operation was conducted on Piyush group of

companies on 16.1.2008 both at the office premises as well as at the

residential premises of the Directors. Certain documents were seized and

impounded, certain cash and jewellery was also found. Survey u/s 133A of

2 ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 the Act was conducted in the office premises of some of the assesses in the

group on the same date.

3.2. Notice u/s 142(1) dated 7.9.2001 was issued to M/s Piyush

Developers Pvt.Ltd. In response, the assesses filed a return of income on

12.10.2009 declaring income of Rs.61,79,070/-. M/s Varsa Buildwell

India P.Ltd. filed return of income on 17.3.2010 declaring income of

Rs.50,84,390/-.

3.3. In the case of M/s Piyush Developers Pvt.Ltd. the AO completed

assessment u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961 (the Act) on

29.12.2009 determining the total taxable income at Rs. 3,51,14,490/-. He

made addition of Rs.2,89,34,711/-. The purchases from three parties i.e. a)

M/s Jai Ambey Trading Co. b) M/s Shri Ganpati Enterprises c) M/s

Niranjan Parshad Jai Gopal were held as bogus and non-genuine. The

reasons for disallowing this purchase expenditure are given at page 4 of the

assessment order which is extracted for ready reference.

"The assessee has not furnished any details except bills/vouchers of purchases and details of payment made. The assessee has not furnished confirmed copy of account, income tax particulars of the parties, correct addresses of the parties and also failed to produce the above parties during the course of assessment proceedings. The enquiry made also reveals that the said firm M/s Jai Ambey Trading Co. And M/s Shree Ganpati Enterprises, do not exist at the given address at plot no.108, D.C.Colony, Mujjessar, Faridabad, during the last 6-7 years and 981/2, Gali No.2, Bhoor colony, Faridabad during the last 5-6 years respectively. In view of the above, the genuineness, identity and credit worthiness of the parties from whom purchases are shown remained unverified."

3.4. Aggrieved, the assessee carried the matter in appeal. The First Appellate Authority deleted the addition by holding that the assessee has

3 ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 furnished copies of bills, purchase vouchers, material receipt notes, copies of GRs along with evidence of weighment of goods from dharmkanta and as all the payments made to the parties by account payee cheques. The First Appellate Authority also held if these purchases are disallowed, the gross profit margin would jump to 68% which is abnormal in this line of business. He also pointed out that the A.O. has not given a finding that the consumption of material has not taken place and that 41.44% of the purchases were disallowed, while sales were not doubted. He held that the parties are registered with Sales Tax dept. and VAT has been charged. He granted relief by deleting the disallowance on account of bogus purchases. At the same time the First Appellate Authority rejected the books of the assessee on the ground that the assessee had failed to file confirmation from the parties and the gross profit rate disclosed by the assessee is less than the gross profit disclosed by the other concerns of the group and there after went on to estimate the gross profit of the assessee at 27% as against 16% declared by the assessee.

4. Aggrieved by the deletion of addition on account of bogus purchases, Revenue has filed appeal before us on the following grounds.

"1. The Ld.CIT(A) has erred both in law and on facts of the case in deleting an addition of Rs.2,89,34,711/- made on account of bogus purchases, without appreciating that despite abundant opportunities given by the AO and being confronted on record, the assessee failed to produce the parties and to prove genuineness, identity and creditworthiness of the parties from whom the alleged purchases were made, the onus for which had squarely shifted on the assessee after the relevant parties were not found to exist at the addresses furnished by the assessee to the AO.

2. The Ld.CIT(A) has erred both in law and on facts of the case in deleting the said addition of Rs.2,89,34,711/- made on account of bogus purchases despite the fact that the CIT(A) himself, in the course of appellate proceedings gave the assessee an opportunity to produce the parties and to file confirmations before the AO, for which the assessee expressed his inability to do so on the grounds of "gap of such a long time", a contention which appears untenable in view of the huge quantum involved in the purchases.

3. The Ld.CIT(A) has erred both in law and on facts of the case in deleting the said addition of Rs.2,89,34,711/- made on account of bogus purchases

4 ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 despite the fact that the CIT(A) himself held that books of account of the assessee cannot be said to be reflecting a true and fair view of its financial and business affairs and the same are liable to be rejected.

4. The Ld.CIT(A) has erred both in law and on facts of the case in directing the AO to compute gross profit @ 27% instead of 16% shown by the assessee, whereas the AO had rightly disallowed the bogus purchases amounting to Rs.2,89,34,711/-.

5. The appellant craves leave to add, amend the grounds of appeal on or before the appeal is heard and disposed of.

6. It is prayed that the order of CIT(A) be set aside and that of the AO be restored."

5. Aggrieved on the issue of estimation of gross profit and rejection of books of accounts the assessee has filed appeal before us on the following ground.

"The order of the CIT(A)-I, Ludhiana is bad in law and against the facts and circumstances of the case.

2. That having regard to the facts and circumstances of the case, the CIT(A)-I, Ludhiana has erred in law and on facts in holding that the books of accounts of the assesses are liable to be rejected.

3. The CIT(A)-I, Ludhiana has erred in directing the AO to recompute the total income of appellant by taking gross profit @ 27% to instead of 16% shown by the appellant.

4. That the action of the CIT(A)-I, Ludhiana in actual gross profit at 16% shown in directing the AO to recompute the total income of appellant by taking gross profit @ 27% to instead of 16% shown by the appellant is based on imagination and guess work and without any material on record and is against the facts and circumstances of the case.

5. Without prejudice to ground nos. 1,2,3 and 4 above, the CIT(A)-I, Ludhiana has erred in giving direction to the AO to adopt gross profit at 27% in the case of the appellant which is highly excessive.

5 ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10

6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off."

6. We have heard Shri Sudhir K Sehgal, the Ld.Counsel for the assessee and Shri Syed Nasir Ali, Ld.CIT, D.R on behalf of the Revenue.

7. The Ld.CIT,D.R. relied on the order of the A.O. and submitted that the assessee could not produce these three parties before the A.O. and enquiries made by the A.O. demonstrate that these particular firms were not existing at the addresses given for the last six to seven years. He argued that the assessee had not furnished confirmation copies of accounts, income tax return etc. of these firms and under those circumstances purchases made by them were rightly held as non genuine by the A.O. He submitted that mere payment through cheques does not demonstrate genuineness of the transactions.

8. The Ld.Counsel for the assessee Mr.Sehgal on the other hand relied on the order of the First Appellate Authority and submitted that the identity of the parties from whom purchases were made was beyond doubt because they were registered with the sales tax department and had paid VAT. He argued that payments were made through banking channels and the evidences such as copies of bills, purchase invoices, material weighment proofs, material receipt notes along with bill numbers and truck numbers, were produced as well as entries in stock registers and the consumption of material to prove the genuineness of the transaction. He strongly disputed the claim of spot enquiry by the Revenue and submitted that there is no basis for coming to such a conclusion and no effort was made to reach the parties through the postal authorities. He relied on number of case laws and submitted that there is a violation of principle of natural justice as the record of spot enquiries was not put to the assessee. He argued that all possible documentary evidences were furnished, and hence the assessee has discharged the burden of proof that lay on it and the onus shifted to the Revenue. He pointed out that the value of the work and value of closing stock were accepted by the AO and no defects were found in the books of

6 ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 accounts and there is no rejection of books of accounts by the A.O. He pointed out that certain material was found and seized during the course of search, no adverse view was taken by the A.O. and that the material seized does not disclose any bogus purchases, inflation of expenses etc.

9. On the assessee's appeal, the Ld.Counsel for the assessee submitted that the First Appellate Authority held that the books of accounts of the assessee are liable to be rejected, though the A.O. had not rejected the books of accounts, for two reasons - (a) confirmations were not filed and parties were not produced. (b) The other reason was that the gross profit rate of the assessee is less than the gross profit rate of other concerns of the group. He relied on a number of case laws and argued that this cannot be a ground for rejection of books of accounts on the issue of not filing of confirmations and not producing parties from whom purchases are made, he pointed out that the Ld.CIT(A) has accepted the contentions of the assessee and deleted the disallowances and in contradiction to his own action, takes a view that the books of accounts of the assessee should be rejected. On the second issue he submitted that the rejection of books cannot be made on the basis of the fact that the gross profit rate of the assessee is less than that of the other concerns. Thus he submitted that the rejection of books of accounts by the Ld.CIT(A) is bad in law and this action is to be vacated and consequently the estimates of Net Profit is also to be held as bad in law.

10. The Ld.D.R. supported the order of the Ld.CIT(A) and relied on the

same. He submitted that the assessee has disclosed very low net profit and

hence the books are not reliable, specifically when the purchases have not

been proved as genuine by the assessee.

11. Rival contentions heard. On a careful consideration of the facts and

circumstances of the case, on perusal of material on record, orders of the

authorities below, case laws cited, we hold as follows.

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12. We first take up the Revenue's appeal.

13. As already noted the assessee is a real estate contractor. Purchases

from three parties have been disallowed, on the ground that the assessee

failed to produce those parties and has not furnished certain details such as

confirmation of copy of accounts, income tax particulars etc. When we see

the quality of evidence produced by the assessee before the A.O. we have to

come to a conclusion that the First Appellate Authority was justified in

deleting the addition. The assessee in this case has furnished all possible

evidences in support of the factum of purchases from these three parties.

The evidences include, copies of the bills wherein detailed notings had

been made in respect of the material which had been purchased by the

appellant, purchase vouchers prepared by the assessee in the normal course

of business, evidences by way of the material weighment proofs, copies of

the GRs or material receipt notes showing the delivery of the goods to the

assessee where the bill number and truck number has been mentioned.

Evidence of payments having been made by account payee cheques had also

been filed. Such payments have also been cleared from the account of the

assessee and no payment is outstanding as on 31st March, 2008. These

evidences in our view cannot be ignored unless contrary material is found

by the revenue. No such material is available with the revenue even after

search.

14. The First Appellate Authority at para 19 of his order has held as

follows:-

8

ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 Perusal of profit and loss account of the appellant shows the details as under:

Particulars Amount Particulars Amount (In Rs.) (In Rs.) Purchases 69,828,060 Value of -work 55,430,587 certified Direct Cost 4,372,857 Closing Stock 27,639,224 Gross Profit 8,868,894 83,069,811 83,069,811 Total Total

Based on the above analysis GP margin of the assessee comes to 16%. If purchases of Rs. 2,89,34,711/- are treated as bogus and the same is added to the gross profit then the GP margin would come to 68.20%. Assessing Officer has not cited any comparable case to justify such a high GP of 68.20%. Thus the whole trading results would present a distorted picture if the Assessing Officer's version is accepted which in my opinion is practically impossible. This view is duly supported by the two judgments of Hon'ble Chandigarh Bench of ITAT in the case of J.R. Solvent Industries (P) Ltd. Vs. ACIT (1999) 68 ITD 65 (Chd) (TM) and in the case of M/s Raj & San Deeps Ltd. Vs. ACIT, Ludhiana in ITA No. 1853/Chandi/92."

Thereafter at Page 22 the ld CIT(A) held as follows:-

"4.11. If A.O's action of disallowing purchases of Rs.2,89,34,711/- treating them as bogus is accepted then following position would emerge :

Total purchases Rs.6,98,28,060 Less: Purchases disallowed Rs.2,89,34,711 Balance purchases accepted by AO Rs.4,08,93,349 Less: Closing stock Rs.2,76,39,224 Balance material consumed Rs. 1,32,54,125

From the aforesaid details it follows that from the material of Rs.1,32,54,125/- assessee has shown work certified of Rs.5,54,30,587/- which in my opinion is practically not possible unless of course proved by the AO which the AO has not done."

These factual finding could not be controvered by the Ld.D.R.

14.1. No defects have been found in the stock register nor any defects

have been pointed out by the A.O. in the audited books of accounts

9 ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 maintained by the assessee. Despite search and seizure no adverse material

was found to substantiate the disallowance made by the A.O. The so called

spot enquiry done by the Inspector has no credence as no details have been

filed before us, nor was the assessee confronted with the manner in which

spot enquiry was conducted, the persons who conducted the spot enquiry or

the material gathered by the Revenue in the spot enquiry. Thus the

Revenue cannot place reliance on this enquiry. The purchases which are

disallowed relate to cement and steel which are essential for the purpose of

construction. No enquiries are made with the banks, other statutory

authorities on the identity of the parties. Details such as whether sales tax

authorities have accepted the quantum of purchases made by the assessee

have not been obtained Identity could be ascertained by the AO, both from

the banker and the sales tax authorities. Under the circumstances we have

to uphold the contentions of the assessee, that the finding of the AO, that

the assessee has not furnished full details, is factually in correct.

14.2. Coming to the identity of the parties we find that all the parties

are registered with sales tax department and have charged VAT in each of

the bills. All these parties have bank accounts and payments were made

through account payee cheques. Evidence of material having been received

by the assessee, has been filed.

14.3. As regards the fact that the assessee was not able to produce

the parties, we agree with the contentions of the assessee that non

production of the parties cannot be a ground of disallowance of all the

purchases for the following reasons.

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ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10

(i) The persons from whom purchases are made could not always be in the

control of the assessee, specifically when they are unrelated parties.

(ii) The volume and quality of evidence produced by the assessee is such

that non production of the party from whom the assessee purchased cannot

lead to a conclusion that the purchases are not genuine.

The Ld.CIT(A) at para 4.4 held as follows.

"4.4. It is also seen that during the course of assessment proceedings the assessee had filed various evidences (which have been filed in the paper book) of the purchases made from the said parties in the shape of copies of bills, purchase vouchers, material receipt notes, as well as the copies of bank statement of the assessee company evidencing the payment made to the said parties, which have been cleared from the account of the assessee. In few cases copies of GRs alongwith evidence of weighment of goods from dharmkanta have been filed by the assessee. It is also an undisputed fact that the invoices issued by the various parties are bearing the truck number of the vehicle used for delivery of goods and VAT has also been charged by the parties in their bills. The goods mentioned in the bills are mainly cement and steel (TMT bars) which are the basic component required for construction of any building or complex. The evidence of receipt of such goods by assessee 'in the form of purchase voucher/material receipt note is also there. Most importantly as stated by the AR all the payments made to the parties have been made by account payee cheques and same have been cleared from the assessee's bank account. The ld. AR has also brought my attention to the fact that the assessee is maintaining item wise stock register copies of which were filed before the Assessing Officer during the course of assessment proceedings and no defect has been found in the same. Thus it is observed that sufficient pieces of evidence of transactions of the purchases made from various parties have been produced by the appellant which have not been denied by the Assessing Officer and have not been found to be false. Therefore, in such

11 ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 circumstances there was heavy onus on the Assessing Officer to prove otherwise which has not been discharged by him and on the other hand initial onus on the assessee has been discharged. The Hon'ble Apex Court in Daulat Ram's case 87 ITR 349 has held that the onus to prove that the apparent was not real was on the party who claimed it to be so. Thus the onus was. heavily on the Assessing Officer in this case. The Assessing Officer has also mentioned the fact of making certain SP9t. enquires which according to him have revealed that parties M/s Jai Ambe Trading Company and M/s Shree Ganpati Enterprises did not exist at their given addresses for 6-7 years. AR stated and assessment order also does not show that such facts or the enquiries have been confronted to the appellant. Assessing Officer has thus disallowed purchases in violation of principles of natural justice in such circumstances I am in agreement with the contentions of Id. AR that the action of the Assessing Officer in simply brushing aside the evidences before him was highly unjustified in the facts and circumstances of the case."

These findings of the Ld.CIT(A) could not be controverted by the

Ld.D.R. We find no infirmity in the same.

(iii) The other aspects are that the value of work certified, the value of

closing stock have been accepted by the A.O. Both these cannot be

independent of the value of purchases. The purchases either form part of

work certified or closing stock. When both these are accepted and not

disturbed, the question of disallowing the purchases debited in the profit

and loss account does not arise.

(iv) The Ld.CIT(A) has rightly analysed that if this disallowance of purchases

is upheld then the G.P. rate of the assessee would be abnormal at 67%.

(v) The Hon'ble Calcutta High Court in Diagnostics vs. CIT (2012) reported in 20 taxmann.com 692 (Cal.) at paras 9 and 10 held as follows. 12

ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 "9. However, as regards the payments made to M/s Selvas Photographics are concerned amounting to Rs.3,12,302/- we find that those have been made by account payee cheques and those have been encashed through the bankers of M/s Selvas Photographcis. It appears that according to the appellant, at the time of assessment, the appellant had no business transaction with M/s Selvas Photographics and consequently, the said party did not cooperate with the AO. However, the transaction having taken place through account payee cheques, we are unable to accept the contention of Mr.Agarwal, the Ld.Advocate appearing for the Revenue that the transaction was a non-existent one. If an assessee took care to purchase materials for his business by way of account payee cheques from a third party and subsequently three years after the purchase, the said third party does not appear before the AO pursuant to the notice or even has stopped the business, the claim of the assessee on that account cannot be discarded as non existent. In the case before us, the Revenue has not put forward any other ground, such as, it was not a genuine transaction for other reasons but has simply rejected the claim on the ground as if there was no such transaction.

10. The transaction having taken place through payment by account payee cheques, such plea is not tenable and in such circumstances, the Tribunal below erred in law in reversing the finding arrived at by the CIT(A) accepting the said transaction as a genuine transaction." (Emphasis ours).

14.4. In view of the above discussion we uphold the finding of the

Ld.CIT(A) on the deletion of the disallowance of Rs.2,89,34,711/-, which was

treated as bogus purchases by the A.O. These grounds of Revenue are

dismissed.

15. In the result Revenue's appeal is dismissed.

16. We now take up assessee's appeal. The First Appellate Authority has

sought to reject the books of accounts on two grounds.

(a) the assessee failed to file confirmations and produce the parties from

whom purchases were made.

(b) the gross profit rate of the assessee is less than the gross profit rate of

other concerns in the group.

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ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10

17. As far as the first issue is concerned we refer to our detailed

discussion in the Revenue's appeal and hold that the First Appellate

Authority has taken a contradictory stand. The Ld.CIT(A) held that the non

production of parties etc. on the facts and circumstances of the case, does

not justify disallowance of the claim of expenditure on account of purchases.

On the other hand he cites the same reason for holding that the books of

accounts are not reliable and have to be rejected. Such a contradictory view

cannot be countenanced.

18. The second ground on which books were rejected is also not

sustainable.

(i) The Hon'ble Delhi High Court in the case of CIT vs. Paradise Holidays

reported in 325 ITR 13 (Del) has held that where the AO has not pointed out

any specific defect or discrepancy in the account books maintained by the

assessee which are duly audited by an independent chartered accountant,

there was no justification in rejecting the books of accounts and making the

addition to the declared income.

(ii) Similarly the Hon'ble Delhi High Court in the case of CIT vs. Poonam

Rani in ITA 406/Del/2009 judgement dt. 7.5.2010 has held that "the fall in

gross profit ration, in the absence of any cogent reasons could not, by itself,

have been a ground to hold that proper income of the assessee cannot be

deducted from the accounts maintained by her and consequently, could not

have been a ground to reject the accounts invoking Sec.145(3) of the Act."

There are number of decisions on the same lines.

14

ITA 5599/Del/2010 - A.Y. 2008-09 (Piyush Developers P.Ltd.) ITA 5706/Del/2010 - A.Y. 2008-09 ITA 5708/Del/2010 - A.Y. 2008-09 (Varsa Buildwell India P.Ltd.) ITA 1574/Del/2013 - A.Y. 2009-10 18.1. In view of the above discussion and as no defects have been pointed out in the books of accounts, we uphold the contentions of the assessee and vacate the finding of the Ld.CIT(A) on estimation of gross profit. The direction given to the AO to recompute the assessee's gross profit @ 27% instead of at 16% is hereby vacated and this ground of the assessee is allowed.

18.2. As already stated, the grounds of appeal and facts in the case of Piyush Developers Pvt. Ltd and in the case of M/s Versa Buildwell India P.Ltd. are the same. Hence we follow our decision in the case of Piyush Developers Pvt.Ltd. and allow the appeal of the assessee in the case of M/s. Versa Buildwell India (P) Ltd. And also dismiss the revenue's appeal in this case. Hence both the appeals of the assesses are allowed and both the appeals of the Revenue are dismissed.

19. In the result, the appeals of the Revenue in both the cases are dismissed and both the appeals of the assessee are allowed.

Order pronounced in the Open Court on 8th July, 2015.

-Sd/- -Sd/- (H.S. SIDHU) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 8th July, 2015

 Manga Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY

By Order, ASSISTANT REGISTRAR

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