Per Agrawal - In this appeal by the assessee relating to assessment year 1984-85, the grievance relates to the addition of Rs. 1,83,570 made by the Assessing Officer. - (1.)
(2.)The assessee has not appeared though notice by registered post AD was sent and duly served. We have, therefore, proceeded on merits ex parte qua the assessee under rule 24 of the ITAT Rules. Theld. D.R. was present and was heard.
The assessee was engaged, in the status of a firm, in the business as a building contractor. Return of income was filed showing total income at Rs. 1,39,630. A revised return was filed under the Amnesty Scheme showing total income at Rs. 2,10,000. The AO noticed, during assessment proceedings, that certain purchases of iron and steel were required to be verified and, therefore, the assessee was asked to furnish the purchase vouchers. The assessee failed to comply. Certain cash credits were also found in the books of the assessee-firm which also the assessee could not explain. The AO, therefore, applied the net profit rate of 10% and determined the income from contract business at Rs. 2,30,889. It was further noticed that certain payments had been made in cash exceeding Rs. 2,500. since it was in violation of section 40A (3) of the Act, a sum of Rs. 1,83,570 was further added.

(3.)THE assessee went in appeal against the determination of business income as well as the addition of the amount representing cash payments. THE CIT (A) determined the business income @ 10% at Rs. 2,15,663. THE gross receipts were verified from the bank certificates and, thereafter, the GP rate was retained but, after verification, the gross receipts were found to be at a lesser amount. As regards, the addition made under section 40A (3), the first appellate authority upheld the addition on the ground that the assessee had failed to furnish any evidence including confirmation before the AO. THE assessee filed three confirmations but the CIT (A) declined to look into that new evidence and upheld the addition made at Rs. 1,83,570.