2012 (9) TMI 1104 - AT - Income Tax

Summary

Issues involved: Dispute regarding confirmation of Assessing Officer's action in rejection of books and estimation of profits.

Assessment Proceedings:
During assessment, incomplete information provided, no stock register maintained, lack of muster-rolls and Attendance Register with incomplete details. Purchases made without complete vouchers. AO rejected books and applied NP Rate of 12% based on a High Court decision.

Submission before CIT(A):
Assessee maintained books subject to audit, difficulty in maintaining stock register due to nature of work. Claimed to have near-complete purchase vouchers. Explanation on absence of complete muster-rolls and work in progress record. Cited acceptance of lower profit in previous years.

CIT(A) Decision:
Disagreed with submissions, emphasized importance of correct valuation of closing stock. Found lack of address in labour attendance register affecting authenticity. Distinguished Tribunal's decision in earlier year due to complete books and bills produced. Confirmed income estimation at 12%.

Appellant's Argument:
Claimed availability of 83-90% bills for purchases, requested remittance or reasonable NP Rate estimation. Argued against 12% rate citing nature of road construction business.

Final Decision:
After hearing both parties, remand deemed unnecessary due to lack of verifiable vouchers and incomplete labour attendance details. Noted acceptance of lower profit in past without enquiry. Set aside CIT(A) order, directed AO to apply NP Rate of 6% considering nature of road construction business.