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Issues:
1. Deletion of addition of Rs. 77,000 in respect of unexplained liabilities in labor charges account. 2. Application of G.P. rate of 15% on contract payments receipts. Analysis: 1. The Revenue appealed the deletion of Rs. 77,000 addition in labor charges account by CIT(A). The balance sheet showed liabilities for outstanding labor payments. The AO added the amount due to lack of evidence. However, CIT(A) noted similar liabilities in previous years' balance sheets and upheld the deletion, citing the application of G.P. rate on contract receipts. The assessee submitted a list of outstanding labor payments, which was not presented to the AO during assessment under s. 144. Despite the reduction in liability from Rs. 72,000 to Rs. 5,000, the CIT(A) maintained the deletion based on past assessments and estimated income. The Tribunal found no merit in the Revenue's appeal, upholding the deletion of the addition. 2. The cross-objection by the assessee supported the deletion of the Rs. 77,000 addition. However, since the Revenue's appeal was dismissed, those grounds became irrelevant. Regarding the application of a 15% profit rate on contract payments, the CIT(A) referred to a prior order confirming the rate but noted lack of substantiation. The current CIT(A) upheld the profit rate based on the previous decision and the absence of further appeals. The Tribunal agreed with the CIT(A)'s decision on the profit rate application, leading to the dismissal of both the Revenue's appeal and the assessee's cross-objection. In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 77,000 in labor charges account and confirmed the application of a 15% profit rate on contract payments. Both the Revenue's appeal and the assessee's cross-objection were dismissed based on the findings and reasoning provided in the judgment.
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