9911796707
TMI Blog1999 (12) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... et profit rate of 10.5 per cent applied by the AO and confirmed by the CIT(A) is extremely arbitrary and excessive. The assessee had declared net profit rate of 8.69 per cent which is most reasonable and justified. The learned counsel also drew our attention towards order of the CIT(A) in assessee's case for asst. yr. 1989-90 wherein reference of an order of Tribunal in assessee's case for 1986-87 has been given. The Tribunal had applied net profit rate of 10 per cent in assessee's case in asst. yr. 1986-87. The learned counsel strongly urged that the declared net profit rate should be accepted. 2.2. The learned Departmental Representative supported the order of the CIT(A). He also relied upon the decision of Tribunal in the case of Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l authorities. The AO estimated the net profit rate of the assessee on contract receipts by applying npr of 10.5 per cent on contract receipts of Rs. 22,77,003. Thus, net profit on contract receipts was determined at Rs. 2,39,089. The AO had separately allowed depreciation to the tune of Rs. 28,386 and also allowed interest to the tune of Rs. 5,249. The CIT(A) confirmed the action of the AO. 4. In our view it will be just and reasonable to direct the AO to apply npr of 10 per cent on contract receipts as was held by the Tribunal in assessee's own case for asst. yr. 1986-87. The npr on contract receipts will thus come to Rs. 2,27,700 out of which the AO has already separately allowed deduction aggregating to Rs. 33,635 on account of deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that Hukmaram derived income from agriculture and from animal husbandry. The ITO made certain inquiries behind the back of the assessee. An Inspector was sent to the depositors' place. He recorded the statement of both these depositors in which these two depositors denied having made any deposit with the assessee. Later on both these depositors were produced before the AO. The AO recorded their statements. Both of them confirmed the fact of having made the deposits with the assessee. They have also explained the source wherefrom such deposits were made. Both of them are not related to the assessee. The learned counsel contended that statements recorded behind the back of the assessee by the IT Inspector are not valid statements as the Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the submissions made by the learned representatives of both the parties and have perused the records to which our attention was drawn during the course of hearing. 8. Shri Kundanlal, son of Shri Hariram, made deposit of Rs. 5,000 with the assessee on 16th Sept., 1987. A perusal of the statement of Shri Kundanlal recorded by the AO inter alia reveals the following facts: (a) That he owns 125 bighas of agricultural land and also owns 10 cows. (b) He derives income from agriculture as well as from sale of milk. (c) He confirmed having made a deposit of Rs. 5,000 to the assessee. (d) He also confirmed that the affidavit on a stamp paper was signed by him. All the aforesaid facts stated in the affidavit of Shri Kundanlal as well in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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