9911796707
TMI Blog1977 (5) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... it and the contract for construction of houses and hospitals buildings from Salem Municipality. It field a return disclosing income of Rs. 64,149 for the assessment year under consideration. The ITO noticed that the assessee had received in all Rs. 11,82,592 and the net income of Rs. 50,420, disclosed worked out to about 4 per cent. He was of the view that the percentage was poor. He further noticed that most of the purchases were not supported by proper vouchers and the cooly payment of Rs. 497,948 was also not completely supported. He, therefore, rejected the books as unreliable and estimated the profit adopting a rate of 12 per cent. Thus, by his order dt. 16th Oct., 1975 he determined the total income as Rs. 1,41,909. 3. Aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Housing Board. She, therefore, confirmed the assessment. Hence, this appeal. 4. Sri R. Venkataraman, the learned counsel for the assessee strenuously contended before us that income returned should have been accepted and that no case has been made out for any addition. He urged that this was the second year of the business, the partnership having been formed in the previous year, relevant for the asst. yr. 1972-73. According to him, though the assessee had not maintained books properly for the accounting year ending 31st March, 1972, books have been maintained for the accounting year under consideration in a proper manner and should not have been rejected, He also pointed out that the assessee had made a tender on 10th Dec., 1971 for a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmally the income in such business is about at 12 per cent. In this case, however, it is seen that though the assessee had made the tenders in December 1971 and January 1972 they were accepted only in February 1972 and May 1972 respectively. There is also the fact that the capital invested to the assessee was only about Rs. 10,000 and that the assessee had borrowed about Rs. 2,05,000 from State Bank of India and others. It is no doubt true that about a lakh of rupees out of the borrowings had been overdrawn by the three of the partners. But it is to be noticed that interest of Rs. 4,598 has been charged on two of the partners. In any event, a payment of interest of Rs. 10,000 out of Rs. 18,759 can be considered as on borrowings which have b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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