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TMI Blog2012 (10) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... the same for the cogent reasons recorded in the assessment order. CIT(A) had also endorsed to the view of the AO. On examination of these facts, view of the revenue with regard to rejection of books of accounts is upheld. However, taking a lenient view considering the nature of business GP at 9% is taken instead of 6.88% declared by the assessee - Decided partly in favor of assessee - ITA No.541/Ahd/2012 - - - Dated:- 13-7-2012 - SHRI G. C. GUPTA AND A. MOHAN ALANKAMONY, JJ. Appellant by Shri Rajesh M. Upadhyay, AR Respondent by Shri Vinod Tanwani, Sr. DR ORDER PER A. MOHAN ALANKAMONY : This appeal is filed by the assessee aggrieved by the order of the learned CIT(A)-IV, Surat in appeal No.CAS-IV/151/10-11 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of the assessee in this line of trade of labour supply. 2. Among other defects, the chief defect has been the absence of any basis on which the wage register has been created and maintained. The attendance in terms of no. of days worked by any labourer were been seen to vary on the wage register. This pre-supposed the existence of some attendance recording system like the attendance register, hajiri cards/Mugdam s register etc. Without these primary documents, the wage register would lack any foundation or basis. But, the assessee failed to produce any sound proof of attendance recording arrangements of the wage labourers employed. Thus it became evident that the wage register has been created on the basis of unverifiable and unrecor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the learned AO worked out the following chart and based on the statistical data extracted in the chart, estimated the income of the assessee at 14.63% and thus made an addition of Rs.12,81,376/- being short fall of profit declared by the assessee (14.63% - 6.88% = 7.75%, 7.75% of Rs.1,65,33,549/- = Rs.12,81,376/-). A. Y. Works Receipts (In Rs.) Gross Profit (In Rs.) G.P. (In %age) Average G. P. % 2008-09 1,65,33,549 11,38,076 6.88% 14.63% 2007-08 61,14,732 11,23,503 18.37% 2006-07 48,54,439 9,05,044 18.64% 6. The assessee carried the mater before the learned CIT(A). The learned CIT(A) after lengthy deliberation arrived at the following conclusion: 3. I have gone throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, which by his own admission is highly profitable, has gone up from Rs.7,50,579/- to Rs.28,60,292/- in M/s. Jay Bhawani Enterprises and from Rs.5,84,654/- to Rs.10,08,048/- in M/s. Dimple Enterprises. In Dimple Enterprises, this constitutes more than 90% of the business this year and it is also noted that in the preceding year, this activity earned GP of 18.65%. Similarly, it is seen that in Jay Bhawani Water Supply in A. Y. 2007-08 the GP was 19.48% and income comprised primarily of water supply. If these percentages are applied to income from similar activity in the current year in Jay Bhawani Enterprises then it is seen that gross profit from these two activities alone should be Rs.12,55,200/- whereas GP from all activities including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion wherein it was contended that due to increase in material cost from 3.21% last year to 28.31% in the present year and payment of service tax in the present year @7.6% there was fall in GP, which fact have not been considered by the revenue authorities. It was further contended by the learned AR relying on the decision of ITAT Ahmedabad Bench in the case of ACIT Vs Nanavai Motors that mere defect in maintenance of wage register alone cannot be the ground for invoking provisions of section 145 of the Act without pointing out any specific defects in the audited books of account of the assessee. However from the facts of this case we find that the learned AO had examined the books of accounts and statement of affaires maintained by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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