9911796707
TMI Blog2014 (6) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. That the Ld. CIT(Appeals) erred in confirming the rejection of books of accounts by the Ld. AO although the appellant maintains complete books of accounts and the same were produced before Ld.AO and before Ld. CIT(A). 4. That the Ld. CIT(Appeals) erred in confirming the N P rate applied of 60% by the Ld. AO, which is too high and excessive. 5. That the appellant craves leave to add or alter any of the Ground of Appeal." 2. Ld. AR at the time of hearing inviting attention to the condonation of delay petition placed on record explaining the delay of 14 days submitted that the assessee was critically ill and was advised complete bed rest by the doctor. Affidavit of the assessee and Medical certificate of the doctor concerned in suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iver. Examining the claim of the assessee he found that qua the claim of salary of Rs.3,68,500/- stated to have been paid to the office staff and office boy only names and amount were furnished. Similarly he also observed that no evidence was filed in support of the claim that rent was paid. Accordingly he show caused the assessee to explain why incentive of Rs.26,35,930/-; salary expenses of Rs.3,50,000/-; rent of Rs.2,40,000/-; and professional know how of Rs.3,50,000/- be not disallowed in the absence of any evidence on record. In reply thereto as per page 4 & 5 of the assessment order, the assessee claimed addressing the nature of the work of the assessee who is a trained sea diver that he was to perform the functions on a contract basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him. The assessee is a technical person having special knowledge as a diver in deep water. He was providing expert/technical services to the company, who in turn got contract from ONGC/Others. The appointment letter does not mention anything whatsoever of the execution of any work-contract by the assessee. Although the TDS Certificate issued to the assessee under section 194-C indicates that the assessee is a contractor but the nomenclature in the TDS certificate would not determine the nature of receipts, but the terms of agreements and also the role of the assessee and the actual work done by him would decide the nature of receipts. The assessee has previously worked in Navy and is an expert in diving. The nature of services offered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions advanced confirmed the addition made. Aggrieved by this the assessee is in appeal before the Tribunal. 5. Ld. AR inviting attention to the assessment order and the impugned order contended that on facts the books of accounts have been wrongly rejected as the nature of the assessee's business was that the vouchers supporting the expenditure necessarily were self-vouched. It was also his submission that it is incorrect to hold that no vouchers were produced as the assessee's claim has been rejected on the ground that the expenses were self-vouched. Observations to this effect it was pointed out have been made by the CIT(A) who comments on the nature of vouchers produced. The submissions advanced before the CIT(A) were re-ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actor to work as sub-contractor in view of his skill as a diver under this supervisions and control. The AO assessed the income of the appellant at 60% of the gross receipts without assigning any reasons and ignoring the results for the preceding years wherein for the AY 2007-08 on a gross receipts of Rs.6,60,734/-, NP of 18.05% was offered, for the AY 2008-09 on a gross receipts of Rs.29.51.529/-, NP of 16.14% was offered and for the Ay 2009-10 on a gross receipts of Rs.58,16,837/-, NP of 20.08% was offered. Further, net profit of 8% as per the provisions of section 44AD can be considered reasonable. In support of the contentions, the AR relied upon the case laws of (i) Shri Ram Jhanwar Lal vs ITO [2005] 98 TTJ 639 (Jd.) and (ii) ACIT vs K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal. On the estimation of income at 60% wherein evidently no comparison with any comparable case either of an identically situated assessee in the vicinity or with the assessee's own past history he had no objection in all fairness if the issue is restored. 7. We have heard the rival submission and perused the material available on record. In the facts and circumstances of the present case it is evident that income of the assessee has been estimated in a very arbitrary manner. There is nothing placed on record to justify the estimate of income at 60% of the gross receipts of the assessee. It is a settled legal position that when and if estimate has to be arrived at then the estimate necessarily has to be an honest estimate which may be ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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