9911796707
TMI Blog2014 (5) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... abour/wages paid was a necessary component for the purpose of executing the contract. Profit rate applied by the authorities below at 6.5% is very excessive and unreasonable. The assessee has agreed for application of net profit rate of 4% of the gross receipts before salary and interest to the partners before the AO, which in our view is most reasonable and appropriate considering the previous history of the assessee and facts and circumstances of the case. Therefore, to meet the ends of justice, we modify the orders of the authorities below and direct the AO to apply net profit rate of 4% of the gross receipts before salary and interest to the partners for the purpose of estimating business income of the assessee - Decided partly in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO that proper records are maintained and each entry of wages have been made in the books of account. In this year, there was no work of Bitumen, but the work was related to WBM and in this kind of work, labour charges are on very higher side. It was also explained that the assessee was not having sufficient plant and machinery and the work is completed with the help of labour. Profit rate declared at 2.49% is reasonable as compared to the last year. The contract work was awarded two to three years back and the cost of material and wages was comparatively less and when work was executed, the cost of raw material and labour has increased. The assessee is also not having sufficient capital, therefore, remained dependent upon higher rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld as under : Rejection of books of account of the assessee not being in controversy, application of the rate of profit in accordance with that applied in the earlier years is really a question of fact in the present case. At any rate, there is nothing to indicate that the Tribunal s finding on this point is unjustified. (ii). Decision of Punjab Haryana High Court in the case of CIT vs. Pawan Kumar , 316 ITR 324, in which it was held as under : Tribunal having applied GP rate of 10 per cent to estimated sales of bricks after considering assessee s past history and the GP rate in subsequent years as against 14 per cent applied by the AO, finding of the Tribunal is a pure finding of fact and no substantial question of law arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the facts of the case in the light of the case laws cited above, we are of the view that rejection of books of account has not been challenged by the assessee. Therefore, no further interference is called for in the matter. However, we are of the view that authorities below have applied excessive net profit rate of 6.5% against total receipts before allowing interest and salary to the partners. History of the assessee clearly suggests that the assessee has reasonably declared profit rate of 2.49% as against 2.66% of the preceding assessment year. The total receipts of the assessee have admittedly exceeded very high as against the receipts declared in the last year. Therefore, when the receipts have exceeded, there is bound to be fall in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
