9911796707
TMI Blog2015 (9) TMI 1561X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as under:- That the Ld. CIT has wrongly upheld the addition made by the Assessing officer by applying the net profit rate @ 12% instead of 7% on the gross receipts as declared by the appellant. 3. For the sake of convenience, we will take up the facts from ITA No. 558/Chd/2014 for assessment year 2007-08. The assessee (Individual) filed his return of income on 12.5.2011 declaring a taxable income of Rs. 71,97,950/-. The return was not processed as the same was invalid. Subsequently, notice u/s 148 was issued to the assessee on 31.3.2013. In this case an information was received from the office of the Dy. Director of Income-tax (Inv.)-I, Chandigarh which revealed that the assessee had made cash deposits to the tune of Rs. 6,60,29,200/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Profit & Gains from Business or Profession") and computed his tax liability." 4. The assessee was required to submit the return in response to notice u/s 148 of the Act but the assessee failed to make the compliance. Subsequently, statutory notices were issued to the assessee. In response to the statutory notice and questionnaire, the assessee stated that during the relevant period he was a proprietor of M/s R.D. Construction Company and during the period the said firm was engaged in the business of fabrication and erection of steel structures for various private concerns. The assessee failed to produce audit report, balance sheet and profit and loss account pertaining to the year under consideration. The assessee through his counsel furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at where the books of account are not maintained properly/accurately or not maintained at all, the Assessing officer can estimate the net profit of the assessee according to the information gathered and materials available on record, vis a vis the nature of business activity carried out by the assessee. The Assessing officer has further mentioned that the assessee could not produce any bills/vouchers or any other evidence/proof in the form of bank entry etc. pertaining to the expenses incurred by him during the course of business. From the information which was gathered by the Assessing officer, it came to his notice that the assessee was indeed involved in contractual work. According to Assessing officer, the rate of net profit as declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from whom he had made purchases during the period relevant to the assessment year under consideration. The assessee had shown net profit of Rs. 72,61,135/- by applying an average rate of approximately 7% of the gross receipts from business. The net income disclosed by the assessee is on estimated basis since he had not maintained any books of account. The Ld. CIT(A) has made significant observation that assessee is not a civil contractor. He was doing fabrication work, which requires higher expertise and therefore, yields higher profit. According to CIT(A), the assessee's main item of expenditure was on labour but when the CIT(A) asked the assessee about the number of the persons the assessee had employed, the representative of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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