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TMI Blog2016 (6) TMI 1498X X X X Extracts X X X X X X X X Extracts X X X X ..... de in the hands of any of the assessee, fair estimate should be made keeping in mind the nature of activity carried on by the said person and also taking into consideration the past or the future results shown by the assessee in this regard. There is no merit in estimating the net profit in the case of the assessee @ 15% especially in view of the past and future results shown by the assessee from year to year where the assessee is an association of labourers who, in turn, were taking up the Government contract for the repair of roads/buildings. AO is directed to compute the income in the hands of the assessee by applying net profit of 5%. The assessee is not entitled the claim of deduction u/s 80P(2)(a)(vi) of the Act - Appeal of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t pressed. Consequently, the grounds of appeal No. 1, 3 and 4 were not pressed and hence the same are dismissed as not pressed. 4. The issue in the ground of appeal No. 2 is against the estimation of income in the hands of the assessee @ 15% of the contract receipts resulting in working out the net profit of Rs. 32,53,148/-. 5. The Ld. Authorized Representative for the assessee pointed out that the issue of rejection of books of account is not pressed but was strongly opposing the estimation of income by adopting a higher rate of percentage, especially in the case of the assessee where he was executing the repairs of roads/buildings of the Government. In this regard, he pointed out that the except for the year under consideration i.e. A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air of roads/buildings. As per audit report, the gross receipts for the year were shown at Rs. 2,06,80,256/- on which the assessee had declared gross profit of Rs. 18,38,256/- declaring GP rate of 0.68%. The first issue which arose in the case of the assessee was claiming the deduction under section 80P(2)(a)(vi) of the Act which was denied to the assessee and the same has been accepted by assessee. The Assessing Officer also rejected the books of account as they were not properly maintained and estimated the income in the hands of the assessee by applying net profit @ 15% on the contract receipt resulting in addition of Rs. 32,53,148/-. 8. The Ld. Authorized Representative for the assessee has not pressed the issue of rejection of books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) while adjudicating the case of road contractors had laid down the proposition that the net profit rate of 5% as estimated by the ITAT should be applied. Admittedly, when an estimation has to be made in the hands of any of the assessee, fair estimate should be made keeping in mind the nature of activity carried on by the said person and also taking into consideration the past or the future results shown by the assessee in this regard. There is no merit in estimating the net profit in the case of the assessee @ 15% especially in view of the past and future results shown by the assessee from year to year where the assessee is an association of labourers who, in turn, were taking up the Government contract for the repair of roads/buildings. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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