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2014 (1) TMI 1311 - AT - Income TaxRejection of books of accounts – Error in applying the Net Profit rate – Held that:- There were certain discrepancies in the receipts disclosed in the return of income and the TDS certificate - The assessee had submitted various vouchers - These vouchers are not numbered however, narration at the back of these cash vouchers show that the assessee was making the payment to the labourers on various dates after calculation of their work hours and converting them to the days by dividing the same with 8 hours. The CIT (A) has not distinguished the assessee's case with these comparable with cogent reasons - the comparables must have some bearing on the estimate of gross profit - The assessee is providing labour at mandies for marking, storaging, loading and unloading, cartage of agricultural produces which requires some skill to perform that work - assessee need not to employ regular employees as the season is only for 30 - 35 days - Making and storaging require little bit of specialization, therefore, the wage rates paid above the minimum wage or wages in MANREGA Scheme were justified - the loading and unloading in cartage work in agricultural produce in the mandis is also a tedious work – thus, any adverse inference cannot be drawn with regard to wage rate for 8 hours – thus, it will be appropriate to estimate the net profit at 2% of the gross receipts after allowing interest and remuneration to the partners – Decided partly in favour of Assessee.
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