TMI Blog2005 (8) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation, interest and remuneration to partners. If the amount of depreciation of Rs. 49,234 is reduced, this net profit comes at Rs. 2,91,116. Its ratio of gross receipts comes at 6.88 per cent. It is the same manner in which the assessee had shown working of net profits in the earlier three years as well. It is no doubt true that the assessee had gross receipts of Rs. 42,27,946 in this year and the case did not strictly fall within the parameters laid down under s. 44AD. However, in order to determine the correct rate of profit, we are regularly. seeking guidance from this section and applying 8 per cent net profit rate. This net profit rate is further subject to interest and remuneration to partners as provided in proviso to s. 44AD(2). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of better administration of levy and collection of duty and for the purpose of Classification of goods the Board may issue direction allocating certain types of work to certain officers or classes of officers. Circulars issued by the Board dt. 27th Feb., 1997, and 13th Aug., 1997 are nothing more than administrative directions allocating various types of work to various classes of officers. These administrative directions cannot take away the jurisdiction vested in a Central Excise Officer under the Act. At the highest, all that can be said is Central Excise Officers, as a matter of propriety, must follow the directions and only deal with the work which has been allotted to them by virtue of the circulars. Even if an officer s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial used during the work done in the month of August, 1997 were made in the month of September, 1997 due to non-availability of funds. It was further noted that the assessee had claimed expenses on labour at Rs. 19,97,010, which was at 47.2 per cent of the gross receipts. He considered another case of Tolaram Phusha Ram wherein wages constituted 20 per cent of the gross receipts. In order to arrive at fair estimate of assessee's profit of this year, he held that the opening work-in-progress/stock of this year be taken at Rs. 6,65,034 (equal to 75 per cent of the payment of Rs. 8,86,712 received during this year for work done during the preceding year). By considering this amount as opening work-in-progress, he observed that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te stipulated in s. 44AD. In the opposition, the learned Departmental Representative strongly relied on the impugned order. It was submitted that the AO had done a good exercise to unearth the discrepancies and bring on record the clear picture of profit. 5. We have heard the rival submissions and perused the relevant material on record. It is obvious that the assessee had not maintained books of account in a manner which could assist the computation of correct income. It has also been conceded by the assessee before the AO with regard to non-maintenance/irregular maintenance of vouchers in support of expenses. In these circumstances, we are of the considered opinion that the application of provisions of s. 145(3) by the AO was justified. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . By translating it into the actual calculation, the amount of net profit after depreciation but before remuneration and interest to partners comes at Rs. 3,38,236. The amount of salary and interest to partners has been shown at Rs. 2,52,249. If this amount is deducted, the taxable income comes at Rs. 85,987. We hold this amount to be taxable income liable for taxation. 6. In the result, the appeal is partly allowed. Asst. yr. 1997-98 7. Pursuant to the order passed for asst. yr. 1998-99, the AO issued notice under s. 148 on the ground that the assessee had not shown any amount on account of work-in-progress for asst. yr. 1997-98 whereas there was work-in-progress which was estimated by the AO at 75 per cent of Rs. 8,86,112 that carne to Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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