TMI Blog2014 (1) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... imate 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 remunerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % of the gross receipts before allowing the interest and remuneration to the partners. 3. Now, the assessee is in appeal before us by taking the following grounds :- "1. On the facts and in the circumstances of the case, the Ld. CIT (Appeals) erred in confirming the rejection of books of accounts of the appellant. 2. On the facts and in the circumstances of the case, the Ld. CIT (Appeals) erred in applying the Net Profit rate of 4% as against the N.P. rate of 8% adopted by the A.O. and N.P. rate of 1.59% declared by the appellant." 4. While pleading on behalf of the assessee ld. AR submitted that the assessee has explained the discrepancy noticed by the Assessing Officer by stating that the assessee was following the cash system of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Coca Cola reported in 231 ITR 200 (SC). Ld. AR further submitted that books of account can be rejected only if the provisions of section 145(3) of the Act are satisfied. The Assessing Officer has power to reject the books if he is not satisfied with the completeness and correctness of the accounts of the assessee and where the assessee was not following any prescribed method of accounting. Ld. AR submitted that none of the conditions as referred to in section 145(3) are applicable in the case of the assessee. He further relied on the decision of Hon'ble Kerala High Court in the case of St. Teresa's Oil Mills vs. State of Kerala reported in 76 ITR 365 (Kerala) for the proposition that the accounts regularly maintained by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected the comparable produced by the assessee simply mentioning that the activities of comparables was different than the assessee. Finally, he pleaded to accept the book result of the assessee and set aside the orders of the authorities below. 5. On the other hand, ld. DR submitted that the assessee has violated the EPF Act provisions by not showing the persons from whom the work is getting done as its regular employees. He further submitted that the vouchers submitted by the assessee show that payment was made @ Rs.300 for 8 hours. Ld. DR further submitted that it was too excessive in view of the wages being paid in the MANREGA Scheme of Government of India. Even the minimum wages as per the Government Minimum Wages Act and MANREGA Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book. No contrary evidence brought on record by revenue. The assessee 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 reduced the estimated gross profit rate at 4% of gross receipts. The assessee has submitted two comparable cases. The gross profit rate in the case of M/s. Laxmi Co., Fatehbad was 2.36%. The turnover was also Rs.1.69 crores for the Assessment Year 2010-11. The other comparable was also from Fatehbad in the name of Dhangar Adarsh Co-op. L C Society where the tur ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
