TMI Blog2014 (8) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... er the AO can disallow the expenses which are directly related to gross receipt of the assessee on which the AO has estimated net profit by applying the rate of 8%. It is a fact that the assessee has not produced books of account, it means that the AO has not relied on books of account for estimation of profits. This fact is accepted by assessee as well as by revenue. We are of the view that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is estimated by applying net profit rate. Accordingly, we direct the AO to delete the other disallowances and restrict the addition by applying Net Profit rate @8% of gross receipts. We find valid reasons given by the Tribunal in support of this order - GA No. 2683 of 2014, ITAT No. 134 of 2014 - - - Dated:- 29-8-2014 - Soumitra Pal And Arindam Sinha, JJ. ORDER This appeal has been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case the Tribunal was justified in law in not appreciating the assessee had violated the provisions of the said Act as well as made out a case of itself of evading due procedure and the due taxes by resorting to the excuse of non maintenance of the books of accounts, and non attendance before the authorities concerned, thereby setting up a precedence whereby deliberately avoidi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking the provisions of section 40(a)(ia) of the Act. Further, disallowance of supervision charges, labour charges, site expenses, load testing expenses at 50%. Whether the AO can disallow the expenses which are directly related to gross receipt of the assessee on which the AO has estimated net profit by applying the rate of 8%. It is a fact that the assessee has not produced books of account, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 40(a)(ia) of the Act or section 37 of the Act. Accordingly, no disallowance could have been made in view of the above facts that once the profit is estimated by applying net profit rate. Accordingly, we direct the AO to delete the other disallowances and restrict the addition by applying Net Profit rate @8% of gross receipts. We find valid reasons given by the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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