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2011 (8) TMI 1320

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..... ellant not defied none of the provisions of Section 144 of the I.T. Act, 1961. 3. That from the facts and circumstances of the case, the Ld. C.I.T. (Appeal) Jalpaiguri. has erred by not verifying the written submission for low profit from scrutiny case record that the appellant firm executing work at their native village where their own house so as houses of their kins were submerging by erosion of river ganga. The sub contract under taken by the firm contained much more emotional issue nothing to make profit. 4. That from the facts and circumstances of the case the Ld. C.I.T. (Appeal) Jalpaiguri, has erred by upholding the order of Addl. Commissioner of Income Tax, Jalpaiguri of the additions made on the interest on performance guarantee against the work as an income other than income from business. 2. Grounds No. 1 to 3 are against rejection of books of account by invoking provisions of sec. 145 of the Act and thereby estimating the net profit at ₹ 6,81,496/- by applying rate of 4% on the total turnover as against net profit declared by the assessee at ₹ 2,95,350/- @ 1.73%. The facts of the case, in brief, are that the assessee, a partnership firm, is carrying on a bu .....

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..... n this connection, the learned counsel referred to copies of work order procured by the assessee during the assessment year under consideration placed at pages 27 to 146 of the paper book. He has also filed details of purchases made during the year at page 154 of the paper book and related copies of ledger accounts of various suppliers of such materials used for its execution of contract works at different sites at pages 155 to 172 of the paper book. The learned counsel further submitted that the assessee had incurred considerable labour expenses in the execution of the contract work and month-wise details of such expenses are filed at page 173 of the paper book. In respect of wages/labour charges paid to labourers at different sites, copies of ledger account of such expenses have been filed at pages 174 to 193 of the paper book. In regard to the allegation of thumb impression of laborers made by the A.O., the ld. counsel submitted that about 22 or 23% of the labourers signed their names while others failed because of illiteracy. He further pointed out that the expenses incurred in this respect were in parity with earlier years. In regard to the A.O. s allegation that expenses on c .....

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..... such circumstances, the A.O. has rightly rejected the trading results shown by the assessee by invoking provisions of sec. 145 of the Act as the books of account were not properly maintained with supporting evidence and thereby estimating the fair and reasonable profit at 4% of the turnover declared by the assessee. He further submitted that the ld. C.I.T.(A) after considering all the details and evidences on record and taking into consideration the comparable cases has rightly upheld the estimate of net profit at 4%, which should be upheld. 5. We have heard the parties and perused the orders of the authorities below. We have also gone through the papers filed in the paper book of the assessee. The reasons/shortfalls as stated by the A.O. for rejecting the books of account of the assessee are summarized as under :- a) No stock register for material purchased and distributed is maintained. a) Although the assessee maintains labour register/muster roll, but this register only contains the names of the labourer, amount paid and their thumb impression. b) Expenses on carrying charges have been incurred by the assessee on self-made vouchers without any third party signature corroborati .....

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..... - form part of a major head in the trading/P & L Account considering the gross bill received to the tune of ₹ 1,70,37,407/-. The details produced by the assessee in support of payments to the labourers are only the names of such labourers and most of these are backed by thumb impressions. Further, number of labours deployed site-wise is not ascertained from such details of labour charges and the A.O. has thus doubted the correctness of such labour payments. Similarly in respect of carrying charges of ₹ 16,37,590/- for transporting materials, it is not disputed that most of the debit vouchers are self-made and signed by the employees of the assessee and there was no quantitative details of materials carried by different mode of transportation. In respect of other expenses, the same were documented by self-made vouchers prepared by the employees without any supporting bills. Therefore, in our considered opinion, the A.O. was having reasons for his dissatisfaction over the correctness of the accounts vis-à-vis trading results and income chargeable under the Act cannot be properly deduced from such books of account. In that view of the matter, we confirm the orde .....

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