Just a moment...

Report
FeedbackReport
Bars
×

By creating an account you can:

Logo TaxTMI
>
Feedback/Report an Error
Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
TMI Blog
Home / RSS

2016 (11) TMI 1641

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nd in the circumstances of the case, the the tribunal was justified in sustaining additions made by the assessing officer, on account of higher rate of profit, which is without any material?" "(ii) Whether on the facts and in the circumstances of the case, the net profit rate applied at the rate of 11.5% on contract receipts is based on any material and whether such addition is not liable to be deleted being based on surmises and conjectures and being arbitrary?" "(iii) Whether on the facts and in the circumstances of the case, the tribunal was justified in holding that while arriving at net profit rate, salary paid to Managing Director would not be allowed as a deduction to the appellant?" 3. Counsel for the appellant Mr. Prakul Kh....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....plicability that the asset was available with the assessee during the year." 4. Counsel for the appellant has also taken us to the observations made by the Tribunal in para 16 of the order, which reads as under: "16 After hearing rival submissions and considering the material on record, we find there is weight in the contention of the ld. D/R that during the year the expenses claimed were of excessive and assessee was not able to prove them. Of course, there was an increase to turnover. The turnover is increased from Rs. 74 lacs to Rs. 95.61 lacs as compared to A.Y. 93-94. We are also of the view that each case has its own fact and it is not always necessary that if turnover is then in that case the expenses are also increased on the sa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....are also not properly verifiable. Therefore, looking to the facts of the present case, we are of the view that if a n.p. Rate of 11.5% is applied then it will meet the ends of justice to both the sides. Accordingly, we hold that 11.5% net. Profit rate be applied. The AO is further directed to allow the deduction on account of depreciation and interest paid to third parties. However, we do not find any weight in the contention of the ld. A/R that salary paid to managing Director should also be allowed. We have already taken a decision while deciding the appeal for A.Y. 1990-91 wherein we have held that salary paid to Managing Director is not allowable while applying the n.p. Rate in the case of company. Therefore, this contention of ld. A/R ....