1978 (7) TMI 128

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....against estimate of profit. The assessee was a contractor. He had not maintained any books of account and filed return showing total income of Rs. 18,740 on a gross receipt of Rs. 1,57,382. In the absence of books of account, the ITO did not accept the income returned by the assessee. He estimated the same by application of net profit rate of 12 1/2 per cent on the gross payments received by the a....

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....sideration of the nature of the work done by the assessee. Hence we do not find any reason to interfere with the order of the AAC on this point. 5. The next grievance is against addition of Rs. 5,000 as unexplained income of the assessee. The assessee started contract work for the first time during the previous year relevant to the assessment year under appeal. According to the assessee, initia....

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.... was justified. He, therefore, confirmed the action of the ITO on this point. 7. The assessee has carried the matter in further appeal before us and the learned counsel for the assessee contended that the lower authorities simply rejecting the assessee's explanation held that the assessee might have invested Rs. 15,000 as initial capital in business of contract. He urged that for execution of e....

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....nt in the contract business was not less than Rs. 15,000. 8. We have heard the submission of both the parties and considered the facts of the case. The fact that the assessee executed only the job of earth work during the year under appeal was not in dispute. To carry on such type of business only payment of labour is necessary. It is not improbable to make part payment to the labourers before ....