TaxTMI 
TaxTMI 
2017 (6) TMI 1032
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....g the course of hearing, the ld. AR submitted that he did not wish to press this ground in respect of both the years under appeal. In the result, the ground No.1 in respect of both these years under appeal are dismissed as not pressed. 3. Similarly, in respect of ground No. 3 in both the appeals, the appellant has challenged the treatment of vehicle hiring income as an independent stream of revenue separate from the business stream of revenues. During the course of hearing, the ld. AR submitted that he did not wish to press this ground in respect of both the years under appeal. In the result, the ground No.3 in respect of both these years under appeal are dismissed as not pressed. 4. Now coming to the main ground of appeal in AY 2010-....
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....of 7% in respect of both the years under appeal, following the past history of the assessee in A.Y. 2008-09 and 2009-10. 4.3 In this regard, the ld. AR submitted that both the AO as well as ld. CIT(A) have ignored the fact that in preceding assessment years, assessee had job receipts only and no sales were made in those assessment years. However, in the assessment years under appeal, assessee has made sales in addition to the job work and the defects pointed out for invoking the provisions of section 145(3) are in respect to the job work only and no doubts were created in respect to sales made. The yearwise break-up of the total receipts for A.Y. 2008-09 to A.Y. 2011-12 is tabulated as under: Asst. Year Contract receipts (Rs) Jo....
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....d, the same deserves to be accepted more particularly when the sales and purchases are duly backed by the respective bills and vouchers for which no doubts were raised by the ld. AO. Regarding contract activity, it is submitted that assessee is electrical contractor and executed works of installation of electric wire/ cable for JVVNL at competitive rates/charges. The labour rates were increased due to shifting of major number of labourers to NREGA scheme of Central Government. Due to higher labour rates payable to labours in NREGA, the local wages of labourers were also increase or rather doubled than the rates estimated by assessee at the time of applying for contract. Thus the profit in the contract activity had reduced. Thus in the circu....
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....be bifurcated. The expenses relating to job work expenses and labour charges would pertain to both the revenue streams. (3.4) The AO has based the estimate of net profit @11.5% before depreciation and interest, on the basis of the order of ITAT, Jaipur in the case of Choudhury & Brothers and the decision o f the Rajasthan High Court in the case of M/s Jain Construction Company. It has been stated by the appellant that both these cases are of civil contractors engaged in civil construction whereas the appellant is engaged in the business of electrification viz. Erection, testing and commission of material/works for electrification of rural households. Therefore the two cases, cited by the AO are not comparable. In such a situation, ....
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....es pointed in the show cause notice. The explanation of the assessee was not accepted and the books of accounts were held not reliable as they do not present the real picture of the business of the assessee and the provisions of section 145(3) were invoked and the books of accounts were finally rejected. It is therefore, seen that the basis of rejection of books of accounts relates to the job work expenses and the labour charges claimed by the assessee in relation to the contract business carried out by the assessee. Therefore, any estimation of profit should have a reasonable and rationale nexus with the defects noticed by the AO while rejecting the books of accounts. In the instant case, the basis of rejection relates to the contract acti....