2017 (8) TMI 326

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....eipts excluding service tax. 3. Facts of the case, in brief, are that the assessee is an individual and engaged in the business of supply of labour. He filed his return of income on 29.09.2009 declaring total income of Rs. 2,91,620/-. During the course of assessment proceedings, the A.O observed that the assessee, on a gross receipts of Rs. 1,79,18,998/- has shown net profit of Rs. 3,13,042/-. Since despite repeated opportunities given by him, the assessee did not produce the books of accounts and supporting documentary evidence, the A.O rejected the book results shown by the assessee u/s 145(3) of the Income-tax Act, 1961. From the balance sheet, the A.O noted that no documentary evidence in respect of liabilities under various heads in....

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....rejected the results shown in the IT return u/s 145 (3) of the Act in the absence of books of accounts. Section 145 (3) only talks about rejection of books of accounts and not rejection of results shown in the IT return in the absence of books of accounts. If the books of accounts were indeed not produced before him, the AO can resort to best judgment u/s 144 of the Act. It is seen from the evidence, in the form of certified copies of letters written to the AO by the assessee during assessment proceedings, that the books of accounts have been produced before the AO. Be that as it may, the fact remains that most of the payments made by the assessee viz wages etc. are not capable of verification in the absence of addresses as they are mostly ....

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....e dismissed. 8. We have considered the rival arguments made by both the sides, perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. We find the assessee is engaged in the business of supply of labour and has declared net profit of Rs. 3,13,042/- on gross receipts of Rs. 1,79,18,998/-. Since the assessee did not produce the books of accounts, the A.O considered the receipts declared in the service tax return at Rs. 2,30,59,414/- as gross receipts and adopted 8% profit on such receipts as income of the assessee. We find in appeal, the ld. CIT(A) directed the A.O to adopt 5% on the gross receipts excluding service tax. It is the submission of the ld. Counsel for the assessee that in the two su....