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2018 (1) TMI 1049 - HC - VAT and Sales TaxRejection of gross profit claimed by the revision petitioner - Whether the adoption of 10% notional Gross Profit on the purchases effected, while arriving deemed sale turnover by the Assessing Officer is correct or not? Held that: - It is the duty of the respondent dealer to furnish the value of materials used in the execution works contract with appropriate inclusion of gross profit relatable to those materials. In practice it is not humanly possible to cull out each and every item transferred along with related Gross Profit. Thus the liability on the part of the dealer have to be arrived notionally be calculating deemed sales taxable turnover. Hence, it has been a practice of the dealers to adopt 10% Gross Profit on the purchase value of the items used in the purchase value of the items used in the works contract and thereby arrived a deemed sales turnover for which tax at the respective rate is being paid to the Department. This conventional method of adopting 10% Gross Profit and working out the liability in respect of works contractors have also been accepted by the Department. This has been in in vogue ever since the introduction of Section 3B of the TNGST Act 1959 and continued to be in course even for the liabilities pertaining to Section 5 of the TNVAT Act 2006 - it could be deduced that while doing so, the tribunal has also verified the audited Profit & Loss statement and Balance Sheet of the assessee / revision petitioner, for the relevant years. Was the Tribunal correct in giving a judgment entirely based on perverse assertions that had no relation to either the established facts or the accounts maintained by the petitioners in the normal course of their business, audited and certified by a Chartered Accountant? - Held that: - Though, learned counsel for the revision petitioner urged that the certificate issued by the Chartered Accountant, for the period between 01.01.2007 and 31.03.2007, 01.04.2007 and 31.03.2008, 01.04.2008 and 31.03.2009 & 01.04.2009 to 31.03.2010 of the Assessment years 2006-07, 2007-08, 2008-09 and 2009-10, respectively, corroborated the accounts and balance sheet and therefore, the certificates issued by the Auditor, ought to have been given weightage, for the calculation of gross profit, which according to him, was actually earned by the assessee, and further reiterated the grounds of challenge for reversal of the orders of the tribunal Section 142(2) of the Income Tax Act, 1961, states that for the purpose of obtaining full information in respect of the income or loss of any person, the Income Tax Officer, may make such enquiry, as he considers necessary, and as per Section 142(3) of Income Tax Act, 1961, the assessee, shall, except where the assessment is made under Section 144, be given an opportunity of being heard, in respect of any material gathered on the basis of any enquiry, under sub-section (2) and proposed to be utilised for the purpose of the assessment - the tribunal, has considered the submissions of the learned counsel, perused the relevant documents, stated supra, and passed a well considered orders in STA Nos.109 & 110 of 2015 and 200 & 201 of 2014 dated 25.06.2015, and that the same do not call for any interference. Tax revision dismissed.
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