9911796707
TMI Blog2013 (10) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 3. The brief facts relating to this issue are that that the assessee is engaged in the business of contractorship and taking up the projects of road construction. During the year under consideration total receipts of the contract business were Rs. 27,81,95,367/- and a net profit of Rs. 85,32,242/- has been declared. This gives a net profit rate of 3.06% as against the net profit rate of 2.90% as per books of the assessee for the preceding assessment year 2008-09. In the assessment proceedings for assessment year 2008-09, the assessee agreed for application of Net Profit rate of 4.00% to buy peace of mind. The said order was also subjected to revision u/s 263 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act', for short]. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and genuineness of the claim made in the return filed by the assessee. He, however, estimated the net profit by increasing the net profit rate by 1% only i.e. to 4.06% as compared to 3.06% declared by the assessee. 5. Before us, the ld. DR submitted that application of net profit rate of 4.06% by the CIT(A) is without any basis and also without considering the fact that the assessment order for the AY 2008-09 was set aside u/s 263 of the Act and further net profit rate of 9% has been applied in AY 2008-09 vide order u/s 143(3)/263 of the Act. He also submitted that the ld. CIT(A) has also not considered the fact that assessee himself has declared a net profit rate of 5.81% in the AY 2007-08. He therefore submitted that the relief has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his profit/loss for the year. According to him, the AO has not pointed out any reason as to why the profit cannot be determined from the manner of maintaining books of accounts by the assessee. He mentioned that the payment of wages are through the wages sheet maintained on day- to-day basis in the regular course of business and no specific defect is found by the AO in the same. He stated that AO has not pointed out any instance of making payment of any amount as wages, which is not relating to assessee's business. He also submitted that no defect whatsoever has been found in any of the vouchers relating to any of the expenditures maintained by the assessee on day-to-day basis. He also submitted that that the assessee deals in number of sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the profits of the assessee for the year ended on 31.03.2008. The ld. AR has also submitted that the auditor is an expert in his field and examined all the related documents at the place of the auditee as against the summary examination by the A.O. of the information submitted during the course of assessment proceedings. Therefore, in view of the ld. AR the opinion given by the auditor should prevail in absence of any specific defect/discrepancy found in books of accounts/procedure adopted by the auditor for examining the books of accounts and documents and resultant profit/loss and also the affairs of the business. The Ld. AR also pointed out that the basis of application of gross profit rate of 5.85% does not find any color from the so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contracts are being continued from the last year. As regards the order u/s 263 for the assessment year 2008-09 the ld. AR submitted that the CIT(Udaipur) in that case has pointed out specific items like wages payable and repairs &maintenance for re-verification by the assessing officer as there was a substantial increase in those expenditures as compared to the preceding years. The ld. CIT did not give any direction as to rate of profit to be applied in that case. Earlier, the assessee has agreed for applicability of net profit rate of 4% as against 2.91% declared by him to buy peace of mind only. Now the AO in that case after the order u/s 263 has applied 9.00% which has been challenged by the assessee before CIT(A). Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how the non-maintenance of project wise accounts would result in disclosing lower profits than actually earned. He has also not pointed out that why the assessee needs to show closing stock or work in progress when the assessee consumes whatever material is purchased within a very short span of time and submits the bills on progressive basis on short intervals. He has not uttered any word as to how or how much such findings could affect the assessee's results. We further find that the AO has applied the net profit rate of 5.85% on the basis of A.Y. 2007-08 even when the same is without giving any reason to reject the assessee's view point of reduction in Net Profit because of increase in cost of bitumen. The rate has been applied devoid of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
