TMI Blog2014 (2) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... is confirmed - Decided against Revenue. - ITA.No.1007/Hyd/2013 - - - Dated:- 5-2-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Petitioner : Ms. K. Harita For the Respondent : Mr. Mohd. Afzal ORDER Per B. Ramakotaiah, A.M. This appeal by the Revenue is against the Order of the CIT(A) dated 21.03.2013 wherein the learned CIT(A) reduced the estimation of income from 12% of gross receipts to 8% on gross receipts and directed the A.O. to allow interest and remuneration to the partners. The Revenue is aggrieved and has raised seven grounds out of which grounds No. I and VII are general in nature and therefore need not be adjudicated. 2. The main contention of the Revenue in Ground no II to VI is that the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation of income. The matter was remanded to the A.O. and his comments were obtained. The A.O. in his report dated 18.03.2013 reiterated the observations made in the assessment order and justified the estimation of profits at 12% on gross receipts. One of the contentions of the A.O. was that in the case of M/s. R-Nest Construction which is a group concern and in the same line of business, it accepted the profit percentage of 12% on the receipts of Rs.68,45,884/- and the deviation in assessee's case is not warranted. 5. On considering the assessee's submissions and report of the A.O. the learned CIT(A) went on to analyse the books of accounts maintained and vide paras 5.6, 5.7 and 5.8 came to the conclusion that explanation offered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate proceedings, as against the profits @ 3.70% admitted by the appellant in the return of income. Accordingly, the A.O. is directed to adopt the profit of the business @ 8% on the gross receipts of Rs.5,00,22,866/- and to re-compute the taxable income, after allowing the deductions for remuneration and interest to the partners as per the provisions of sec.40(b) of the IT Act. Accordingly, this ground of appeal is treated as partly allowed." 6. Learned D.R. relying on the order of the A.O. submitted that assessee has given a statement as it has not maintained proper books of accounts on the day of survey and then only statement was given under section 131(3). Therefore, CIT(A) erred in not considering the admission by the assessee. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and various projects were in different stages of completion. Even though assessee maintained books of accounts, receipts, part of sales/advances which were taken into consideration, assessee earned only profit of Rs.3.7% after claim of depreciation and interest and remuneration as per the provisions of the Act. Learned CIT(A), considering the facts of the case, determined the net profit at 8% of the gross receipts and directed the A.O. to allow only remuneration and interest. There is no fixed rational in arriving at the net profit from the business of construction as facts vary from case to case and year to year. Not only that market conditions and other aspects are also to be taken into account. Considering that assessee's profit was less ..... X X X X Extracts X X X X X X X X Extracts X X X X
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