9911796707
TMI Blog2011 (11) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... firming the flat rate of net profit i.e. 6.5% applied by the Assessing Officer. 2. That the Ld. CIT(A) has ignored the judgment of the Hon'ble ITAT, Chandigarh in the case of the appellant for the preceding year 2005-06 where the Tribunal allowed the appeal and applied net profit rate of 1.08%. 3. That the Ld. CIT(A) has also ignored that the assessment of the appellant for the assessment years 2003-04 & 2007-08 where the Assessing Officer completed the assessments at 3% and 2.38% respectively in the order passed u/s 143(3) of the Income tax Act, 1961. 4. That the Ld. CIT(A) has relied upon the judgment of Prabhat Kumar Contractor, Sirsa and which is not applicable to the fact of the case. 5. That the Ld. CIT(A) has erred in confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee brought to the notice of Assessing Officer the escalation in price of different building materials particularly bitumen and diesel. The comparative details of rates for the year under appeal and the preceding year are tabulated at page 2 of the assessment order. The Assessing Officer in view of the defects in the books of account rejected the same by invoking the provisions of section 145(3) of the Act. The Assessing Officer thereafter applied net profit rate of 6.5% which was applied for the assessment years 2004-05 and 2005-06 and computed the income of the assessee. 4. Before the CIT (A) the assessee placed reliance on the ratio laid down by the Tribunal in assessee's own case relating to assessment year 2005-06. The extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficiencies pointed out by the Assessing Officer and in the absence of the same the result declared by the assessee could not be accepted. It was further pointed out by the learned D.R. that the books of account were found to be complete in assessment year 2005-06 whereas certain deficiencies have been pointed out in the year under appeal. 7. We have heard the rival contentions and perused the record. The assessee is a road contractor and is carrying out the contract work on behalf of the Government. During the year under consideration the assessee had declared NP ratio of 1.2% on the total receipts of Rs. 3.22 crores. The Assessing Officer had not accepted the said NP ratio because of certain discrepancies in the books of account and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2005-06. 8. Now coming to the facts of the present case before us the assessee claims to have maintained the books of account in the regular course of carrying on its business which were audited and the audit report was submitted alongwith the return of income. Admittedly, the assessee is not maintaining any stock register, which was the case in the earlier years also. The said books of account alongwith the supporting vouchers were produced before the Assessing Officer. The assessee during the year under consideration had maintained purchase bills of the items purchased and some of the purchases were on self made vouchers, which was the practice in the earlier years too. The nature of said purchases were on account of sand, boulder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d quantity was not maintained by the assessee. With regard to the payments made to trolley/tractor owners, as per the assessee, the details of payments were maintained by the said parties, though were not being maintained by the assessee. Once the details were being maintained by the payee which in turn would also reflect the amount due to the small transport operators, the observations of the Assessing Officer in this regard cannot be upheld. The next objection of the Assessing Officer was that there was no record of work in hand shown to which the assessee explained that the road construction work starts in summer season and in winter season the same virtually stops and hence no work remains in progress due to unfavourable season for this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration at net profit rate of 1.20% and the Assessing Officer for computing the income of the year had applied net profit rate of 6.5%. The basis for the application of the said net profit rate by the Assessing Officer was similar rate applied in assessment year 2005-06 and the CIT (A) had placed reliance to the ratio laid down by the Hon'ble Punjab & Haryana High Court in the case of another contractor in CIT Vs. Parbhat Kumar Contractor (Supra). The CIT (A) had applied net profit rate of 6.5% in view of the rate applied by the Hon'ble Punjab & Haryana High Court. In the facts of the case before the Hon'ble Punjab & Haryana High Court, the reasons for the application of the said rate was the un-verifiability of the wages cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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