TMI Blog2013 (7) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. 2006-2007 : 2. The brief facts of the case are that the assessee is a sub-contractor of M/s. Madhucon Projects Limited, Hyderabad and during the year, the assessee-firm had carried out sub-contract work relating to formation of B.T.Road and tunnel work in Madhya Pradesh. The assessee also took subcontract work of canal formation and construction of culverts in Madhya Pradesh. The return for the assessment year 2006-2007 was filed on 31.10.2006 admitting total income at ₹ 78,85,340/-. The Assessing Officer estimated the net profit at 12.5% of the gross contract receipts. In this case, the books of accounts of the assessee were rejected. Aggrieved, assessee went in appeal before the CIT(A) and the learned CIT(A) at para 3.3 held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. 4. Since, the issue is similar for both the assessment years, the learned Counsel for the assessee Shri P.Murali Mohan Rao took us through page 18 of the Order of the Tribunal in ITA.No.666/Hyd/2010 etc., batch dated 28th December, 2012 in the case of M/s. Madhucon Granites Limited ( Main Contractor ) wherein it has been held as follows : In our opinion, when assessment made by lower authorities, it should depend upon various factors and it should be unbiased. To some extent it is a guess work also based on the above particulars. Nobody can make 100% foolproof estimation. However, it shall be reasonable. 24. Now coming to the issue of allowability of depreciation, we have carefully gone through the judgement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishna Mohan Constructions in ITA Nos. 116 117jHydj2007 for the A.Ys. 1993-94 and 1994-95 wherein the Tribunal estimated the income of the assessee at 12.5% and thereafter given deduction towards depreciation. 5. Respectfully following the decision in the case of M/s. Madhucon Granites Limited (supra), we are of the opinion that the assessee being a sub-contractor, its income should have been estimated at 5% on the subcontract receipts and the assessee is not entitled for any deduction towards depreciation. 6. In the result, appeals of the assessee ITA.No.54 54/Hyd/2013 are allowed. 7. ITA.No. 747/Hyd/2009 ITA.No.761/Hyd/2010 A.Ys. 2006-07 2007-2008 (Revenue s Appeals) : These are Revenue s appeals against the Order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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