9911796707
TMI Blog2016 (7) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-10 on 30.9.2009 declaring total income of Rs. 2,38,16,223/-. The return was processed u/s 143(1) of the Income-Tax Act, 1961 (hereinafter called as 'the Act') on 17.1.2011. Subsequently, the case has been selected for scrutiny and accordingly, notice u/s 143(2) of the Act dated 19.8.2010 was issued. In response to the notice, the authorized representative of the assessee appeared from time to time and furnished books of accounts, bills & vouchers and other information called for. During the course of assessment proceedings, the A.O. noticed that most of the expenditure debited to P&L account like material purchase and labour chargers are supported by self made vouchers. It was further observed that the vouchers did not contain the essenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny expenditure with proper bills & vouchers. All the expenditure claimed are supported by self made vouchers. With these observations rejected the books of accounts under the provisions of section 145 of the Act and estimated the net profit of 12.5% on main contract works and 8% on sub contract works with further deduction towards depreciation. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the A.O. The assessee further submitted that he had executed works contract on various places and procured the materials locally depending upon the circumstances and also business expediency. The assessee further submitted that most of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts and estimated net profit after considering the facts of the case of the assessee and also the expenditure incurred by the assessee. The D.R. further submitted that the assessee neither appeared before the A.O nor furnished any books of accounts and other details to substantiate the return of income filed by the assessee. The A.O. after considering the information available on record estimated the profit of 12.5% on gross contract receipts, therefore, the assessment order should be upheld. 5. On the other hand, the Ld. A.R. for the assessee strongly supported the order of the CIT(A). The A.R. further submitted that the CIT(A) has scaled down the estimation of net profit to 9% after considering explanation furnished by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in contract works. We find force in the arguments of the assessee for the reason that there is no hard and fast rule for estimation of net profit from civil contract business. It is an admitted fact that estimation of net profit from civil contract receipts is consistently followed by the department on various rates depending upon the facts and circumstances of the each case. The ITAT, also upheld the estimation of net profit ranging from 8 to 12.5% on main contracts. It is an admitted fact that the profit ratio cannot be a constant factor for each and every contractor in all cases. It varies from place to place depending upon the type and nature of works contract executed by the contractor. In the present case on hand, the assessee contend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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