TMI Blog2016 (7) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... ase on hand, the assessee contended that he had executed works contract in various places, wherein he has procured material locally depending upon the business expediency. The assessee contends that he had admitted a net profit of 7.5% which is reasonable when compared to the nature of works executed by him. The CIT(A) after considering the relevant details and also taken into account the ratio of the jurisdictional ITAT, in the case of M/s. Srinivasa Lakshmi Constructions (2011 (1) TMI 1437 - ITAT HYDERABAD) has scaled down the estimation of net profit to 9% on main contract works net of all deductions including deduction towards depreciation. We do not see any error or infirmity in the order of CIT(A). Hence, we inclined to upheld the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he payee, the quantum of work done or services rendered, the rate per unit of time/work, etc. to facilitate the cross verification of the genuineness of the expenditure or the reasonableness of the quantum of expenditure with reference to the extent of work done. In the light of the above deficiencies and also considering the low net profit admitted by the assessee, the A.O. issued a show cause notice and asked to explain why the books of accounts shall not be rejected under the provisions of section 145 of the Act and income from the business shall not be estimated. In response to show cause notice, the assessee submitted that he had carried out work at various places and material required for completing the work were obtained from various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills vouchers, however, in respect of labour and other like charges, the expenditure is supported by self made vouchers. Therefore, the A.O. was not correct in rejection of books of accounts and estimation of net profit of 12.5% on main contract works and 8% on sub contract works. The CIT(A) after considering the explanations furnished by the assessee held that the point to be noted here is that as to what is the appropriate yield depends on facts and circumstances of the each case and there are no hard and fast rules to be applied on universal basis for estimation of net profit. The CIT(A) further held that the A.O. relied upon the ITAT, decision in the case of M/s. K.N.R. Constructions, where the ITAT upheld the estimation of net profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be upheld. 6. We have heard both the parties and perused the materials available on record. The A.O. estimated net profit of 12.5% on main contracts. The A.O. was of the opinion that the books of accounts maintained by the assessee are not susceptible for verification. The A.O. further observed that most of the expenditure claimed by the assessee are supported by self made vouchers. Therefore, rejected the books of accounts under the provisions of section 145 of the Act and estimated the net profit by relied upon the decision of ITAT, Hyderabad bench in the case of M/s. KNR Constructions. It is the contention of the assessee that he had executed works contract in different places and procured the material locally depending upon the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract in various places, wherein he has procured material locally depending upon the business expediency. The assessee contends that he had admitted a net profit of 7.5% which is reasonable when compared to the nature of works executed by him. The CIT(A) after considering the relevant details and also taken into account the ratio of the jurisdictional ITAT, in the case of M/s. Srinivasa Lakshmi Constructions (supra) has scaled down the estimation of net profit to 9% on main contract works net of all deductions including deduction towards depreciation. We do not see any error or infirmity in the order of CIT(A). Hence, we inclined to upheld the order of the CIT(A) and dismiss the appeal filed by the revenue. 7. In the result, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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