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Commissioner of Income-tax II, Amritsar Versus Earth Tech Engineers

2014 (3) TMI 1068 - PUNJAB AND HARYANA HIGH COURT

NP determination - Held that:- ITAT was correct in law in confirming the order of the learned CIT(A) scaling down the net profit to 8% on the gross receipts as against 12% applied by the AO at the time of assessment. - IT Appeal No. 168 of 2013 - Dated:- 13-3-2014 - AJAY KUMAR MITTAL AND MS. ANITA CHAUDHRY, JJ. Denesh Goyal for the Appellant. Vikas Jain for the Respondent. ORDER Ajay Kumar Mittal, J. - This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 191 (i .....

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le ITAT was correct in law in confirming the order of the learned CIT(A) allowing the depreciation out of the net profit?" 2. A few facts relevant for the decision of the controversy involved, as narrated in the appeal may be noticed. The assessee is a contractor firm. It is engaged in the business of execution of government contracts. Return declaring income of ₹ 23,94,720/- was filed on 29.9.2009 and the same was processed under section 143(1) on 28.3.2011. The case of the assessee .....

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nt under section 143(3) of the Act was made and income was determined at ₹ 91,94,154 vide order dated 22.12.2011, Annexure A.1 by applying 12% rate on gross receipt after excluding cost of material supplied by the department. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [in short, CIT(A)]. Vide order dated 7.6.2012, Annexure A.2, the CIT(A) partly allowed the appeal and directed the Assessing Officer to apply net profit rate of 8% as aga .....

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ion bench while issuing notice of motion had recorded as under:- 'The revenue challenges order dated 21.2.2013 passed by the Income Tax Appellate Tribunal, Amritsar and order dated 7.6.2012, passed by the CIT(A) by raising the following substantial questions of law:- "1. Whether the Hon'ble ITAT was correct in law in confirming the order of the learned CIT(A) scaling down the net profit to 8% on the gross receipts as against 12% applied by the AO at the time of assessment? 2. Whethe .....

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s can have a similar rate of profit. The profit of a contractor would necessarily depend upon various factors like place of execution of the contract, the accessibility of labour, raw material etc. and would, therefore, vary from contractor to contractor. The assessee in the present case, was admittedly laying optical fiber cables etc. in a remote border area of Jammu and Kashmir. We therefore, find no reason to entertain the first question raised by the revenue and reject the same. Notice of mo .....

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