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TMI Blog2016 (5) TMI 1365X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Revenue raised the following effective grounds which reproduced below:- "1. Whether on the facts and circumstances of the case, Ld. CIT(A) erred in directing that profit be estimated @ 8% (eight percent) of Gross Receipts particularly in view of the facts that: i) The books of A/c were not rejected by the AO. ii) That external verification proves that purchase were inflated & hence there is no scope of estimation. iii) The turnover of the assessee is much more than 40 lakhs as mandated in 44AD." Shri Pramod Kumar Himmat Singhka, Ld. Authorized Representative appearing on behalf of assessee and Shri Rajat Subhra Biswas, Ld. Department Representative appearing on behalf of Revenue. 2. Common issue raised by assessee is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Small Enterprise 16 Tirupati Sales Corporation 32 Vivekananda Trade Centre During the assessment proceedings, Assessing Officer issued notices u/s. 133(6) of the Act to all the aforesaid parties for verifying the transactions with assessee. The AO found that there was lot of mismatched in the figure of purchase shown by assessee and the reply receipt from the parties in response to u/s 133(6) of the Act. The difference between claim of assessee and reply receipt from the concern party can be summarized as under:- (i) Purchase claimed by assessee and sale declared by party in its books of account; (ii) Reply receipt from the party in response to notices issued u/s 133(6) of the Act were not genuine so the purchase claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimating the profit from the Civil Contract Business of the appellant @ 8% of the gross contract receipts would be fair and reasonable and the appellant has also accepted the same to be fair, reasonable and appropriate. In these facts and circumstances after rejecting the books of account due to defects the income of the appellant is assessed taking net profit @ 8% on contract receipts of Rs. 22,49,83,589/- amounting to Rs. 1,79,98,687/- subject to no depreciation allowance. The Assessing Officer will take that all the allowance, deductions, exemption, if any ha been availed by the appellant during the year and then the net profit chargeable to tax is Rs. 1,79,98,687/-. The net profit is to be assessed as income at Rs. 1,79,98,687/-. Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax in the case of civil contracts. The assessee agreed for the addition of income @ 8 % of the gross turnover to buy the peace of mind. The ld. AR also drew our attention on page 1 of the paper book where the details of the profit declared by the assessee in the earlier years and subsequent years were furnished in terms of percentage which is ranging from 0.45% to 3.84% involving 7 financial years. From the aforesaid discussion we find the the AO has disallowed the various expenses as these were not verified in response to the notice issue under section 133(6) of the Act. But the ld. CIT(A) has treated the income of the assessee @ 8% of the gross receipt. So the Revenue is in appeal before us. Now the question before us arises for adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipts. Tribunal confirmed the order of the CIT(A) on the issue with conclusion that the rate applied has been rightly based on the net profit rate on different years. 3. In the case of Metropolitan Engg. Co. Opt. Society Ltd. vs. ACIT ITA No.s 2172 & 2172/Kol/2010 it has been held that in the AY 2001-02, the assessee is engaged in civil contract business with others business segments. AO estimated net income from the work contract @ 10% on the gross contract receipts. Assessee failed to furnish necessary evidence for purchase and other expenses. Purchase & expenses not confirmed on an enquiry conducted by the AO u/s. 133(6). Ld. CIT(A) confirmed the order of the Assessing Officer. Tribunal relied on the decision of Hon'ble Orissa High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that in the AY 2005-06, the assessee was engaged in the business of civil construction. Assessee fails to provide proper evidence in the shape of bills, vouchers, unable to verify purchases before the AO and AO made addition for unexplained purchase, sub-contract expenses and under valuation of work-in-progress. The Ld. CIT(A) estimated the total income by applying net profit rate of 4%. Both the assessee and revenue has challenged to the extent of order against them. The Tribunal inclined upon the order of the Ld. CIT(A) and accordingly confirmed." In addition to the above we also find that the assessee has declared the profit in its own case for the earlier years and subsequent years, showing very less amount of profit in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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