TMI Blog2017 (12) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... answered in favour of the assessee. - D. B. Income Tax Appeal No. 43 / 2017 - - - Dated:- 22-11-2017 - K. S. Jhaveri And Deepak Maheshwari, JJ. For the Appellant : Mrs. Parinitoo Jain For the Respondent : Mr. Sanjay Jhanwar with Ms. Archana JUDGMENT 1. By way of this appeal, the appellant has assailed the judgment and order of the tribunal whereby tribunal has dismissed the appeal of the department and cross objection filed by the assessee was partly allowed. 2. This court while admitting the appeal on 30.5.2017 framed following substantial question of law:- (i) Whether the Tribunal was legally justified in restricting the addition of ₹ 96,27,290/- to ₹ 30,74,814/- made by Assessing Officer by invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 3,16,339/- and ₹ 7,03,275/- as income which was derived from other sources. 5. However, CIT(A) has observed as under:- 4.21. Thus, considering the past history of the appellant with regard to the percentage of net profit declared and assessed by the AO, the average net profit rate (AY 2005-06 3.75%, AY 2006-07 4.0%, AY 2007-08 4.57%, AY 2008-09 5.57%, AY 2009-10 3.86%- after adjusting addition of ₹ 3 lacs) would be 4.35%. Accordingly, considering all these factors and other deficiencies as noted above, it would be fair to apply the net profit rate of 5.00% to the turnover declared by the appellant at ₹ 16,10,42,167/-. This would result in estimated net profit of ₹ 80,52,108 as against the net profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the assessee has demonstrated that it is part of the contract business and therefore, once the net profit is applied for assessing the income, such receipts cannot be separately added to the income. While accepting the contention of the ld. Counsel, we direct the AO to delete the addition. This ground of the assessee is allowed. 7. Counsel for the respondent has contended that in the case of same assessee, average NP which has been applied is reproduced as under:- vi) The appellant earned NP of ₹ 49,77,294/- which is better than last year, the comparative GP rate and NP rate for the impugned year and preceding Four years are as under:- Rs. in Lac A.Y. Turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the income. 8. We have heard counsel for the parties. 9. Regarding first issue, in view of the decision of this court, NP rate is to be taken average of last five years which will come to 4.066, therefore, in our considered opinion 5% which is assessed by the tribunal is just and proper, therefore, first issue is answered in favour of the assessee. 10. Regarding second issue, it is true that the interest and income from other sources which is paid is given to earn income, therefore, in view of the observations made by the tribunal in para no.7.1 7.4, second issue is also answered in favour of the assessee. 11. In that view of the matter, both the issues are answered in favour of the assessee and against the department. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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