TMI Blog2014 (3) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... re about the rate of profit to be adopted. We set aside the order of the CIT and restore that of the assessing officer. Estimation of profit at 12.5% of the gross contract receipts - Held that:- Estimation of net profit at 12.5% of the gross contract receipts is high and excessive. The ITAT Visakhapatnam bench as well as the ITAT Hyderabad benches have been consistently adopting the profit rate of 8 to 9% net of depreciation in case of assessees engaged in contract works and from profit so estimated further deduction towards remuneration and interest payment to the partners u/s 40(b) is allowed. Therefore, in tune with the consistent view of the Tribunal, we direct the assessing officer to estimate the profit at 9% on gross contract rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the assessee was completed u/s 143(3) of the Act vide order dated 10.11.2009 determining the total income at ₹ 1,44,00,538/- by estimating the income @ 9% on gross contract receipts of ₹ 19,59,06,133/-. The CIT while examining the assessment records pertaining to the assessment year under consideration in exercise of his powers u/s 263 of the Act was of the opinion that the assessment order passed is erroneous and prejudicial to the interest of revenue. Because of the fact that the assessing officer has estimated the net profit at 9% of the gross contract receipts without causing necessary enquiry with regard to the adopting low profit and without applying mind. He therefore issued a show cause notice to the assessee. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity of being heard. 3. We have heard the parties and perused the materials on record as well as the orders of the assessing officer and CIT. As could be seen, identical issue came up for consideration before the ITAT in assessee s own case for the assessment year 2006-07. The facts emanating in the assessment year 2006-07 as discussed in the order of the Tribunal and the finding of the Tribunal in that regard are extracted herein for convenience: 8. With regard to ground nos.6 to 8, which relate to an estimation of income, we find that CIT has set aside the assessment order on the ground that in similar line of business Tribunal has estimated the net profit at 12.5% and the A.O. has estimated it to be at 9% and directed the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross contractual receipts subject to deduction of interest and remuneration u/s 40(b) of the Act. Once the assessing officer has examined the issue and made estimation of an income, his estimation cannot be revised by the CIT only for the reason that he does not agree with the estimation made by the A.O. It is a settled position of law that CIT cannot thrust his opinion/view upon the assessing officer. We, therefore, of the considered opinion under the given facts and circumstances of the case that revision made by the CIT on this issue is not proper. We, accordingly, set aside the order of the CIT in this regard. 4. On going through the order of the Tribunal, we find that the facts are materially the same as in the assessment year unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying upon an order of the ITAT in case of M/s. KNR Constructions estimated the profit @ 12.5% on the main contract receipts. The CIT(A)also sustained such estimation. Being aggrieved of such order passed by the CIT(A) the assessee is before us. 6. We have heard the parties and perused the order of the revenue authorities as well as other materials on record. At the outset, the Ld. A.R. submitted that he does not want to press ground no.3 relating to rejection of books of accounts. In view of such submission the ground no.3 is dismissed. The Ld. A.R. confining argument to the estimation of profit at 12.5% submitted that the estimation of profit at 12.5% is high and excessive. It was contended by the Ld. A.R. that in case of estimation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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