TMI Blog2020 (7) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is computed by applying the NP rate. CIT(A) is duty bound to grant personal hearing and opportunity to the assessee as well as Assessing Officer, from whom CIT(A) may also seek remand report from Assessing Officer, if required. The ld. CIT(A) shall also consider various decisions relied upon by the assessee including the decision of Tribunal in the assessee s case for earlier years. Computation of taxable income - HELD THAT:- We direct the Assessing Officer to compute the taxable income of the assessee after giving benefit of interest to partners ,remuneration to the partners and depreciation. The taxable income of the assessee would be subject to outcome on the issue of interest on FDRs. NP rate @ 8% - HELD THAT:- In the present case, the assessee relied upon his own cases for the subsequent years .Though found that the assessee has not challenged the NP rate of 8% applied for assessment year 2012-13 and 2013-14 in which the turnover of the assessee was 17.17 crores and 22 crore respectively, whereas the turnover in the present year was 19.27 crores. However considering the peculiar facts and circumstance of the case we restrict the net profit rate to 7.75 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on depreciation. 11. That the provisions o sec. 44AD d not apply in the fcts and circumstances of the case as the accounts were maintained and audited as per provisions of section 44AB of the Income-tax Act, 1961. 12. That the appeal is liable to be allowed. Assessment Year 2014-15: 1. That the appellant is a civil contractor and disclosed N.P. rate at 3.44% and the learned A.O. applied N.P. rate at 8% which is excessive. 2. That the application of 8% N.P. rate is applied by learned AO on the basis of written submissions of the appellant on 11/11/2016 the offer of net profit was conditional the offer was not accepted by learned AO in Toto. Hence the offer became redundant. 3. That in the case of the appellant in asst year 2011-12 6.5% N.P. rate was applied and in subsequent as year in 2015-16 7% N.P. rate was applied by the leaned A.O. 4. That the appellant vide written submissions dated 07/11/2016 explained before the learned AO that interest on FDRs amounting to ₹ 31,95,171/- was received by placing the FDRs as security amount for purposes of obtaining contracts tenders. This was examined by the learned AO and nothing adverse was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest income earned on the FDRs is intrinsically related to the business of the assessee and it was necessary for issuance of performance guarantees by the banks to the third parties. The purpose of Tax adjudication is to tax correct taxable income and is not adversial litigation. Moreover these documents were issued by the Nationalized Bank In the light of above, these documents are admitted. 6. Ground No. 1 to 5 of appeal No. 119/Agra/2016 and ground no 4 in appeal no 441 / 18 pertain to interest income. The assessee submitted that the Tribunal in the case of assessee itself in the previous year had allowed the interest income as business income and has not separately added the same to the total income of the assessee. The ld. DR had submitted that whether the income earned by assessee on FDRs was related to the business of the assessee or not and other facts are required to be examined by the authorities below or by the Tribunal. 7. We have heard the rival contentions of the assessee and perused the records. Undisputedly, the documents now admitted are required to be examined by the Tribunal or by the lower authorities. Since the documents are running into more than 64 pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er that the depreciation was subsumed in the estimated income at 8%. 10. On the other hand, ld. DR had submitted that the assessee had already been given benefit of depreciation and it was submitted that the amount of ₹ 65,28,670/- was already taken into account for depreciation. 11. We have heard the rival submissions and have gone through the record. Undisputedly, the issue has been settled by Hon ble Supreme Court in the case of assessee, as has been rightly recorded by the ld. CIT(A) in the order for assessment year 2014-15. In order to give clarity, we direct the Assessing Officer to compute the taxable income of the assessee after giving benefit of interest to partners ,remuneration to the partners and depreciation. The taxable income of the assessee would be subject to outcome on the issue of interest on FDRs. In the light of above grounds Nos. 6 to 11 of appeal for assessment year 2012-13 are allowed. 12. Ground No. 1 to 3 of appeal No. 441/Agr/2018 pertain to taking of net profit rate of 8% by the Assessing Officer and CIT(A) for A.Y. 2014-15. It was contended on behalf of the assessee that the net profit rate of 8% is too high considering the turn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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