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TMI Blog2023 (2) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciation. It was never a case wherein assessee accepted to adopt profit @6%. The case law was only quoted to the extent of claiming separate deduction of depreciation. As such, profit being estimated @6% is unjustified, illegal and fit to be deleted. 2. For that the appellant disclosed profit @0.25% in its audited books, results of which duly compared with past and subsequent years records. There was no basis on which profit was estimated at 6% by Ld. CIT(A) who should have considered the comparative chart and results of the past and subsequent years to arrive at reasonable estimate. It is accepted on records that in subsequent years thereafter 2015 onwards. the business of the assessee started resulting in loss. This is only stated to show the downfall graph in assessee business. As such, addition confirmed of Rs. 26,34,0601- (6% profit) is unjustified. illegal and fit to be deleted. 3. For that interest U/s 234A/B should be charged on the returned income and not on the assessed income following the decision of Hon'ble Jharkhand High Court. 4. For that other grounds in detail shall be argued at the time of hearing." 3. At the outset, ld. Counsel for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the tender goes lowest in spite of the best efforts the appellant could not get contract works from the government Department. In order to survive, the appellant any how got the sub contract work. 1. That the Assessing officer estimated the profit @ 8% on Gross Receipt of contract of Rs 6,90,52,851.00 and thereby worked out the net income of the net income of the appellant from contract work at RS. 1,75,850.00. Accordingly the Assessing officer made an addition of 55,24,230'00. 1. That the net profit shown at Rs. 1,75,850.00 on net contract receipt of Rs 6,90,52,851.00. which works out to 0.25% is quite reasonable, considering the nature and scope of the business. 1. That in the case of M/S Salauddin the Hon'ble ITAT, Patna Bench, patna has upheld the net profit rate of 6% in contract work and therefore this case is squarely covered in facts and law both. A copy of order of honorable ITAT Patna Bench Patna vide ITA No. 90/ pat / 2008 and ITA No.107/Pat /2008 is enclosed herewith and marked Annx-1 to this submission for your consideration. 1. That learned A.O has applied net profit @ 8% after taking into account all the expenses including depreciation which is dul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertakes civil contract works of various departments of the Government of Bihar. Accordingly during the year the appellant shown gross contract receipt of Rs.6,90,52,851/-. The AO further noted that the net profit shown by the appellant is a mere 0.25% of gross receipt of Rs. 6,90,52.851/-. Accordingly, the AO required the appellant to produce the copy of ledger account with all the supporting bills / vouchers. In compliance the appellant submitted ledger of expenses along with supporting. However, the AO on perusal of the bills''/ vouchers noted that same are incomplete and not fully verifiable. Accordingly, the AO relying on various decisions rejected the books of accounts u/s. 145(3) and estimated the profit at the 8% of gross receipts and made an addition of Rs.55,24,228/- as income from business. On the other hand the appellant submitted that the AO has not pointed a single defect in any of the bills / vouchers submitted and instead resorted to ad-hoc disallowance and estimated the profit arbitrarily @ 8% of the gross receipts. Accordingly, the appellant requested to adopt profit @ 6% of GP after deducting depreciation by relying on the following decision of Hon'ble ITAT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et profit rate of 6% placing reliance on various judgments including that of Hon'ble Patna High Court in the case of Shyam Bihari (supra), we fail to find any merit in the ground raised by the assessee for applying net profit rate @ 1%. Thus, no interference is called for in the finding of ld. CIT(A). We accordingly dismiss ground nos. 1 & 2 raised by the assessee. 8. As regards ground no. 3 raised regarding computation of interest u/s 234B of the Act contending that the same should be applied only on the returned income, we find that provision of Section 234B(1) of the Act and Explanation 1 has a direct bearing on this issue and the same are reproduced below: "234B. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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