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Issues involved: Assessment of income based on total contract receipts, disallowance of machinery hire charges, addition of additional income, delay in filing appeal.
Assessment of income based on total contract receipts: The assessee contested the estimation of income on the entire receipts without considering commission received from subcontracting. The CIT(A) directed income estimation at 8% instead of 12.5% determined by the assessing officer. The Tribunal held that profit should be estimated on the main contract amount excluding subcontract payments. Referring to a previous case, income from subcontract was to be considered at 5% instead of 8%, ensuring the total income does not fall below the returned income. Disallowance of machinery hire charges: As the assessee did not maintain separate accounts for expenses, the Tribunal estimated income from machinery hire charges at 50% of the charges received. Addition of additional income: The assessing officer added extra income despite the assessee offering additional income during a survey. The Tribunal held that sustaining the additional income offered was not proper when the returned income was not accepted. The final income determined could not be lower than the total returned income plus the additional income offered. Delay in filing appeal: The Tribunal condoned the delay in filing the appeal after considering the reasons provided by the assessee. Conclusion: The appeal of the assessee was allowed, and the Cross Objection filed by the Revenue was dismissed as infructuous.
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