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TMI Blog2012 (11) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ing feature for the current year vis-à-vis a preceding year, at any stage, including before us, viz., the nature of the work done; the cost of materials; the price realized, etc., or even a non-consideration of any of the relevant materials by the tribunal while determining the facts for AY 2005-06 - no basis for adopting a different measure, both qua the net profit rate and the working capital component involved, i.e., other than the corresponding accepted rates for that year - In the result, the Revenue’s appeal is dismissed. - I.T.A. No.529/Lkw/2011 - - - Dated:- 25-7-2012 - SHRI S. K. YADAV AND SHRI SANJAY ARORA, JJ. Appellant by : Shri Praveen Kumar, CIT-D.R. Respondent by : Shri Pradeep Kumar Kapoor, C.A. OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he book results being not verifiable, was adopted by the A.O., and the business income estimated accordingly at Rs.23.81 lakhs. Further, as regards the investment against the said suppressed receipt, the same was estimated at 93% thereof, i.e., by deducting estimated 7% profit included therein, and added as unexplained investment, assessing the total income at Rs.83.36 lakhs. 2.2 In appeal, the ld.CIT(A) found that under similar circumstances the tribunal in the assessee s own case for assessment year 2005-2006 (in I.T.A. No.172/Luc/2010 dated 27/04/2011) had scaled down the estimate regarding net profit rate from the applied 7% to 5% (of the gross receipt), so that he directed for following the same. The addition in respect of investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t were not produced before the assessing authority, so that the assessment had necessarily to be made by relying on other relevant materials, and which has been done by the Assessing Officer. In fact, the authenticity of those materials is not in question or dispute. The limited scope of the present appeal by the Revenue, thus, is the validity and reasonability of the estimate qua the profit earned by the assessee from his contractual operations, including undisclosed turnover, as well as qua the investment on working capital involved in the undisclosed contract business; the same having been disturbed by the first appellate authority in favour of the assesse. 4.2 The estimate aforesaid has without doubt to be bona fide, reasonable, and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of consistency, we may clarify, binds the assessing authority as much as the appellate authority. However, when the authorities below have brought on record material and grounds justifying a different view of the matter; the principle of res judicata being not applicable, the tribunal, as an appellate body, is bound to meet the finding/s recorded by them. Reference, in this context, to the decisions in the case of CIT v. Deepak M. Kothari, 331 ITR 301 (All.) and Rayala Corporation (P.) Ltd. (supra) is also apposite. The Revenue s position quathe law is well accepted. 4.3 Now, coming to the facts of the case, we find that both the Assessing Officer and the ld. CIT(A) have relied on the orders by the tribunal. Further, while the A.O. does o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed turnover for the year (excluding only the profit embedded therein), which is apparently extremely high the normative figure ranging from two to three months and, in any case, without stating any basis, i.e., in terms of time, and also without indicating or relying on any material. The balance-sheet for the current as well as for the earlier years were on record, and where-from a reasonable estimate of the working capital cycle, and thus, the working capital involved, could have been easily made. The position, though, wouldbe different if he has no access to any such facts or material, so that the estimate of income would have to be made by him necessarily with regard that available, i.e., with reference to the accepted results for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of 1.39%, found reasonable by the tribunal in the assessee s own case for the A.Y. 2005-2006, where, again, the rate originally applied by the Assessing Officer was 7%, cannot be considered as not reasonable. The reasons informing the tribunal s decision in restricting the ratewould apply for the current year.Likewise, as regards the addition qua investment (on working capital) in the undisclosed business. The action of the ld. CIT(A) is accordingly upheld. The assessee shall be also allowed credit for tax deducted at source on the undisclosed turnover, of course, on the satisfaction of the corresponding formalities, for and only for the current year (refer sections 198, 199 of the Act). We decide accordingly. 4.5 The learned D.R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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