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TMI Blog2012 (12) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... re indicated that the assessee had raised bills on the contractees when the material cost was still to be borne by the assessee. In this view of the matter, the estimation at 8% confirmed by the learned CIT(A) by deleting these additions and disallowances made u/ss.68 and 69 we hold 7% profit as reasonable to be taxable income on the gross receipts disclosed by the assessee in its financial statements. To conclude for the Assessment Year 2007-08 the AO is directed to tax 6% of the gross receipts as taxable income of the assessee and for the Assessment Year 2008-09 he is directed to tax 7% of the gross receipts as taxable income of the assessee. - Decided in favor of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... oss receipts. 5. We propose to take up appeal for the Assessment Year 2007-08 first when the assessee has raised the issue on the facts and circumstances case the learned CIT(A) could not have confirmed the Net Profit @8% of the gross receipts as computed by the Assessing Officer u/s.144. For this proposition the learned Counsel for the assessee submitted the financial statements duly audited which were part of the return scrutinized by the AO u/s.144. He submitted that the assessee is a Government Contractor for constructing roads for the Government and was able to receive Rs. 2.29 Crores from the Government for construction of roads when it paid Rs. 11,83,589 as royalty to the Government for making boulders chips. The assessee also incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be made in view of the clinching fact that 80% material cost cannot be part of the income contributing expenditure when the remaining civil work for 12% cannot be yield more income than as rendered by the assessee. 6. The learned DR supported the order of the learned CIT(A). She submitted that non-cooperation to appear as per the notice issued by the Assessing Officer rendered the assessment to be made to the best judgment of the AO which is confirmed by the learned CIT(A) by assigning reasons for such estimation. She fully supported the orders of the authorities below. 7. For the assessment year 2008-09, on the appeal of the Revenue, the learned DR contended that the learned CIT(A) is not justified in deleting the additions/disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubjected to invocation of the provisions of section 145(3). The learned CIT(A) therefore for both the AYs chose to apply the same rate when the technicalities considered by the Assessing Officer was different for the Assessment Year 2008-09. The learned Counsel for the assessee before us has submitted that rejection of books of account and computing correct under the provisions of Section 145(3) is a proposition different than passing of order u/s.144 to the best of the Assessing Officer's judgment insofar as the very figures as given in the books of account and disclosed in the financial statements are adopted by the authorities. We find force in the submission of the learned Counsel for the assessee that the learned CIT(A) for the Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not only fetch only 8% as per provisions of section 44AD when the assessee rendered civil contract work without material. It was not the case of the assessee to make profit of 8% on the material cost. In this view of the matter, we feel it reasonable to estimate the income on gross receipts @6% for the Assessment Year 2007-08. However, as per the financial result disclosed for the Assessment Year 2008-09 we do find that the Assessing Officer had made additions on account of disallowance of sundry creditors which had increased not in proportion to the increase in the material cost therefore indicated that the assessee had raised bills on the contractees when the material cost was still to be borne by the assessee. In this view of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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