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TMI Blog2012 (12) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... on the loan would not go to diminish his income from interest, on the fixed deposit, paid by the bank. In favour of revenue Addition on account of margin on sub-contract works – To the tune of 6% which was half of net profit - Assessee claimed that value of sub-let work be reduced from its gross receipts - AO was of the opinion that the assessee had not produced books of account and he would definitely retain some profit margin – Held that:- Following the decision in case of Pran Nath Gupta (2009 (11) TMI 53 - PUNJAB AND HARYANA HIGH COURT) that the payment made to subcontractors is to be deducted from Gross receipt. In favour of assessee - ITA No. 848/CHD/2011 - - - Dated:- 13-7-2012 - MS SUSHMA CHOWLA AND SHRI MEHAR SINGH, JJ. Department by: Smt. Jaishree Sharma Assessee by: Shri Atul Mandhar ORDER Per Mehar Singh, AM The present appeal filed by the Revenue is directed against the order dated 06.06.2011 passed by the ld. CIT(A) u/s 250(6) of the Income-tax Act,1961 (hereinafter referred to as the Act'). 2. In this appeal, the revenue has raised the following Grounds of Appeal: 1. On the facts and in the circumstances of the case and in law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f roads at various sites. The appellant has shown gross work done at Rs.12,08,18,617/- and declared net profit @ 4.02% of the total receipts. The AO found such disclosed net profit very low. The AO afforded various opportunities to produce the books of account and justify the disclosed net profit. The AO rejected the book result of the assessee, after mentioning about the survey proceedings u/s 133A of the Act, conducted at assessee's premises, on 12.03.2009. The AO applied net profit rate at 12%, by following the decision in the case of M/s Prabhat Kumar (ITA No. 293 of 2003), a Civil Contractor. Ld. CIT(A), following the findings of the Tribunal, in ITA 865/Chd/2009, in assessee's own case, for the assessment year 2006-07, directed the AO, to apply net profit at 8%, instead of 12% to the contract receipts less cost of bitumen purchased from Govt. Agencies. Findings of ld. CIT(A), as contained in para 3.3 to 3.3.1 of the appellate order are reproduced hereunder, for the purpose of proper appreciation of the same: 3.3 I have considered the submission of the Ld. Counsel for the appellant. I have also gone through para 11 of the order of the Hon'ble ITAT, Chandigarh in appellant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er net profit rate of 7% is to be applied or enhanced to the rate of 12%. The AO applied the net profit rate as 7% and the said order has been affirmed by the ld. Appellate Tribunal. The ld. Tribunal has recorded a finding that there is no evidence produced by the revenue to prove that the assessee has the higher profit than the net profit rate of 7%. A perusal of the order passed by the ld. Commissioner shows that for the earlier years such as 2001-2002, 2002-03, 2003-04 and 2004-05, net profit rate of 7% was applied. Since the net profit rate was being applied in the previous years as 7%, there is no valid ground to enhance the net profit rate to 12%. We do not find any illegality or irregularity in the impugned order warranting any interference by this Court. Accordingly, both the appeals are dismissed. 7. Respectfully following the findings of the Tribunal in assessee's own case, and the direct decision of the Hon'ble jurisdictional Punjab Haryana High Court, as reproduced above, the findings of the CIT(A) cannot be assai led, with similar fact-situation of the present case, and hence, the same are upheld. Thus, this Ground of appeal of the revenue is dismissed. 8. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest income, which is assessable u/s 56 of the Act. The Hon'ble Supreme Court, in the case of CIT V Dr V.P. Gopinathan (2001) 248ITR 449 (S.C) held that where an assessee had invested money in a fixed deposit, in a bank, on interest and had taken loan, on the security of that deposit from the same bank, on interest, the interest paid by the assessee, on the loan would not go to diminish his income from interest, on the fixed deposit, paid by the bank. Such diminution is not covered under any provision of the Act. Respectfully, following decision of the Hon'ble Supreme Court, findings of the CIT(A), are reversed and this ground of appeal of the revenue is allowed. 11. In Ground No.4, the revenue contended that CIT(A) erred in deleting the addition made by the AO, amounting to Rs.2,12,762/-, on account of margin in such contract work, to the tune of 6% which was half of net profit. A reference was made, to para 5.3 of the CIT(A) order, by Ld. 'DR' . The ld. 'DR' placed reliance on the assessment order. The ld. 'AR' supported the findings of the CIT(A). 12. We have carefully perused the rival submissions, facts of the case and the relevant records. The facts of the case, br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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