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TMI Blog2012 (12) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... by this common order for the sake of convenience. ITA No.1650/Hyd/2010 : Assessment year 2006-07 2. First effective grievance of the assessee in this appeal relates to estimation of profit of manufacturing division. Assessee's grounds in this behalf read as follows- "1.1 The learned CIT(A) is not correct in estimating the profit of manufacturing division without any basis and erred in ignoring the division profitability statements relating to manufacturing and non-manufacturing divisions. 1.2 The learned CIT(A) erred in estimating the profitability of non-manufacturing division at 8% of gross contract receipts, unilaterally, without giving opportunity, which has no basis, this is especially so when the learned assessing officer e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d profit of Rs.90,75,670, assessing officer arrived at the balancing figure of Rs.8,05,117 which is taken as assessee's profit from manufacturing activity, eligible for relief under S.80IB of the Act. 4. On appeal before the CIT(A), assessee filed elaborate written submissions. The CIT(A) called for a remand report from the assessing officer. After considering the said remand report in the light of the contentions of the assessee thereon, the CIT(A) estimated the profit from non-manufacturing activity, viz. executing civil contract works at 8% as against 5% adopted by the assessing officer, and deducting the bank interest of Rs.10,76,660 and profit of civil contracts division of Rs.60,80,729 aggregating to Rs.71,57,389, from the combined p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) is against the provisions of law. 7. The Learned Departmental Representative on the other hand, strongly supported the impugned order of the CIT(A). 8. We heard both sides and perused the orders of the lower authorities and other material available on record. It is evident from the impugned order of the assessing officer that no defects in the books of account of the assessee have been noted, and the books have not been rejected, and it is without rejecting the book results of the assessee that the assessing officer resorted to estimation of profit at 5% of the assessee. We further find that the CIT(A) has also enhanced the rate of profit adopted by the assessing officer at 5% to 8%. While doing so, we find that the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Special Bench (Visakhapatnam) of the Tribunal dated 29th March, 2012 in the case of Merilyn Shipping & Transports Visakhapatnam V/s. ACIT Range-I, Hyderabad in ITA No.477/Viz./2008 for assessment year 2005-06. 11. The Learned Departmental Representative, on the other hand, strongly relied on the order of the assessing officer. 12. We heard the parties and perused the orders of the lower authorities and other material on record. We find that the Special Bench decision of the Tribunal in the case of Merilyn Shipping & Transports Visakhapatnam (supra) squarely covers the issue in dispute in favour of the assessee and against the Revenue. Relevant portion of the said decision is reproduced below- " .... I have gone through the detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave already restored the matter relating to that issue to the file of the CIT(A), and it would, therefore, be convenient besides being in consonance with the principle of consistency, if this issue is also restored to the file of the CIT(A). We do so accordingly, and direct the CIT(A) to re-examine this issue in accordance with law and after giving reasonable opportunity of hearing to the assessee as well as the assessing officer. 14. The next grievance of the assessee in this appeal, contained in ground No.1.4 of this appeal relates to disallowance of part of the assessee's claim for relief under S.80IB of the Act. At the time of hearing, learned counsel for the assessee, did not press for this ground. It is accordingly dismissed as not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." 18. We heard both the parties and perused the orders of the lower authorities and other material available on record. We have already considered the issue relating to disallowance of expenditure invoking the provisions of S.40(a)(ia) of the Act, while considering the appeal of the assessee for the assessment year 2006-07 vide paras-12 and 13 hereinabove. Facts and circumstances of the case for the years under appeal being identical, for the reasons discussed therein, we set aside the impugned order of the CIT(A), and restore this issue for the assessment years 2007-08 and 2008-09 to the file of the assessing officer, with a direction to redetermine the actual amount of expenditure disallowable under S.40(a)(ia) of the Act, ascertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X
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