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TMI Blog2015 (2) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... jected - A.O. estimated the profit @ 8% and made addition confirmed by Tribunal - Held that:- As the raw material belongs to the main contractor and not to the assessee. Thus, there is a contradiction about the facts and same was not discussed in the Tribunal's order. In the case of Chandra Agrawal Vs. CIT, [1984 (1) TMI 45 - ORISSA High Court] it was observed that material supplied by the contractee cannot be taken into account. The profit rate should be estimated with reference to the net payment only after excluding the cost of material supplied to assessee in terms of the contract. The Tribunal has ignored the abovementioned factual as well as legal position. Restore the matter back for reconsideration - Decided in favour of assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied by the main contractor and on which no liability to deduct tax could arise on the appellant? The brief facts of the case are that, the assessee is proprietor of the business of sub-contractor for road construction. For the assessment year under consideration, the assessee has filed the return by showing total income of ₹ 3,13,995/- stating that he is working as sub-contractor for M/s. Gammon India Ltd. But the A.O. passed the impugned order ex-parte and assessed the income of the assessee at ₹ 29,88,132/- by applying the profit @ 8%. Further the A.O. made the disallowance pertaining to the rent and labour, rent of machinery under Section-40(a)(ia) by observing that no TDS has been deducted. The first appellate authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng before the Tribunal. On the other hand, Sri Dhananjay Awasthi, learned counsel for the department has relied on the order of the Tribunal. He submits that the assessee had declared the net profit of ₹ 3,13,394/- on the total receipt of ₹ 98,63,056/- which comes out to approximately 3.18%, which is too low in the peculiar facts and circumstances of the case. The books of accounts were rejected as per the provision of Section- 145(3) of the Act. Pertaining to the disallowance under Section-40(a)(ia) of the Act, he relied on the ratio laid down in the case of CIT Vs. Pradeshiya Industrial Investment Corporation of U P Limited (2010) 325 ITR 583 Alld. This case has already been discussed by the lower authorities in their ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not discussed in the Tribunal's order. In the case of Chandra Agrawal Vs. CIT, 148 ITR 34 Orrisa, it was observed that material supplied by the contractee cannot be taken into account. Similar jurisdictional High Court in the case of CIT Vs. Hari Das Kapoor 180 ITR 329 Alld. observed that the profit rate should be estimated with reference to the net payment only after excluding the cost of material supplied to assessee in terms of the contract. The Tribunal has ignored the abovementioned factual as well as legal position. In other words, there is contradiction regarding the facts recorded by the lower authorities and the same were not adjudicated by the Tribunal properly. When it is so, then we set-aside the impugned order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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