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TMI Blog2015 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... y payment to partners. The A.O. is directed to allow the same and then estimate the net profit/income of the assessee after deducting the separate depreciation, partners' salary and interest as shown by the assessee. - Decided in favour of assessee. - IT (SS) Nos. 01 to 03/Jab/2013 - - - Dated:- 29-5-2015 - D T Garasia, JM And B. C. Meena, AM,JJ. For the Appellant : Shri Anil Gupta, ld.AR For the Respondent : Shri V B Sargar, ld.DR ORDER Per Shri D T Garasia, JM. These appeals have been filed by the assessee against the common order of the ld. CIT(A), Jabalpur dated 25-06-2012 for the assessment years 2007-08, '08-09 and '09-10 respectively. Since the issues involved in all these three appeals are common, therefore, they are disposed of by this common order for the sake of convenience. 2. The assessee has raised the following common grounds of appeal in IT(SS) Nos.01,02 03/Jab/2013 for the A.Ys 2007-08,'08-09 and '09-10 respectively:- 1. That the ld.CIT(Appeals) is not justified in sustaining the assessed income estimated at 5% of gross contractual receipts without giving separate further deduction of depreciation claimed vide circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bour payment, royalty to PWD and labour welfare expenses. There was some defects. Therefore, the A.O. has rejected the book result and applied the N.P @5% after depreciation on the gross contractual receipts for each assessment year under consideration to arrive at the net income of the business of the assessee. Therefore, the A.O. made the additions of ₹ 1,46,00,262 for the a.y 07-08, ₹ 1,14,50,883/- for the a.y '08-09 and ₹ 52,33,578/- for the a.y '09-10 respectively. The A.O. further held that income of the assessee should be determined at 5% of the gross contractual receipts without giving further deduction of depreciation, interest and remuneration paid to the partners as shown in the P L account. 4. Matter carried to ld. CIT(A). The ld. CIT(A) after considering the submissions of the assessee has dismissed the appeals of the assessee on this issue. 5. Against the order of the ld.CIT(A), now the assssee is in appeal before us. 6. During the course of hearing the ld.AR for the assessee has submitted that the assessee is a civil contractor. There was a search seizure operation in the premise of Sh.Ashiwini Kumar Shrivastava, one of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the APB[assessee's paper book]. In all these assessment years the A.O. has applied and estimated the N.P at 5% of the gross contractual receipts by rejecting the books result. The only dispute before us that in A.Ys. '07-08, '08-09 and '09-10 that the A.O. estimated the N.P at 5% by rejecting the book result without allowing depreciation, interest and salary paid to partners. We further find that the similar issue has come up before the Hon'ble Rajasthan H.C has held in the case of M/s. Jain Construction Co. reported in 245 ITR 0527(Raj) , wherein it has been held as under:- In case of working partners, payments of salary, bonus, commission or remuneration by whatever name it called in terms of the partnership deed is allowable as deduction to the extent of limit provided under s.40(b). In this group of cases, the Tribunal after examining the partnership deed in all individual cases found that the claim of assessee for interest on capital contribution by partners and salary to working partners was allowable deductions to the extent of limit provided under s.40(b). The Tribunal was justified in doing so.The finding of fact does not give rise to question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, etc. Now in case of assessee engaged in business of civil construction or supply of labour for civil construction fixed rat of net profit of 8 per cent has been provided. Proviso to sub-s (2) permits salary and interest paid to the partners deducted from the fixed net profit of 8 per cent subject to the conditions and limits specified in cl(b) of s.40. Thus, there is further simplication and certainly in computation of income. Instructions contained in para 2 of the circular of the year 1965 have been brought in the statute, thereby the doubts, if any, with respect to subject circular have been settled. The Tribunal while allowing the appeal has directed the assessing authority to recomputed the total income as estimated by him and allow relief on account of payment of interest and claim of depreciation. The finding recorded by the Tribunal is purely a finding of fact, based on proper appreciation of material on record and the evidence produced by the assessee. As no question of law arises out of the order passed by the Tribunal, there is no fault with the order of the Tribunal declining to refer the question. 9. We further find CBDT Circular no.029D(XIX)-14) dated 31st Augu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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