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TMI Blog2011 (11) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... RIVASTAVA, ACCOUNTANT MEMBER AND Ms.SUSHMA CHOWLA, JUDICIAL MEMBER For the Appellant: Shri Sudhir Sehgal For the Respondent: Shri Ajay Sharma, DR O R D E R PER SUSHMA CHOWLA, J.M, : The appeal filed by the assessee is against the order of the Commissioner of Income-tax(Appeals), dated 29.10.2010 relating to assessment year 2006-07 against the order passed under section 143(3) of the I.T. Act, 1961. 2. The grounds of appeal raised by the assessee are as under : "1. That the Ld. CIT(A) has erred in confirming the flat rate of net profit i.e. 6.5% applied by the Assessing Officer. 2. That the Ld. CIT(A) has ignored the judgment of the Hon'ble ITAT, Chandigarh in the case of the appellant for the preceding year 2005-06 where the Tribunal allowed the appeal and applied net profit rate of 1.08%. 3. That the Ld. CIT(A) has also ignored that the assessment of the appellant for the assessment years 2003-04 & 2007-08 where the Assessing Officer completed the assessments at 3% and 2.38% respectively in the order passed u/s 143(3) of the Income tax Act, 1961. 4. That the Ld. CIT(A) has relied upon the judgment of Prabhat Kumar Contractor, Sirsa and which is not applicable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellate order. The CIT (A) noted that the assessee has not been able to establish the correctness and completeness of the books of account maintained and the profit declared and hence the rejection of books of account made by the Assessing Officer was confirmed. Further reliance was placed on the ratio laid down by the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. M/s Prabhat Kumar Contractor, Sirsa in ITA No. 293 of 2008 (Date of decision Nov.14, 2008). The addition made by the Assessing Officer was thus upheld by the CIT (A). The assessee is in appeal against the same. 5. The assessee has raised the issue against the rejection of books of account u/s 145 (3) Income Tax Act vide ground No.5 and has also objected to the application of flat rate of net profit at 6.5%, after ignoring the order of the Tribunal under which net profit rate of 1.08% was applied in assessment year 2005-06. The learned A.R. for the assessee pointed out that the assessee had furnished the explanation before the Assessing Officer in respect of the various defects pointed out by the Assessing Officer. It was further stated by the learned A.R. for the assessee that the issue in appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GP rate declared by the assessee was accepted by the Tribunal in assessment year 2005-06. 8. Now coming to the facts of the present case before us the assessee claims to have maintained the books of account in the regular course of carrying on its business which were audited and the audit report was submitted alongwith the return of income. Admittedly, the assessee is not maintaining any stock register, which was the case in the earlier years also. The said books of account alongwith the supporting vouchers were produced before the Assessing Officer. The assessee during the year under consideration had maintained purchase bills of the items purchased and some of the purchases were on self made vouchers, which was the practice in the earlier years too. The nature of said purchases were on account of sand, boulder, bajri and earth-filling material. The assessee claims to have maintained the vouchers in respect of labour payment of ₹ 3,55,062/- on which the labourers had affixed thumb impression on the payment received. The photocopies of which were claimed to be produced before the authorities below and the reply of the assessee in this regard is incorporated under para 2.02 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in assessment year 2005-06 and following the order of the Tribunal (supra), we find no justification in invoking the provisions of section 145(3) of the Act. 10. The second issue to be addressed in the case is the application of NP ratio. The Tribunal (supra) in assessee's own case relating to assessment year 2005-06 had directed the application of net profit rate of 1.08% to the gross receipts of ₹ 3.22 crores in comparison to net profit rate of 6.5% to the total receipts applied by the Assessing Officer. The CIT (A) during the year under consideration had rejected the claim of the assessee in view of the ratio laid down by the Hon'ble Punjab & Haryana High Court in CIT Vs. M/s Prabhat Kumar Contractor (supra) wherein the rate of profit @ 12% was applied by the Hon'ble Court. 11. The assessee is a road contractor and not civil contractor as in the case before the Hon'ble Punjab & Haryana High Court. The assessee had disclosed the income for the year under consideration at net profit rate of 1.20% and the Assessing Officer for computing the income of the year had applied net profit rate of 6.5%. The basis for the application of the said net profit rate by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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