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TMI Blog2014 (2) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Construction Engineering, Srinagar and Sh. Mohan Singh, Contractor. 2. On the facts and circumstances whether the ld. CIT(A) was right in deleting the addition of Rs. 22,00,000/- on account of unsecured loans. 3. The appellant craves to amend or add any one or more grounds of appeal." 2. The brief facts of the case as arising from the order of the AO are being reproduced for the sake of convenience as under: "In this case, a peculiar situation has been created by the assessee due to his continuous non cooperation from the start of assessment proceedings. The chronology of various notices issued and its compliance status is being given as under: S.No. Notice u/s Remarks 1. U/s 143(2) issued on 29.08.2011 Assessee attended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the gross receipts of Rs. 5,14,44,100/- which gives an income of Rs. 51,44,410/- . The application of rate of 10% is being done by following the case of M/s. Pooja Construction Co. in ITA No.750(Asr)/1992 ( 69 ITD 147) delivered by the ITAT, Amritsar Bench, which has been upheld by the Hon'ble Punjab & Haryana High Court in their order in ITR No.166 of 1999 dated 10.09.2010. As stated above, the assessee has not availed the opportunities given to him for presenting his case and the unsecured loans of Rs. 22,00,000/- shown by him also remain unsubstantiated in the absence of any explanation from the assessee. These loans are being treated as cash credits u/s 68 of the I.T.Act, 1961 and added to the income of the assessee. With these rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rges are high. The receipts of the appellant also includes material supplies where the margins are low. Further, the plea of the appellant that he is a sub contractor and got the work further subject to another subcontractor has an effect on distribution of profit down the chain, appears genuine. It is observed that the jurisdictional ITAT Bench Amritsar in the case of Construction Engineering Sringar has held the net profit rate of 7% & 6.5% in two different assessment years and in another case of Mohan Singh Contractor held the net profit rate of 5% to be reasonable. Therefore, keeping in view the factual position of the appellant and the profit rates held reasonable by the jurisdictional Bench in different case, I am of the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) has simply agreed to the submission made by the ld. counsel for the assessee and allowed the relief without confronting the same to the AO or without calling for the remand report. There is no evidence brought on record that the assessee is a subcontractor and is operating in hilly border area and has also not submitted how the working conditions make the cost of expenses high to bring the margin at a lower rate. The Ld. CIT(A) has not brought on record how the decision of M/s. Pooja Construction relied upon by the AO and which case has been confirmed by the Hon'ble Punjab & Haryana High Court, is not applicable in the present facts and circumstances of the case and further has not brought on record how the cases relied upon by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is very old decision. Therefore, he submitted before the ld. CIT(A) to apply net profit rate of 5% following certain decisions of ITAT, Amritsar Bench, mentioned in his written submissions in the case of Mohan Singh Contractor, in ITA No.59/Asr/2012. He also submitted that he is a subcontractor and has further allotted sub contract for completion of work to sub-contractor. Accordingly, margin of profit is distributed among the three parties i.e. main contractor and the contractors of the assessee and relied upon the decision of ITAT, Amritsar Bench, in the case of Mohan Singh Contractor (supra) and prayed to apply a net profit rate of 5% before the ld. CIT(A) and even before us. 6.1. The Ld. CIT(A) without bringing on record any material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d simply by accepting the submission of the assessee that too without confronting to the AO and without asking the remand report of the AO and relying upon the decisions which are comparable or not comparable to the present facts and circumstances of the case, proceeded to apply net profit rate of 6% for the reasons best known to him. In the facts and circumstances, the order of the ld. CIT(A) cannot be accepted and is bad in law in the present facts and circumstances of the case, for the reasons mentioned hereinabove. Accordingly, the order of the ld. CIT(A) is directed to be reversed and that of the AO is restored , who has applied net profit rate of 10% on the gross receipts of Rs. 5,14,44,100/-. Accordingly, ground No.1 of the revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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