9911796707
TMI Blog2012 (11) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case are that the assessee firm carrying on civil contract works of formation of new roads and black top there on besides repairs and maintenance of the roads to the State Government Departments such as Roads Buildings and Panchayat Raj etc. It filed the return of income for the year under consideration on 30/03/2009, admitting total income at ₹ 28,27,500/-. The AO noted that the vouchers for labour and labour expenses were self made vouchers to the tune of ₹ 6,53,57,997/- and there were several cash bills in metal suppliers accounts. On being asked by the AO to explain the said payments and depreciation statement, the assessee stated during the course of assessment proceedings that it had maintained the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 145 of the IT Act are applicable and further erred in rejecting the books of account and erred in estimating the income @ 12.5% on the own contracts and 8% on the sub-contracts without allowing any deductions. 4. Before the CIT(A) the assessee filed written submissions, the contents of which were extracted by the CIT(A) at pages 3 to 10 of his impugned order. He stated that the AO made additions because the assessee firm at the time of scrutiny assessment proceedings submitted to the AO the self made vouchers for labour payment and cash bills for material purchased without considering the factual position in this line of contracts and also without considering various judgments pronounced by the High Courts which includes ITAT, Hyderabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/- from gross contract works of ₹ 25,28,50,380/- the AO has wrongly arrived at ₹ 23,03,74,493/- instead of ₹ 22,95,90,554/-, which the AO has to keep in mind while recomputing the total income. Regarding any other disallowances, once 8.5% is applied on the total turnover of the appellant firm (on total turnover of contracts and subcontracts), now it is settled issue that when estimation in the case of a partnership is made then while determining the total income for the year under consideration, the AO is duty bound to allow remuneration of the working partners, interest paid on partners capital accounts and depreciation. Thus, having regard to the facts, circumstances and catena of decisions available on the subject, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epending upon the factual situation and 5% to 7% on the sub contract depending upon the factual situation. Therefore, in our opinion, estimation of profit at 8% by the CIT(A) on main contract and at 5% on sub contract is justified. We do not find any infirmity in the order of the lower authority. Accordingly the same is confirmed. 8. Respectfully following the decision of the coordinate bench, we uphold the order of the CIT(A) in directing the AO to estimate the profit from main contract at 8% and 6% on sub-contracts. 9. Regarding depreciation, it is allowable u/s 32 of the IT Act and it falls under the provisions of section 30 to 38 and be deemed to have been already given full effect while estimating the income of the assessee. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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