Civil contractor's books rejected, net profit estimated at 6.75% instead of 8% following precedent

ITAT Kolkata rejected books of accounts of a civil contractor who declared net profit at 5.79%. While CIT(A) estimated net profit at 8%, ITAT followed its own precedent in assessee's cases for AY 2011-12 and 2014-15, reducing the estimation to 6.75%. For AY 2013-14, assessee's appeal was partly allowed and revenue's appeal dismissed. For AY 2015-16, ITAT similarly estimated net profit at 6.75% instead of CIT(A)'s 8%, partly allowing assessee's appeal.

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Issues Involved:
The judgment involves cross-appeals for Assessment Year 2013-14 and an appeal for Assessment Year 2015-16. The primary issue revolves around the estimation of net profit by the authorities and the subsequent challenges by both the assessee and the revenue.

Assessment Year 2013-14:
The case pertains to a partnership firm engaged in civil contracts. The Assessing Officer made additions totaling to Rs. 7,34,12,430, assessing the total income at Rs. 9,32,97,520. The Assessing Officer rejected the books of accounts of the assessee and estimated profits at 8%. The Tribunal noted previous decisions where net profit was estimated at 6.75% in similar cases. Consequently, the Tribunal upheld the estimation of net profit at 6.75% for the year under appeal, partly allowing the assessee's appeal.

Assessment Year 2015-16:
In this year, the sole issue was the estimation of net profit at 8% by the CIT(A). Following the decision for Assessment Year 2013-14 and previous cases, the Tribunal estimated the net profit for this year at 6.75% and partly allowed the assessee's appeal.

Conclusion:
The Tribunal upheld the estimation of net profit at 6.75% for both Assessment Years 2013-14 and 2015-16, partly allowing the assessee's appeals and dismissing the cross-appeal filed by the revenue.

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