Appellate Tribunal reduces assessment for constructor assessee, applying 12 1/2% net profit rate

The Appellate Tribunal partially allowed the appeal, reducing the assessment by Rs. 6,697 for the constructor assessee by applying a net profit rate of 12 1/2% instead of the 15% rate determined by the Income Tax Officer and confirmed by the AAC.

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The dispute in the appeal was about the estimate of net profits by the assessee, a constructor. The Income Tax Officer (ITO) applied a net profit rate of 15%, estimating income at Rs. 40,155, which was confirmed by the AAC. The Appellate Tribunal decided to apply a net profit rate of 12 1/2%, reducing the assessment by Rs. 6,697. The appeal was partly allowed.

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