2013 (12) TMI 416

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....grounds raised by the assessee in this behalf are as follows- "1. The learned Commissioner of Income-tax(Appeals) Guntur is not justified in confirming the rate of profit of 12.5% on the gross receipts determined by the Income-tax Officer, in rspect of the Appellant for the Assessment year 2008-09. 2) The Learned Commissioner of Income-tax(Appeals) ought to have seen that the rate of profit determined as per the guidelines of Central Board of Direct Taxes (New Delhi) is 5% only. Under such circumstances, the learned Commissioner of Income-tax(Appeals) ought to have taken into account the rate of profit of 5% fixed by the C.B.D.T., while estimating the rate of profit. 3) The learned Commissioner of Income-tax further erred in holdin....

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....imilar matters. In the case of Teja Constructions in ITA No.308/Hyd/2009 for assessment year 2005-06, this Tribunal vide order dated 23.10.2009, has held as follows- "The assessee had a higher rate of profit on the contracts executed by the assessee itself. In these contracts, the assessee agreed that his income is at 90% of the gross receipts. Thus, accordingly we direct the Assessing Officer to estimate the income on the contracts executed by the assessee's own at 9%. In case of contracts taken by assessee on sub contract, the income to be estimated at 8% of the gross receipts. Inc assessee of contracts given by the assessee to the 3rd party on sub contract, income to be estimated at 5%. This is, because, when the assessee given contra....

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....r expenditure and deductions such as remuneration to partners and depreciation is deemed to have be taken care of in view of the case law in the case of M/s Indwell Constructions 232 ITR 776 (AP) as decided by the jurisdictional AP High Court and also decision in the case of M/s Ayyappa Infra Projects P. Ltd in ITA No.608/H/2009. However the issue is covered by the order of the ITAT in the Assessee's own case for the earlier year. For that year the ITAT has estimated the profits of the Assessee @ 9% on own contract works, 8% on contracts taken by assessee on subcontracts and @ 5% on contracts given by the assessee to 3rd party on subcontracts. This estimate according to ITAT is before allowing remuneration, interest on capital and depreciat....