TaxTMI 
TaxTMI 
2012 (2) TMI 562
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....fter applying net profit rate at 12% on gross receipts after rejecting the books of account U/s 145(3) of the IT Act. Whereas the books were accepted in the previous years and also in proceeding year. 2. That the Ld. CIT(A) has erred in initiation of penalty proceeding U/s 2711)(c) of the Income Tax Act, 1961 on accrued interest of refund of income tax Act, whereas the same is reflected on receipt basis." 3. The brief facts of the case are that the assessee is a civil contractor engaged with the University of Kurukshetra. The assessee during the year under consideration had declared NP rate of 4.5%. The case of the assessee is that the cement and steel is supplied by the University of Kurukshetra and only allied items like sand and bajri....
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....ity of Kurukshetra and only allied items like sand and bajri are purchased by the assessee through the agent. It is categorically submitted by the learned A.R. for the assessee that the total payment for the purchase of sand and bajri are through cheques though the bills in respect thereof are not properly maintained. Admittedly, the assessee is not maintaining any stock register but is maintaining wages register on which the signature of the workers is taken. In view thereof, we uphold the rejection of books of account. However, in the entirety of the facts and circumstances of the case and the nature of the civil construction work carried out by the assessee, the adoption of net profit rate of 12% to determine the income of the assessee f....
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.... placed reliance to the ratio laid down by the Hon'ble Punjab & Haryana High Court in the case of another contractor in CIT Vs. Parbhat Kumar Contractor (Supra). The CIT (A) had applied net profit rate of 6.5% in view of the rate applied by the Hon'ble Punjab & Haryana High Court. In the facts of the case before the Hon'ble Punjab & Haryana High Court, the reasons for the application of the said rate was the un-verifiability of the wages claimed as expenditure. There is no merit in the stand of the CIT (A) that in case of contractors, higher rate to gross receipts is to be applied in all cases in view of ratio laid down in CIT Vs. Prabhat Kumar, Contractor (supra). We find that the Hon'ble Punjab & Haryana High Court in Raja....