2019 (9) TMI 260

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....(A) at 8% i.e Rs. 2,21,78,118/- of Gross Profit against 1.73% i.e., Rs. 48,05,287/- as per Audited Profit & Loss A/c in the "Contractors business" is grossly arbitrary, highly unjust, wrong, illegal and in any view highly excessive . 3. Because, in any view, CIT(A) has grossly erred in dismissing the ground against the Assessment u/s 144 of the I.T Act. 4. Because in any view, and without prejudice to the above grounds, addition confirmed, interest charged and the Assessment order passed are wrong, illegal, without opportunity, bad in law and against the facts and law of the case. The department in ITA NoI.T.A No. 296/Agra/2017has raised the following grounds of appeal: "1.The Ld. CIT(A) has erred in law and on facts in restricting net profit rate to 8% of Gross Receipts in place of net profit rate of 12% estimated by the A.O., even though the assessee deliberately did not produce the books of accounts / information required by the AO due to which the AO had no alternative than to estimate assessee's income by applying net profit rate, and to complete assessment u/s 44 of the I.T. Act, 1961. 2. The Ld. CIT(A) has erred in law' and on facts in deleting addition to the....

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.... in ITA No 331(Agra)/2016 the case of Shri Om Prakash Singh Vs ACIT-Circle-3, Mathura (APB 84-105) in which average N.P rate of 3.50% on gross receipts of 14,35,07,199/-was applied. He thus pleaded that appellant Gross receipts being Rs. 27,72,26,469/- rate of 2.65% as was applied in the case of M/s. Sri Siddheshwar Engineer India (P) Ltd.(supra) would be the reasonable rate to be applied in the case of the assessee. 5. The respondent, D.R. Shri. Waseem Arshadstrongly disputed the arguments raised by the Ld. A.R, supported the order of the Assessing officer, placed reliance upon the order passed by the Assessing officer and also submitted that estimate is a question of fact and not question of law and relied upon Judgement of the Hon'ble Gujarat High Court in the case of Sanjay Oilcake Industries Vs CIT 316 ITR 274 (Gujarat) for the proposition that estimate should be at a particular sum or at a different sum, can never be a question of law. It was also submitted that this Judgement by the Hon'ble Gujarat High Court stood affirmed by the Hon'ble Supreme Court. 6. We have heard both the sides, perused the material on records and the judgments relied upon. It is undisputed fact tha....

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.... Vs Surjit Singh 210 ITR 83 (All.) in which case the order of the Tribunal was upheld where it has applied flat rate of N.P based on past history and profit disclosed in comparable case operating in similar area. 8. We are reminded here thatthe Hon'ble Supreme Court in the case of CIT vs. Siamon Carves Ltd. 105 ITR 212 (S.C.) guiding the administration of justice has observed that "The taxing authorities exercise quasi-judicial. In doing so they must act in a fair and not a partisan manner. Although it is a part of their duty to ensure that no tax legitimately due form an appellant should remain un-recovered, they must also at the same time not act in a manner as might indicate that scales are weighed high against the appellant. The assessing authority has to look to the substance of the situation and decide the matter in such a manner that neither the Revenue is put to unreasonable loss nor is the assessee subjected to unreasonable hardship as held by the Hon'ble Calcutta High Court in the case of CIT Vs Hazaribagh Coal Syndicate Pr. Ltd. 177 ITR 135 (Cal.) 9. In this background of the matter and in the light of precedents we bring ourselves to the order passed by the learned As....

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....irm. We, therefore, reject the submission of the assessee to apply 2.65% as Net Profit as was applied in the case of M/s. Sri Siddheshwar Engineer India (P) Ltd.(supra)as assessee therein is based in Etawah, and is a Private Limited Company and the Assessing framing the assessment happened to be different. Therefore, preference cannot be given to M/s. Sri Siddheshwar Engineer India (P) Ltd (supra). Thus, we direct the learned Assessing officer to apply N.P rate of 6% on gross receipts of Rs. 27,72,26,469/-. 11. Ours view finds support from the Judgement of the Hon'ble Supreme Court in the case of CIT Vs K.Y Pilliah &Sons 63 ITR 411 (S.C) wherein the Hon'ble Supreme Court framed the following question of law for its judicial consideration: "(1) whether the estimate of the income of the assessee confirmed by the Tribunal rests upon irrelevant considerations and the estimate is not made in accordance with law? The Hon'ble Supreme Court answered the question of law holding as under: 12. The ITO computed the profits from the business at a flat rate. The gross profits disclosed by the assessees yielded a rate of 3.8%. It appeared, however, that the normal rate of gross profits in s....