TaxTMI 
TaxTMI 
2024 (7) TMI 146
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....closed by others in the same line of trade. He, therefore, submits that the appeal deserves to be allowed and the substantial question of law deserves to be answered in favour of the revenue. 4. Despite case having been called on, none appeared for the respondent/assessee. 5. We have carefully considered submissions of learned Counsel for the appellant. 6. We find that the respondent/assessee is a private limited company engaged in business of civil contract. During the assessment year 2009-10 the assessee executed two projects as 'sub-contractor' on behalf of M/s. Hindustan Steel Works Ltd. and M/s. Engineering Projects of India Ltd. for construction of road under 'Prime Minister Gramin Sadak Yojana and construction of central jail at Vishalgarh, Tripura'. During the assessment year in question the assessee had made purchase of Rs. 13,85,34,422/- from various parties which were claimed as deduction in its profit and loss account. The details of parties were furnished during the assessment proceedings. The assessing officer issued notice under Section 133 (6) of the Income Tax Act, 1961 (hereinafter referred to such Act, 1961) to the parties for verification of the transac....
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....rofit has been estimated from 4% to 6% and there are number of cases in which the profit has been estimated from 8% to 12%. The proviso to sub-section 1 of Section 44AD provides that it is applicable only if the gross receipt are loss that Rs. 40 lakhs. However, the Assessing Officer and appellate authorities can take the help of general principles of law laid down in Section 44AD and it does not mean that it has applied it ipso facto on the facts of the assessee. A help has been just taken from the provisions to determine the net profit ratio figure and applying the same in the case of a contractor's case and that too after being accepted by the appellant and as per ground of appeal no. 10. During the appellate proceedings the appellant after going through the assessment order and in the facts and circumstances has submitted as follows:- "Without prejudice to above factual position and considering the supply of construction material mostly by unorganized sector and considering the net result of various construction companies, and considering the sub construction business, the CIT(A) may adjudicate the appeal by applying net profit rate of 8% on contract receipts of Rs....
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....t. From the facts of the case, we find that the nature of the work of the assessee has not been doubted and so in the similar facts and circumstances various Hon'ble courts have held that a reasonable percentage of profit can be worked out. Some of the similar case laws are cited below. 1. In the case of M/s. Triveni Enterprise, Hyderabad Vs. the Income Tax Officer Wd 6 (1) ITA No. 352/Hyd/2011 & 353. Hyd/2011 it has been held that in the AY 2006-07 and 2008-09, the assessee was engaged in the business of Civil construction. Assessee fails to prove the expenses details AO estimated the income of the assessee at 12% of the gross receipt. On appeal, Learned CIT(A) directed the AO to estimate the income at 8% in the case of main contract receipts and at 6% on the sub contract receipt. Tribunal direct the Assessing Officer to estimate the income of the assessee at 8% on main contract receipts and at 5% of the sub contract receipts as above said. 2. In the case of Shri Om Prakash Tripathi Vs ACIT (Contractor) 2(1), Farrukhabad. ITA No. 330/Agr/2005 it has been held that, AY 2001-02, the assessee was engaged in the business of construction. Net profit rate ....
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....tal income by applying net profit rate of 4% Both the assessee and revenue has challenged to the extent of order against them. The Tribunal inclined upon the order of the Ld. CIT (A) and accordingly confirmed." In addition to the above we also find that the assessee has declared the profit in its own costs for the earlier years and subsequent years, showing very less amount of profit in terms of percentage and the same was accepted by the Revenue. Therefore in our considered view we find no reason to interfere in the order of Ld. CIT(A) and this ground of Revenue's appeal is dismissed." "To ensure that a best judgment assessment is conducted with fairness and impartiality, the following principles are to be satisfied: a) Deficiency of Information: The initiation of the assessment occurs when the assessee fails to furnish complete and accurate information. In such instances, the assessing officer is authorized to commence a best judgment assessment based on the extant information. b) Due Diligence: Prior to invoking a best judgment assessment, the assessing officer is obligated to undertake reasonable efforts to procure the necessary information. This entails i....