Deora Electric Works Vs JCIT (ITAT Allahabad)
ITAT Allahabad held that in the absence of any comparable cases, the past history of the assessee, which has been accepted in many assessments under section 143(3) of the Act, cannot be overlooked. Accordingly, directed to assess net profit @3.5% instead of 7%/5% of contractual receipts.
Facts- The assessee declared contractual receipts from various Government Departments at Rs.10,66,77,556/-. Of the above, receipts amounting to Rs.5,87,25,039/- came from Branch Office of Jaipur and pertained to sales of Generators that were dispatched from Jaipur Branch against Government orders. AO, on going through the agreements entered into by the assessee with various Government Departments, noticed that some of the works had been completed before the end of the financial years, but the entire Tender value had not been shown as received by the assessee. AO also noted other discrepancies.
On the basis of observations made by him, AO rejected the book results and applied net profit rate of 7% on the contractual receipts of Rs.10,66,77,556/- as against the declared net profit rate of 2.02%. He also made an addition of Rs.56,69,837/- on account of short receipts.
CIT(A) upheld the action of AO. Being aggrieved, the present appeal is filed.
