CA Kanhaiya Kumar Agarwal
Brief Facts of the Case and Question of Law:
Brief Facts
The assessee-company is a Civil Contractor as well as trading in sarees and fabrics. The assessee-company filed its return of income on 28-09-2008 declaring total income at Rs.3,07,285/-. As noted by AO, the assessee could not produce the books of account and supporting bills and vouchers. The AO accordingly resorted to Sec. 144 of the Act and in response to show cause notice u/s. 145(3) of the Act rejected the book results.
The AO assessed the income from civil construction by estimated net profit @ 8% on the total turnover of Rs. 3,43,20,000/- at Rs. 27,45,600/- and also applied the provisions of Sec. 44AF of the Act on the trading business of sarees and fabrics by estimating NP rate @ 2% of the turnover of Rs. 9,75,15,575/-. Aggrieved against the estimation of NP on civil contracts receipts @ 8%, assessee preferred appeal before CIT(A). The assessee has not challenged the rejection of book results u/s 145 of the Act which was confirmed by CIT(A). The CIT(A) restricted the net profit to 5% of the gross civil contracts receipts.
Question of Law
This appeal of Revenue is against the order of CIT(A) in applying net profit @ 5% of gross civil contractual receipt as against 8% as applied by AO.
