Judgment · High Court

(Per. Hon’ble Sri Justice Goda Raghuram) This appeal by the Revenue under Section 260-A of the Income Tax Act, 1961 is from the order of the Income Tax Appellate Tribunal, Bench ‘A’, Hyderabad, dated 05.06.2007 in I.T.A No.453/Hyderabad/2001, pertaining to the assessment year 1997-98. The Tribunal confirmed the conclusion recorded by the Commissioner of Income Tax (Appeals), Hyderabad, vide its order dated 19.03.2001; that the respondent-assessee had executed the sub-contract works awarded by its sister concern M/s Navayuga Engineering Company Limited. While the Commissioner of Income Tax (Appeals) estimated the net profit rate on the total contract receipts of Rs.75,59,120/- at 18% and directed the Assessing Officer to substitute the profit so estimated for Rs.75,59,120/- added by the Assessing Officer in the assessment, the Tribunal held that since the main contractor, after retaining the margin of profit at 14.28% in respect of earth work and 16.6% in respect of area development and compound wall had given this contract to the respondent-assessee, it cannot be reasonably concluded that the assessee had earned a net profit at the rate of 18%. The Tribunal therefore in the facts and circumstances of the case, considered it fair and reasonable to compute the net profit rate at 10% on the contract receipts and directed the Assessing Officer to apply the net profit rate at 10% on the contract receipts of Rs.75,59,120/- as against 18% applied by the Commissioner of Income Tax (Appeals). No question of law much less any substantial question of law arises on the conclusions of fact and concurrent appreciation of the material on record, mainly on the issue of sub-contract to the respondent-assessee by the Commissioner of Income Tax (Appeals) and as regards the finding of the Appellate Tribunal on the net profit rate. The appeal is accordingly dismissed at the stage of admission after hearing the learned Senior Standing Counsel for the appellant. No order as to costs. _____________________________ JUSTICE GODA RAGHURAM _____________________________ JUSTICE N.RAVI SHANKAR

23.08.2011 Gsn