Itta/267/2011 Of The Commissioner Of Income Tax [Central] v. M/S.navayuga Exports Limited

THE HON'BLE SRI JUSTICE GODA RAGHURAMANDTHE HON'BLE SRI JUSTICE N.RAVI SHANKAR I.T.T.A.NO.267 of 2011 JUDGMENT: (Per. Hon’ble Sri Justice Goda Raghuram) This appeal by the Revenue under Section 260-A of theIncome Tax Act, 1961 is from the order of the Income TaxAppellate Tribunal, Bench ‘A’, Hyderabad, dated 05.06.2007 inI.T.A No.453/Hyderabad/2001, pertaining to the assessment year1997-98. The Tribunal confirmed the conclusion recorded by theCommissioner of Income Tax (Appeals), Hyderabad, vide its orderdated 19.03.2001; that the respondent-assessee had executed thesub-contract works awarded by its sister concern M/s NavayugaEngineering Company Limited. While the Commissioner of IncomeTax (Appeals) estimated the net profit rate on the total contractreceipts of Rs.75,59,120/- at 18% and directed the AssessingOfficer to substitute the profit so estimated for Rs.75,59,120/-added by the Assessing Officer in the assessment, the Tribunalheld that since the main contractor, after retaining the margin ofprofit at 14.28% in respect of earth work and 16.6% in respect ofarea development and compound wall had given this contract tothe respondent-assessee, it cannot be reasonably concluded thatthe assessee had earned a net profit at the rate of 18%. TheTribunal therefore in the facts and circumstances of the case,considered it fair and reasonable to compute the net profit rate at10% on the contract receipts and directed the Assessing Officer toapply the net profit rate at 10% on the contract receipts ofRs.75,59,120/- as against 18% applied by the Commissioner ofIncome Tax (Appeals). No question of law much less any substantial question of law arises on the conclusions of fact and concurrent appreciationof the material on record, mainly on the issue of sub-contract tothe respondent-assessee by the Commissioner of Income Tax(Appeals) and as regards the finding of the Appellate Tribunal onthe net profit rate. The appeal is accordingly dismissed at the stage of admission after hearing the learned Senior Standing Counsel forthe appellant. No order as to costs. _____________________________ JUSTICE GODA RAGHURAM 23.08.2011Gsn _____________________________ JUSTICE N.RAVI SHANKAR