The Commissioner Of Income Tax-Iv, Nagpur v. M/S. Smruti Constructions, Ramnagar,Nagpur

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR. INCOME TAX APPEAL NO.4 OF 2011 (The Commissioner of Income Tax-IV, Nagpur Vs. M/s. Smruti Constructions, Ramnagar,Nagpur) __________________________________________________________________________ Office Notes, Office Memoramda of Coram,appearances, Court's orders of directionsand Registrar's Orders. Court's or Judge's orders. CORAM: B.P. DHARMADHIKARI & P.D. KODE, JJ. DATE:NOVEMBER 21, 2011. Heard Shri Parchure, Adv. with Shri Mohta Adv. for petitioner and Shri Thakkar, Adv. for respondent. The substantial question raised is whether the Income Tax Appellate Tribunal has properly appreciated the sale of shop for Rs.21,87,000/- in the assessment year 2005-2006, while directing that the profit needed to be worked out at 5% of the gross receipt instead of 8%. Shri Parchure, Adv. has relied upon the order of ITAT to show how this sale of shop along with other contracts has been viewed by assessing authority and the 8% of gross receipts is directed to be taken into account as profits. Shri Thakkar, Adv. has relied upon the observations made by ITAT in its order. In para 7, it is found that the assessee had returned net profit for preceding year at only 0.10% and in subsequent assessment year 2006-07 the assessee has declared a net profit at 0.42% and in the subsequent assessment year 2007-08 the assessee had declared net profit at 0.78%. Because of those findings the profit of 8% as accepted by the Commissioner of Income Tax has been brought it to 5% by the ITAT. The sale of shop block is event which has taken place in the year 2005-06. The ITAT while passing assessment order 2005-06 does not make it clear whether in other assessment years such sale, have taken place or not. We are, therefore, not in a position to sustain the reduction from 8% to 5% as ordered by the ITAT. Shri Thakkar, Adv. has urged that assessee is a contractor and builder and therefore, the sales are taking place every year. As the ITAT has reversed the findings by lower authorities, we direct the ITAT to apply its mind in this regard. Only for that purpose the impugned order dated 21.04.2011 is hereby quashed and set aside and matter is placed back before ITAT. Rule is made absolute in the above terms. No costs. JUDGE JUDGE