M.R.Constructions, Hyderabad V. Additional Commissioner of Income Tax, Hyderabad

ITA 1458/HYD/2013

• Counselvise Citation: 145822514 RSA 2013
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• Keywords: Opportunity of being heard
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1458/HYD/2013 ASSESSMENT YEAR : 2010-11 M.R. CONSTRUCTIONS, HYDERABAD. PAN AAMFM5609D ADDL. COMMISSIONER OF INCOME-TAX, RANGE 9, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI P. RAVISESHAGIRI RAO REVENUE BY SHRI B. RAMAKRISHNA DATE OF HEARING 09-10-2014 DATE OF PRONOUNCEMENT 15-10-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 10/07/2013 OF CIT(A)-VI, HYDERABAD RELATING TO AY 2 010-11. 2. ASSESSEE HAS RAISED FOUR GROUNDS. GROUND NOS. 1 & 4 BEING GENERAL IN NATURE, ARE NOT REQUIRED TO BE ADJUDICAT ED. 3. GROUND NO. 2 IS IN RESPECT OF ASSESSING THE CONT RACT RECEIPTS AT RS. 19,17,08,176 IN STEAD OF RS. 12,05,38,441 AS DI SCLOSED BY ASSESSEE AND GROUND NO. 3 IS AGAINST ESTIMATING THE PROFIT AT 8.5%. 4. BRIEFLY THE FACTS ARE, ASSESSEE A PARTNERSHIP FI RM IS ENGAGED IN EXECUTING WORKS CONTRACT. FOR THE AY UNDER DISPUTE, ASSESSEE FILED ITS 2 ITA NO. 1458/HYD/2013 M/S M.R. CONSTRUCTIONS RETURN OF INCOME ON 15/10/2010 DECLARING TOTAL INCO ME OF RS. 57,76,751. DURING THE SCRUTINY ASSESSMENT PROCEEDIN G AS NOTED BY AO IN THE ASSESSMENT ORDER, IN SPITE OF SEVERAL OPP ORTUNITIES BEING GRANTED, ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUN T/BILLS AND VOUCHERS ON THE PLEA THAT THEY WERE MISPLACED DURIN G THE COURSE OF SHIFTING OF OFFICE RECORDS FROM WORK SITE. ASSESSEE FURTHER REQUESTED THE AO TO COMPLETE THE ASSESSMENT BY ESTIMATING THE INCOME AT 8.5% OF THE TURNOVER. AO NOTICED THAT AS PER 26AS STATEM ENT, ASSESSEE HAS RECEIVED TOTAL AMOUNT OF RS. 19,17,08,176 FROM M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. WHEREAS AS P ER THE P&L A/C SUBMITTED ALONG WITH RETURN OF INCOME, ASSESSEE HAS SHOWN GROSS CONTRACT RECEIPTS AT RS. 12,05,38,411. WHEN THE AO CALLED UPON ASSESSEE TO EXPLAIN THE DIFFERENCE, ASSESSEE FILED A RECONCILIATION STATEMENT AND SUBMITTED THAT THE DIFFERENCE OF RS. 8,16,92,576 BETWEEN THE AMOUNT SHOWN IN THE 26AS STATEMENT AND P&L ACCOUNT SUBMITTED WITH THE RETURN WAS ON ACCOUNT OF PROVISI ONAL ENTRIES MADE BY M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD . ON 31/03/2012, WHICH WAS REVERSED BY THEM IN THE NEXT FY. IN SUPP ORT OF SUCH CLAIM, ASSESSEE FILED A COPY OF ITS LEDGER ACCOUNT IN THE BOOKS OF M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. AO, HOWEVER, WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE FOR THE FOLLOWING REASONS: (I) ON 01.02.2013, INFORMATION U/S 133(6) OF THE I T. ACT WAS CALLED FOR FROM M/S. VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD., HYDERABAD TO GIVE COMPLETE DETAILS OF THE SUB-CONTRACT AGREEMENT ENTERED WITH THE ASSESSEE, ALONG WITH COPIES OF BILLS RAISED BY M/S M.R. CONSTRUCTIONS, ADVANCE IF ANY TO M/S. MR CONSTRUCTIONS ETC. THE IN FORMATION WAS REQUIRED TO BE SUBMITTED BY 11.02.2013. BUT IT IS S EEN THAT M/S. VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. FAILED TO CO MPLY WITH THE NOTICE U/S 133(6) OF THE LT. ACT. THE ASSESSEE ITSELF FILED A COPY OF ITS LEDGER ACCOUNT IN THE BOOKS OF M/S. VISHWA INFRASTRUCTURES AND SER VICES PVT. LTD., WHICH CANNOT BE ACCEPTED AT THE FACE VALUE. (II) SECONDLY, IT IS NOT KNOWN AS TO WHY M/ S. VI S HWA INFRASTRUCTURES AND SERVICES PVT. LTD. WILL CREATE A PROVISION ENTRY OF RS.3,27,26,881/ - & RS.3,38,52,748/- IN ITS BOOKS OF ACCOUNT AND AT THE SAME TIME ALSO DEDUCTED TDS @ 2% ON THE SAID ENTRIES. THE REASON FOR MAKING THIS 3 ITA NO. 1458/HYD/2013 M/S M.R. CONSTRUCTIONS PROVISION ENTRY AND LATER REVERSING IT IN ITS BOOKS OF ACCOUNT HAS NOT BEEN SUBSTANTIATED. (III)THE ASSESSEE HAS NOT PRODUCED ITS BOOKS OF ACC OUNT, SO THAT THE CLAIM MADE BY THE ASSESSEE CAN BE VERIFIED. (IV) FURTHER, A SEARCH OPERATION U] S 132 OF THE LT.ACT HAS ALREADY BEEN CONDUCTED IN M/S. VISHWA GROUP OF COMPANIES AND ITS RELATED PERSONS ON 07.08.2012 BY THE INVESTIGATION WING, HYDERABAD. TH E AUTHENTICITY OF THE ENTRIES MADE BY M/ S. VISHWA INFRASTRUCTURES AND SE RVICES PVT. LTD. IN ITS BOOKS OF ACCOUNT REGARDING REVERSAL OF THE SAID PRO VISION IS ALSO NOT FREE FROM DOUBT. (V) THE ASSESSEE HAS SHOWN CLOSING WORK-IN-PROGRESS OF RS. L ,25,00,000/- IN THE PROFIT & LOSS A/C. IT WAS CLAIMED THAT THE VALUE IS WORKED O UT ON THE BASIS OF ATTRIBUTABLE PORTION OF EXPENDITURE RELATI NG TO WORK TO BE CERTIFIED & BILLED. BUT NO METHOD OF COMPUTATION OF CLOSING STO CK HAS BEEN PROVIDED AND IT IS CLEAR THAT IT HAS BEEN REFLECTED ON ALL E STIMATE BASIS ONLY. (VI)AS PER 26AS STATEMENT, THE ASSESSEE HAS BEEN CR EDITED WITH AN AMOUNT OF RS.8,16,92,576/- ON 31.03.2010, ON WHICH TDS OF RS.16,33,852/- HAS BEEN DULY DEDUCTED AND ALSO DEPOSITED BY THE DEDUCT OR. HENCE, THE ASSESSEE WAS REQUIRED TO OFFER THIS AMOUNT AS TURNOVER, DURI NG THE YEAR UNDER CONSIDERATION, AS IT WAS FOLLOWING MERCANTILE SYSTE M OF ACCOUNTING. THE 26AS STATEMENT IS A STATEMENT, ON THE BASIS OF WHICH CREDIT OF TDS IS ALLOWED TO THE ASSESSEE AND ANY AMOUNT CREDI TED INTO THE ACCOUNTS OF THE ASSESSEE/PAID TO THE ASSESSEE, SHOU LD BE OFFERED TO TAX, AS TURNOVER / RECEIPTS DURING THE YEAR UNDER C ONSIDERATION ONLY. THUS, THE AO ADOPTED THE GROSS CONTRACT RECEIPTS AT RS. 19,17,08,176 AS MENTIONED IN THE 26AS STATEMENT. BEING AGGRIEVED WITH THE ACTION OF THE AO IN CONSIDERING THE CONTRACT RECEIPTS AT R S. 19,17,08,176, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CI T(A) ALSO SUSTAINED THE VIEW OF THE AO BY HOLDING AS UNDER: 5.7 THE FACTS OF THE CASE FURTHER REVEAL THAT THE APPELLANT WAS FOLLOWING MERCANTILE METHOD OF ACCOUNTING AND IT HA S NOT REVEALED THE REASONS FOR HOLDING BACK THE AMOUNTS OF RS. 8,1 6,92,576/- BY PASSING THE ENTRIES IN THE FORM OF PROVISIONS, THAT TOO WHERE THE TDS WAS EFFECTED ON SUCH AMOUNTS. THIS INFORMATION COULD NOT BE VERIFIED WITH THE PRINCIPAL CONTRACTOR, AS IT AP PEARS THAT THERE WAS NO CLARIFICATION OR CONFIRMATION ON THE SAID IS SUE. HENCE, IN THE ABSENCE OF REASONABLE EXPLANATION FOR NOT DISCL OSING THE SAID 4 ITA NO. 1458/HYD/2013 M/S M.R. CONSTRUCTIONS AMOUNTS FOR COMPUTING THE GAINS OF BUSINESS, IN THE YEAR OF ACCRUAL OF SUCH AMOUNTS, I HAVE NO HESITATION TO HOLD THAT THE AMOUNT OF RS. 8,16,92,576/- REPRESENTING THE DIFFER ENCE IN THE CONTRACT RECEIPTS AS PER 26AS STATEMENT AND THE AMOUNTS AS REFLECTED IN THE CONTRACT RECEIPTS AS PE R RETURN OF INCOME, REPRESENT THE CONTRACT RECEIPTS FOR THE YEAR ON WHICH THE NET PROFIT NEED TO BE ESTIMATED AT 8% AS AGREED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. ACCOR DINGLY, THE ASSESSING OFFICER IS ALLOWED TO COMPUTE THE NET PROFIT ON THE CONTRACT RECEIPTS OF RS. 19,17,08,176/- AS A GAINST RS. 12,19,81,102/- OFFERED BY THE APPELLANT, FOR TH E YEAR UNDER REFERENCE. THE SAID AMOUNTS IF OFFERED FOR TA XATION IN THE SUBSEQUENT YEAR, THE SAME MAY BE DEALT ACCORDIN GLY. FURTHER, THE APPELLANT IS ELIGIBLE TO BE GIVEN CRED IT FOR THE TDS MADE ON THE SAID CONTRACT RECEIPTS OF RS. 8,16,92,576/-, HAVING CONSIDERED THE SAID RECEIPTS FOR TAX PURPOSE, FOR THE YEAR UNDER REFERENCE. THE GROUND O F APPEAL IS TREATED AS DISMISSED. 5. THE LEARNED AR REITERATING ITS STAND TAKEN BEFOR E THE DEPARTMENTAL AUTHORITIES SUBMITTED THAT ASSESSEE IS EXECUTING THE WORK AS SUB-CONTRACTOR OF M/S VISHWA INFRASTRUCTURE S AND SERVICES PVT. LTD. IT WAS SUBMITTED THAT DURING THE RELEVANT FY, ASSESSEE HAS ACTUALLY RECEIVED AN AMOUNT OF RS. 12,19,81,102 TOW ARDS CONTRACT RECEIPTS FROM M/S VISHWA INFRASTRUCTURES AND SERVIC ES PVT. LTD. IT WAS SUBMITTED THAT DIFFERENTIAL AMOUNT OF RS. 8,16,92,5 76 ARISING OUT OF THE AMOUNT SHOWN IN 26AS STATEMENT IS DUE TO THE FA CT THAT THE MAIN CONTRACTOR M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. HAS MADE ENTRIES IN RESPECT OF PROVISION MADE ON 31/03/ 10 AMOUNTING TO RS. 3,27,26,881 AND RS. 3,38,52,748 RELATING TO THE WORK OF OLD CITY SEWERAGE ZONE NO.2 AND PROVISION FOR AN AMOUNT OF R S. 1,51,12,951 IN RESPECT OF WORK RELATING TO OLD CITY SEWERAGE ZO NE NO. 1. IT WAS SUBMITTED BY THE LEARNED AR THAT THESE ARE ONLY IN THE NATURE OF PROVISION MADE IN THE BOOKS OF PRINCIPAL CONTRACTOR AND THEY DO NOT REPRESENT EITHER BILLS RAISED OR BILLS RECEIVED BY ASSESSEE DURING THE RELEVANT FY. IN THIS CONTEXT, LEARNED AR DREW OUR A TTENTION TO THE RECONCILIATION STATEMENT AT PAGE 24 OF ASSESSEES P APER BOOK AND ASSESSEES LEDGER ACCOUNT IN THE BOOKS OF M/S VISHW A INFRASTRUCTURES AND SERVICES PVT. LTD., A COPY OF WHICH IS PLACED A T PAGES 44 & 45 OF 5 ITA NO. 1458/HYD/2013 M/S M.R. CONSTRUCTIONS ASSESSEES PAPER BOOK. LEARNED AR SUBMITTED THAT TH ESE PROVISIONAL ENTRIES MADE IN THE BOOKS OF ACCOUNT WERE SUBSEQUEN TLY REVERSED IN THE NEXT FY BY M/S VISHWA INFRASTRUCTURES AND SERVI CES PVT. LTD. IN THIS CONTEXT, HE REFERRED TO PAGE 49 OF THE PAPER B OOK. LEARNED AR SUBMITTED THAT THE DIFFERENTIAL AMOUNT OF RS. 8,16, 92,576 FOR WHICH PROVISION WAS MADE BY THE MAIN CONTRACTOR IN ITS BO OKS OF ACCOUNT WAS ACTUALLY RECEIVED BY ASSESSEE IN FY 2010-11 AN D WAS SHOWN AS INCOME IN THE AY 2011-12. IN THIS CONTEXT, LEARNED AR REFERRED TO THE STATEMENT OF INCOME SHOWN FOR AY 2011-12, A COPY OF WHICH IS PLACED AT PAGE 31 OF THE ASSESSEES PAPER BOOK. LEARNED AR SUBMITTED THAT AS THE ENTIRE INCOME RECEIVED FROM THE SUB-CONTRACT WORK WAS SHOWN IN AYS 2010-11 & 2011-12, THE ADDITION OF THE DIFFE RENTIAL AMOUNT IN THE IMPUGNED AY WOULD AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME. 6. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T ASSESSEE NEITHER DURING THE ASSESSMENT PROCEEDING NOR BEFORE THE CIT(A) HAS PRODUCED ITS BOOKS OF ACCOUNT, BILLS AND VOUCHERS, ETC. THEREFORE, IN ABSENCE OF ANY INFORMATION, AO HAD NO OTHER OPTION, BUT, TO ADOPT CONTRACT RECEIPTS AS SHOWN IN 26AS STATEMENT. LEARN ED DR SUBMITTED THAT IF THE AMOUNTS ARE IN THE NATURE OF PROVISION, THERE IS NO REASON WHY THE MAIN CONTRACTOR WOULD HAVE DEDUCTED TAX AT SOURCE AND PAID TO THE GOVERNMENT ACCOUNT. LEARNED DR SUBMITTED THA T AS THE PRINCIPAL CONTRACTOR FAILED TO SUBMIT ANY INFORMATI ON INSPITE OF NOTICE GIVEN TO THE AO, THE VERACITY OF ASSESSEES CLAIM C OULD NOT BE ESTABLISHED. HE FURTHER SUBMITTED THAT IN ABSENCE O F BOOKS OF ACCOUNT AND OTHER INFORMATION PRODUCED BY M/S VISHWA INFRAS TRUCTURES AND SERVICES PVT. LTD., THE LEDGER ACCOUNT PRODUCED BY ASSESSEE CLAIMING IT TO BE IN THE BOOKS OF ACCOUNT OF M/S VISHWA INFR ASTRUCTURES AND SERVICES PVT. LTD. CANNOT BE ACCEPTED AT FACE VALUE . LEARNED DR SUBMITTED THAT AS THERE IS TOTAL LACK OF INFORMATIO N EITHER BY ASSESSEE OR BY M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. WITH REGARD TO 6 ITA NO. 1458/HYD/2013 M/S M.R. CONSTRUCTIONS ACTUAL CONTRACT RECEIPTS, AO HAS RIGHTLY ADOPTED TH E FIGURE AS MENTIONED IN FORM 26AS STATEMENT. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OT HER MATERIALS ON RECORD. THERE CANNOT BE DISPUTE WITH THE FACT THAT THE ASSESSEE HAS NOT PRODUCED ITS BOOKS OF ACCOUNT, BILLS VOUCHERS, ETC. EITHER BEFORE AO OR BEFORE CIT(A). IT IS ALSO A FACT ON RECORD TH AT THERE IS A DIFFERENCE OF RS. 8,16,92,576 BETWEEN THE CONTRACT RECEIPTS SHOWN BY ASSESSEE IN THE P&L A/C AND AS MENTIONED IN 26AS ST ATEMENT. ASSESSEE HAS TRIED TO RECONCILE THE DIFFERENCE BY E XPLAINING THAT THE AMOUNT OF RS. 8,16,92,576 REPRESENTS THE PROVISION ENTRY MADE BY THE MAIN CONTRACTOR M/S VISHWA INFRASTRUCTURES AND SERV ICES PVT. LTD.. A REFERENCE TO THE ASSESSEES LEDGER ACCOUNT CLAIMED TO BE IN THE BOOKS OF M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD ., COPIES OF WHICH ARE PLACED AT PAGES 44 & 45 OF THE ASSESSEES PAPER BOOK SHOWS THAT THE DIFFERENCIAL AMOUNT OF RS. 8,16,92,576 IS COMPR ISED OF THE FOLLOWING ITEMS: 1. RS. 1,51,12,951 ON 31/03/10 RELATING TO OLD CITY SEWERAGE ZONE 1 WORK AND 2. RS. 3,27,26,881 AND RS. 3,38,52,748 ON 31/03/10 RELATING TO OLD CITY SEWERAGE ZONE 2 WORK IT FURTHER APPEARS FROM THE DOCUMENT SUBMITTED BY A SSESSEE THAT THE MAIN CONTRACTOR HAS REVERSED THE AFORESAID PROVISIO NS IN THE SUBSEQUENT FY I.E. ON 30/06/2010. HOWEVER, THESE FA CTS COULD NOT BE CROSS-VERIFIED EITHER BY AO OR BY CIT(A) AS THE MAI N CONTRACTOR M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. NEITH ER PRODUCED ITS BOOKS OF ACCOUNT NOR ANY OTHER INFORMATION WITH REG ARD TO THE BILLS RAISED BY ASSESSEE OR AMOUNT PAID BY THEM TOWARDS C ONTRACT WORK. HOWEVER, IT IS THE CONTENTION OF THE LEARNED AR BEF ORE US THAT THE AMOUNT RECEIVED FROM THE ENTIRE CONTRACT WORKS HAS BEEN SHOWN IN THE AY 2010-11 AND 2011-12. IT WAS SUBMITTED BY THE LEARNED AR THAT IN AY 2011-12, ASSESSEE HAS DISCLOSED GROSS CONTRAC T RECEIPTS OF RS. 7 ITA NO. 1458/HYD/2013 M/S M.R. CONSTRUCTIONS 20,54,64,464, WHICH ALSO INCLUDES THE DIFFERENTIAL AMOUNT OF RS. 8,16,92,576. IF THE AFORESAID CLAIM OF ASSESSEE IS FOUND TO BE CORRECT, THEN, THERE WILL BE NO JUSTIFICATION IN INCLUDING T HE AMOUNT OF RS. 8,16,92,576 IN THE CONTRACT RECEIPTS FOR THE IMPUGN ED AY AS SUCH INCLUSION WOULD RESULT IN TAXING THE SAME INCOME TW ICE. FURTHER, IT TRANSPIRES FROM MATERIALS ON RECORD THAT A SEARCH A ND SEIZURE OPERATION WAS CONDUCTED IN CASE OF M/S VISHWA INFRA STRUCTURES AND SERVICES PVT. LTD. THEREFORE, IT WILL NOT BE DIFFIC ULT TO CROSS VERIFY CORRECTNESS OF ASSESSEES CLAIM THROUGH THE AO WHO IS CONDUCTING THE ASSESSMENT PROCEEDING OF M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE ARE INCLINED TO REMIT THE MATTER BACK TO THE FILE OF THE AO TO VERI FY THE ACTUAL AMOUNT RECEIVED BY ASSESSEE TOWARDS SUB-CONTRACT WORK ENTR USTED BY M/S VISHWA INFRASTRUCTURES AND SERVICES PVT. LTD. AND I F IT IS FOUND THAT ASSESSEE HAS SHOWN THE BALANCE CONTRACT RECEIPTS IN CLUDING THE DIFFERENTIAL AMOUNT OF RS. 8,16,92,576 IN ASSESSMEN T YEAR, 2011-12, THEN, THERE WILL BE NO CASE FOR CONSIDERING THE AMO UNT OF RS. 8,16,92,576 AS RECEIPTS IN THE IMPUGNED AY. THE AO MUST AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE IN THE MATTER. 8. THE NEXT ISSUE RAISED BY ASSESSEE IS IN RESPECT OF ESTIMATING NET PROFIT ON GROSS CONTRACT RECEIPT AT THE RATE OF 8.5 %. AT THE OUTSET, IT NEEDS TO BE CLARIFIED THAT ASSESSEE THOUGH IN THE G ROUND HAS MENTIONED THAT NET PROFIT RATE OF 8.5% HAS BEEN EST IMATED, HOWEVER, ON PERUSAL OF THE ORDER OF FIRST APPELLATE AUTHORIT Y, IT IS QUITE EVIDENT THAT HE HAS DIRECTED TO ESTIMATE THE PROFIT AT 8%. BE THAT AS IT MAY, LEARNED AR CONTENDED THAT APPLICATION OF 8% NET PRO FIT RATE ON SUB- CONTRACT WORK IS EXCESSIVE. FURHTER, RELYING ON TH E DECISION OF ITAT IN CASE OF C. EASWAR REDDY HE CONTENDED THAT NET PROFI T RATE OF 5% SHOULD BE ADOPTED. HOWEVER, WE ARE NOT INCLINED TO ACCEPT SUCH CONTENTION OF ASSESSEE. AS CAN BE SEEN, NOT ONLY DU RING THE SURVEY OPERATION BUT ALSO DURING THE ASSESSMENT PROCEEDING , ASSESSEE ITSELF MADE A REQUEST TO ESTIMATE THE PROFIT AT 8.5% ON TH E GROSS CONTRACT 8 ITA NO. 1458/HYD/2013 M/S M.R. CONSTRUCTIONS RECEIPTS. THOUGH, AO WHILE COMPLETING THE ASSESSMEN T HAS ESTIMATED PROFIT AT 8.5% BY ACCEPTING ASSESSEES REQUEST BUT THE CIT(A) HAS REDUCED THE SAME TO 8%. IN THESE CIRCUMSTANCES, ASS ESSEES CLAIM THAT PROFIT SHOULD BE ESTIMATED AT 5% CANNOT BE ACC EPTED. ACCORDINGLY, WE UPHOLD THE ESTIMATION OF NET PROFIT AT 8% AS DIRECTED BY LEARNED CIT(A). 9. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER, 2014 SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 15 TH OCTOBER, 2014 KV COPY TO:- 1) M.R. CONSTRUCTIONS C/O. SHRI S. RAMA RA0, ADVOC ATE, FLAT NO. 102, SHRIYAS ELEGANCE, H.NO. 3-6-643, ST. NO. 9, HIMAYATNAGAR, HYDERABAD 500 029 2) ADDL. CIT, RANGE - 9, HYDERABAD 3) CIT(A)-VI HYDERABAD. 4) CIT-VI, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.