ITO, CHENNAI V. Sanford Builders Pvt Ltd., CHENNAI

ITA 1474/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68766 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 01-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI IRS
• Keywords: Rejection of books of accounts
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1474(MDS)/2013 ASSESSMENT YEAR : 2008-09 THE INCOME-TAX OFFICER, COMPANY WARD-VI(1), CHENNAI 600 034. VS. M/S. SANFORD BUILDERS PVT. LTD. TIMES PARTNER NO.58, PERAMBUR BARRACKS ROAD, VEPERY, CHENNAI 600 007. PAN AALCS7196R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N.BETGER I, IRS, JCIT RESPONDENT BY : NONE DATE OF HEARING : 30 TH SEPTEMBER, 2013 DATE OF PRONOUNCEMENT : 30 TH SEPTEMBER, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V AT CHENNAI, DATED 15-3-2013. THE APPEAL ARISES OUT OF THE - - ITA 1474 OF 2013 2 ASSESSMENT COMPLETED UNDER SECTION 143(3), READ WIT H SECTION 144 OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE-COMPANY HAD ENTERED INTO A CONTRAC T WITH M/S.PACL INDIA LIMITED, NEW DELHI, FOR EXECUTI NG LABOUR CONTRACT WORK IN FAVOUR OF THE LATTER. THE LABOUR CONTRACT WAS NECESSARY TO BE CARRIED OUT IN LEVELLING THE AGRICU LTURAL LAND BELONGING TO M/S.PACL INDIA LIMITED. THIS LAND DEV ELOPMENT WAS FOR THE PROJECT OF M/S.PACL INDIA LIMITED. THE LABOUR CONTRACT WAS EXECUTED ON 30-10-2007. THE CONTRACT PROVIDED THAT THE ASSESSEE WOULD BE PAID ` 70,000/- PER ACRE FOR A TOTAL EXTENT OF 660 ACRES OF LAND. 3. IN THE COURSE OF SCRUTINY ASSESSMENT PROCEEDING S, THE ASSESSEE-COMPANY HAS SUBMITTED DETAILS LIKE BAL ANCE-SHEET, PROFIT AND LOSS ACCOUNT, AUDIT REPORT, BANK PASSBOO KS, BANK ACCOUNT STATEMENT, DETAILS OF DIRECTORS AND SHAREHO LDERS, CONFIRMATION LETTERS FROM CREDITORS, DETAILS OF THE WORK UNDERTAKEN BY THE ASSESSEE, LABOUR PAYMENT ACCOUNT DETAILS, WA GE REGISTER, ETC. - - ITA 1474 OF 2013 3 4. THE ASSESSING OFFICER EXAMINED ALL THE ABOVE STATED MATERIALS PLACED BEFORE HIM IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER NOTI CED DISPARITY BETWEEN THE LABOUR PAYMENT REGISTER AND T HE WAGE REGISTER MAINTAINED BY THE ASSESSEE. FOR THE MONTH OF NOVEMBER, 2007, THE LABOUR PAYMENT REGISTER SHOWED WAGES OF MORE THAN ` 3,05,000/- PER DAY, WHEREAS IN THE WAGE REGISTER I T WAS RECORDED THAT 2544 LABOURERS WERE EMPLOYED, WHO WERE PAID A MONTHLY WAGES AT THE RATE OF ` 3,600/-, ` 3,900/-, ` 4050/-, ETC. THE AVERAGE RATE WORKED OUT TO ` 150/- PER DAY. THE ASSESSING OFFICER ALSO OBSERVED THAT THE WAGE REGIS TER REFLECTED ONLY THE NAMES OF THE LABOURERS ALOGWITH THE NAMES OF THEIR FATHERS. BUT, NO DETAILS LIKE THEIR ADDRESSES, ETC . WERE AVAILABLE, WHICH WOULD ENABLE THE ASSESSING OFFICER TO TRACE O UT THEM. IT WAS ALSO NOTICED BY THE ASSESSING OFFICER THAT EVID ENCES LIKE WORK DETAILS AND PAYMENT VOUCHERS WERE NOT PRODUCED BEFORE HIM. ON VERIFICATION OF THE BANK STATEMENTS, IT WA S NOTICED BY THE ASSESSING OFFICER THAT MOST OF THE PAYMENTS WER E MADE TO CERTAIN OTHER COMPANIES, FOR WHICH DETAILS WERE NOT PRODUCED - - ITA 1474 OF 2013 4 BEFORE HIM. IT IS SEEN THAT THE ASSESSEE HAD MADE HUGE WITHDRAWALS FROM THE BANK ACCOUNT AND HUGE AMOUNTS WERE PAID TO DIFFERENT COMPANIES, BUT, WITHOUT ANY CORRESPOND ING DETAILS AND PARTICULARS. THE ASSESSING OFFICER ALSO OBSERV ED THAT CERTAIN PAYMENTS MADE TO CERTAIN COMPANIES SEEMED T O BE SUB- CONTRACT PAYMENTS, FOR WHICH THE ASSESSEE HAD NOT C OMPLIED WITH THE PROVISIONS OF TAX DEDUCTED AT SOURCE (TDS) . 5. IN THE LIGHT OF THE ABOVE OBSERVATIONS, THE ASS ESSING OFFICER ISSUED NOTICE TO THE ASSESSEE PROPOSING TO REJECT THE BOOKS OF ACCOUNTS AND TO ESTIMATE THE INCOME OF THE ASSESSEE AT 10 PER CENT OF THE GROSS RECEIPTS RECEIVED FROM M/S .PACL INDIA LIMITED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR UNDER APPEAL. THE ASSESSEE DID NOT FILE ANY REPLY TO THE SAID SHOW CAUSE NOTICE ISSUED BY THE ASSESSING AUTHORITY . ACCORDINGLY, THE ASSESSING AUTHORITY REJECTED THE B OOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE INCOME-TAX ACT , 1961 ON THE GROUND THAT THE ASSESSING OFFICER WAS NOT SATIS FIED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS MAINTAI NED BY THE - - ITA 1474 OF 2013 5 ASSESSEE AND INSPITE OF NOTICE, THE ASSESSEE HAD NO EXPLANATION AGAINST THE PROPOSAL OF REJECTING THE ACCOUNTS. 6. ACCORDINGLY, THE ASSESSING OFFICER COMPLETED TH E BEST JUDGMENT ASSESSMENT, AFTER REJECTING THE ACCOU NTS, ESTIMATING THE INCOME OF THE ASSESSEE-COMPANY AT 10 PER CENT OF THE GROSS RECEIPTS RECEIVED FROM M/S.PACL INDIA LIMITED. THE GROSS RECEIPT WAS ` 4,61,90,000/-. THE ASSESSING OFFICER ACCORDINGLY DETERMINED THE TOTAL INCOME IN THE CASE OF THE ASSESSEE AT ` 46,19,000/-. 7. THIS ISSUE WAS TAKEN IN FIRST APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS). THE ASSESSEE HAS RELIED ON A NUMBER OF DECISIONS TO SUPPORT ITS ARGUMENTS P LACED BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS). AFTER BRI NGING DOWN ALL THOSE CITATIONS IN HIS ORDER ALONGWITH THE DETA ILED ARGUMENTS MADE BY THE ASSESSEE-COMPANY, THE COMMISSIONER OF I NCOME- TAX(APPEALS) EXAMINED THE CASE IN PARAGRAPH 6.2, RU NNING FROM PAGES 14 TO 16 OF HIS ORDER. THE COMMISSIONER OF I NCOME- TAX(APPEALS), AFTER CONSIDERING SIMILAR CASES, FOUN D THAT THE - - ITA 1474 OF 2013 6 ESTIMATION OF INCOME AT 10 PER CENT OF THE GROSS RE CEIPTS WAS NOT JUSTIFIED, ESPECIALLY BECAUSE THE ASSESSING OFFICER HAS NOT STATED ANY REASON TO ADOPT THAT PARTICULAR RATE OF 10 PER CENT. IN ADDITION TO THAT, THE COMMISSIONER OF INCOME-TAX(AP PEALS) FOUND THAT THE ASSESSEES SISTER CONCERNS HAVE CARRIED OU T SIMILAR LABOUR CONTRACT WORKS FOR M/S.PACL INDIA LIMITED AN D IN SUCH CASES THE INCOME-TAX APPELLATE TRIBUNAL HAS ADOPTED A RATE OF 2.24 PER CENT OF THE GROSS RECEIPTS. IN FACT, THE COMPANIES MENTIONED BY THE COMMISSIONER OF INCOME-TAX(APPEALS ) ARE M/S. RUPA PROMOTERS PVT. LTD., M/S.RISHIKESH BUILDC ON PVT. LTD., M/S.RSM CONSTRUCTION PVT. LTD., M/S.RISHIKESH PROPE RTIES PVT. LTD. THOSE CASES WERE CONSIDERED BY THE INCOME-TAX APPELLATE TRIBUNAL, F-BENCH, DELHI. THOSE ASSESSEES RECEIVED AMOUNTS FROM M/S.PACL INDIA LIMITED AND M/S.PGF LIMITED. T HOSE COMPANIES WERE ALSO UNDERTAKING SIMILAR LAND DEVELO PMENT WORKS FOR THOSE COMPANIES. THE TRIBUNAL HAS DETERM INED THE INCOME OF THOSE COMPANIES AT 2.24 PER CENT OF THE G ROSS RECEIPTS. FOLLOWING THE SAID ORDER OF THE INCOME-T AX APPELLATE TRIBUNAL, DELHI F-BENCH, THE COMMISSIONER OF INCOME - TAX(APPEALS) IN THE PRESENT CASE ALSO ESTIMATED THE INCOME OF - - ITA 1474 OF 2013 7 THE ASSESSEE AT 2.24 PER CENT OF THE GROSS RECEIPTS . ACCORDINGLY, THE COMMISSIONER OF INCOME-TAX(APPEALS) DIRECTED TH E ASSESSING OFFICER TO RECOMPUTE THE INCOME AT 2.24 P ER CENT OF THE GROSS RECEIPTS RECEIVED BY THE ASSESSEE-COMPANY FROM M/S.PACL INDIA LIMITED, AS AGAINST 10 PER CENT ESTI MATED BY THE ASSESSING OFFICER. 8. THE REVENUE IS AGGRIEVED AND, THEREFORE, THIS SECOND APPEAL BEFORE US. 9. THE GROUNDS RAISED BY THE REVENUE READ AS BELOW :- 2.1 THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO RESTRICT THE INCOME OF THE ASSESSEE COMPANY TO THE EXTENT OF 2.24% OF THE GROSS RECEIPTS AS AGAINST 10% OF GROSS RECEIPTS ASSESSED IN THE ASSESSMENT ORDER. 2.2. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT FOR SUCH A HUGE CLAIM OF PAYMENT OF WAGES, THE - - ITA 1474 OF 2013 8 ASSESSEE COULD NOT SUBSTANTIATE THE EXPENDITURE WIT H BILLS/VOUCHERS. 2.3 THE LD. CIT(A) OUGHT TO HAVE NOTED THAT TO CLAIM THAT THE ENTIRE PAYMENT OF WAGES WAS MADE BY CASH, THERE WAS NO CORRESPONDING CASH WITHDRAWAL FROM THE BANK ACCOUNT OF THE ASSESSEE COMPANY. 2.4 THE LD. CIT(A) OUGHT TO HAVE APPRECIATE THE FACT THAT THE BANK ACCOUNT OF THE ASSESSEE COMPANY ONLY SHOWED CHEQUES ISSUED TO SOME OTHER COMPANIES WHICH INDICATED THAT THE ASSESSEE COMPANY HAD MADE SOME SUB-CONTRACT PAYMENTS BUT DID NOT DEDUCT TAX. 3.1. THE LD. CIT(A) RELIED ON THE ORDER OF THE ITAT, DELHI IN COMMON ORDER IN ITA NOS. 2640, 2641, 2642 & 2643/DEL/2011 IN THE ASSESSEES SISTER CONCERNS IN THE CASES OF M/S RUPA PROMOTERS P. LTD, - - ITA 1474 OF 2013 9 RISHIKESH PROPERTIES LTD, RSM CONSTRUCTIONS P. LTD, RISHIKESH BUILDCON LTD FOR THE A.Y. 2008-09. 3.2 IT IS SUBMITTED THAT THE CIT(A)S ORDER RELIED UPON THE ITATS ORDER IN THE ABOVE MENTIONED CASE I S NOT BINDING SINCE THE JURISDICTION HIGH COURT IN TH E CASE OF M/S VISVAS PROMOTERS P. LTD (323 ITR 114) HELD THAT OTHER JURISDICTIONAL TRIBUNALS/COURTS A RE NOT BINDING. 10. WHEN THE MATTER WAS CALLED ON FOR HEARING, NOB ODY WAS PRESENT FOR THE RESPONDENT-ASSESSEE, INSPITE OF SERVICE OF NOTICE. SHRI T.N.BETGERI, THE LEARNED JOINT COMMIS SIONER OF INCOME-TAX APPEARED FOR THE REVENUE AND ARGUED THE CASE. WE PROCEED TO DISPOSE OF THIS APPEAL EX-PARTE, QUA THE ASSESSEE. 11. EVEN THOUGH THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNTS, THE ASSESSING OFFICER HAS POINTED OUT SPE CIFIC AND SUBSTANTIVE REASONS TO REJECT THE BOOKS OF ACCOUNTS . THE MAIN REASON POINTED OUT BY THE ASSESSING OFFICER IS THAT THE LABOUR - - ITA 1474 OF 2013 10 EXPENSES REGISTER AND THE WAGES REGISTER MAINTAINED BY THE ASSESSEE-COMPANY DO NOT COMPARE AND THERE ARE HUGE DIFFERENCES BETWEEN THE REGISTERS. THIS HAS NOT BE EN RECONCILED BY THE ASSESSEE-COMPANY. IN ADDITION TO THIS GRAVE SITUATION, THE ASSESSEE COULD NOT PRODUCE THE ORIGINAL WORK PLAN A ND THE VOUCHERS ON THE BASIS OF WHICH THE PAYMENTS WERE MA DE BY THE ASSESSEE-COMPANY. 12. IT WAS ALSO NOTICED BY THE ASSESSING AUTHORITY THAT HUGE PAYMENTS WERE MADE BY THE ASSESSEE-COMPANY TO OTHER COMPANIES, FOR WHICH SUBSTANTIAL AMOUNTS WERE WITHD RAWN BY THE ASSESSEE-COMPANY FROM ITS BANK ACCOUNT. THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE-COMPANY HAS NOT FURNISHED ANY DETAILS REGARDING THE UTILIZATION OF THOSE HUGE FUNDS WITHDRAWN FROM THE BANK ACCOUNT AND GIVEN TO CERTAI N COMPANIES. THESE CASH TRANSACTIONS REMAINED UNEXPL AINED. 13. THE ASSESSING OFFICER ALSO OBSERVED THAT THE N ATURE OF LUMP SUM PAYMENTS MADE BY THE ASSESSEE TO CERTAI N COMPANIES LOOKED LIKE THAT THE ASSESSEE HAD ENTERED INTO SUB- - - ITA 1474 OF 2013 11 CONTRACTS WITH OTHER COMPANIES, FOR WHICH SUCH PAYM ENTS WERE MADE. IF THAT WAS THE CASE, IT IS SEEN THAT THE AS SESSEE- COMPANY HAS NOT COMPLIED WITH THE PROVISIONS OF TDS . 14. IT WAS IN THOSE COMPELLING CIRCUMSTANCES THAT THE ASSESSING OFFICER HAD PROPOSED TO REJECT THE ACCOUN TS AND COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT , INVOKING THE POWERS GIVEN TO HIM UNDER SECTION 145(3) OF THE ACT. THE ASSESSING OFFICER ISSUED A NOTICE TO THE ASSESSEE C ALLING FOR ITS OBJECTIONS. BUT, WE FIND THAT THE ASSESSEE-COMPANY DID NOT FILE ANY REPLY TO THE PROPOSAL MADE BY THE ASSESSING OFF ICER. WHEN THE ASSESSEE-COMPANY HAD NO REPLY TO BE PLACED BEFO RE THE ASSESSING OFFICER AGAINST THE PROPOSAL OF REJECTING THE ACCOUNTS, THE ASSESSING OFFICER HAD NO OTHER GO, BUT TO REJEC T THE BOOKS OF ACCOUNTS AND PROCEED TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT. 15. IT IS TO BE PARTICULARLY SEEN THAT THE ASSESSI NG OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNTS ON F LIMSY GROUNDS. HE HAS POINTED OUT VERY PERTINENT REASONS FOR HIS I NABILITY TO RELY - - ITA 1474 OF 2013 12 ON THE BOOKS OF ACCOUNTS PRODUCED BY THE ASSESSEE B EFORE HIM. IT IS ALSO VERY PERTINENT TO NOTE THAT THE LION SHA RE OF THE EXPENDITURE INCURRED BY THE ASSESSEE-COMPANY WAS TO WARDS LABOUR PAYMENTS. IN FACT, THE ASSESSEE HAD CARRIED OUT A WORK CONTRACT OF ` 4,61,90,000/- IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THIS IS NOT A SMALL OR NOMINAL AMOUNT. THIS IS A SUBSTANTIAL AMOUNT, WHICH SHOWED THE MAGNITUDE OF THE WORK CARRIED OUT BY THE ASSESSEE-C OMPANY. STILL, THE ASSESSEE-COMPANY WAS NOT IN A POSITION T O PRODUCE BEFORE THE ASSESSING OFFICER THE BASIC VOUCHERS AND THE OTHER PRIMARY EVIDENCES TO SUPPORT THE ONE AND THE ONLY H UGE EXPENDITURE BY WAY OF LABOUR PAYMENTS. THE ASSESSE E- COMPANY HAS NOT EVEN BOTHERED TO SUBMIT ANY REPLY T O THE ASSESSING OFFICER AGAINST THE PROPOSAL TO REJECT TH E BOOKS OF ACCOUNTS. 16. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF T HE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ASS ESSING OFFICER WAS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND IN PROCEEDING TO COMPLETE THE ASSESSMENT ON THE BASIS OF - - ITA 1474 OF 2013 13 HIS BEST JUDGMENT UNDER SECTION 144 OF THE INCOME-T AX ACT, 1961. 17. NOW, THE QUESTION IS REGARDING THE DETERMINATI ON OF INCOME AT A RATE OF THE GROSS RECEIPTS COLLECTED BY THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSING OFFICER HAS ADOPTED A RATE O F 10 PER CENT OF THE GROSS RECEIPTS. THE COMMISSIONER OF INCOME- TAX(APPEALS) HAS MODIFIED THE SAID RATE TO 2.24 PER CENT. IN ORDER TO REDUCE THE PROFIT RATE TO 2.24 PER CENT, T HE COMMISSIONER OF INCOME-TAX(APPEALS) HAS RELIED ON THE ORDER OF T HE INCOME-TAX APPELLATE TRIBUNAL, DELHI F-BENCH IN THE CASE OF AS SESSEES SISTER CONCERNS LIKE M/S. RUPA PROMOTERS PVT. LTD., M/S.RISHIKESH PROPERTIES PVT. LTD., ETC. THERE ALS O, THOSE COMPANIES HAD EXECUTED SIMILAR LABOUR CONTRACT WORK S FOR DEVELOPING AND LEVELING LAND FOR M/S.PACL INDIA LIM ITED. BUT, ON GOING THROUGH HIS ORDER, WE FIND THAT THE COMMISSIO NER OF INCOME-TAX(APPEALS) HAS MECHANICALLY APPLIED THAT O RDER OF THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH-F TO THE PRESENT CASE. WHAT IS THE EXTENT OF WORK GIVEN BY M/S.PACL INDIA - - ITA 1474 OF 2013 14 LIMITED TO SUCH SISTER CONCERNS IN DELHI IS NOT DIS CUSSED IN HIS ORDER. LEVELLING OF LAND AT DIFFERENT PLACES OF TH E COUNTRY WOULD CALL FOR DIFFERENT QUANTUM OF LABOUR AND OTHER EXPE NSES. THE INVOLVEMENT AND INTENSITY OF LABOUR IN CHENNAI MAY NOT BE THE SAME AS THAT OF THE EFFORTS TAKEN BY THOSE SISTER C ONCERNS IN DELHI. THE RATE OF WAGES ALSO MAY BE DIFFERENT IN DIFFERENT PARTS OF THE COUNTRY. THE COMMISSIONER OF INCOME-TAX(APP EALS) HAS NOT CONSIDERED THE SUBSTANCE OF THE CONTRACTS ENTER ED INTO BY THOSE DELHI FIRMS AND ALSO THE QUANTUM OF WORK CARR IED OUT BY THE ASSESSEE-COMPANY. IN THE ABSENCE OF THESE BASI C AND PRIMARY FACTS, IT IS NOT POSSIBLE TO DRAW A LINE OF SIMILARITY BETWEEN THE WORK CARRIED OUT BY THE ASSESSEE-COMPAN Y IN CHENNAI AND ITS SISTER CONCERNS IN DELHI. 18. SO ALSO IT IS NOT KNOWN AS TO WHAT ARE THE DEF ECTS POINTED OUT BY THE ASSESSING OFFICER IN THE CASES O F THOSE SISTER CONCERNS IN DELHI. AS ALREADY STATED IN THE ABOVE PARAGRAPHS IN THE PRESENT CASE, THE ASSESSING OFFICER HAS POINTED OUT SUBSTANTIVE DEFECTS IN THE WORKING RESULTS PRODUCED BY THE ASSESSEE-COMPANY BEFORE THE ASSESSING OFFICER. THE REFORE, IT IS - - ITA 1474 OF 2013 15 NOT JUSTIFIED ON THE PART OF THE COMMISSIONER OF IN COME- TAX(APPEALS) TO MECHANICALLY ADOPT THE RATE OF 2.24 PER CENT, DETERMINED BY THE INCOME-TAX APPELLATE TRIBUNAL, DE LHI BENCH-F OF THE TRIBUNAL. 19. THE RATE OF 10 PER CENT ADOPTED BY THE ASSESSI NG OFFICER IN THE PRESENT CASE CANNOT BE CONSIDERED TO BE ARBITRARY OR HIGH. THE PRESUMPTIVE RATE OF PROFIT PROVIDED B Y THE INCOME- TAX DEPARTMENT IN THE CASES OF CIVIL CONTRACTS IS 8 PER CENT. IN LABOUR CONTRACTS THE RETURN IS MUCH BETTER THAN CIV IL CONTRACTS AND THE AMOUNT OF RISK IN THE LABOUR CONTRACTS IS VERY NEGLIGIBLE. WHEN COMPARED TO THAT 8 PER CENT APPLICABLE TO CIVI L CONTRACTS ON PRESUMPTIVE BASIS, THE RATE OF 10 PER CENT ADOPTED BY THE ASSESSING OFFICER IN THE PRESENT CASE IS REASONABLE AND JUSTIFIED. THEREFORE, WE SET ASIDE THE ORDER OF THE COMMISSION ER OF INCOME-TAX(APPEALS) AND RESTORE THAT OF THE ASSESSI NG OFFICER. 20. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS ALLOWED. - - ITA 1474 OF 2013 16 ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME O F HEARING ON MONDAY, THE 30 TH OF SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 30 TH SEPTEMBER, 2013. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.