The Income tax Officer, MANSA V. M/s. Telelinks, MANSA

ITA 433/ASR/2013

• Counselvise Citation: 43320914 RSA 2013
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 17-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.433(ASR)/2013 ASSESSMENT YEAR:2008-09 PAN : INCOME TAX OFFICER, VS. M/S. TELELINKS, WARD-1(4), MANSA. ARVIND NAGAR, MANSA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.AMRIK CHAND, DR RESPONDENT BY:NONE DATE OF HEARING:06 /03/2014 DATE OF PRONOUNCEMENT:18/03/2014 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), BATHINDA DATED 12.03.2013 FOR THE ASSESSMENT YEAR 2008-09.THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.12, 67,784/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTIO N 145(3) OF THE ACT AND BY APPLYING NET PROFIT RATE OF 12% TO CONTRACT RECEIPTS. THE LD. CIT(A) ORDERED THE AO TO COMPUTE THE 2 INCOME OF THE ASSESSEE BY APPLYING NET PROFIT OF 6% TO THE GROSS RECEIPTS OF RS.2,11,29,732/-. 2. THAT IT IS PRAYED THAT THE ORDER OF THE LD. CIT( A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OFF OR DISPOSED O FF. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM TH E ORDER OF THE AO AT PAGES 1 TO 4 ARE REPRODUCED FOR THE SAKE OF CONVENI ENCE AS UNDER: 2. THE ASSESSEE IS A CIVIL CONTRACTOR. THE ACCOUNT S OF THE ASSESSEE HAVE DULY BEEN AUDITED AS PER THE PROVISIONS OF SEC TION 44AB OF THE ACT AND AUDIT REPORT IN THE PRESCRIBED FORM NO.3CB AND 3CD DATED 19.09.2008 WAS FILED BY THE ASSESSEE DURING THE COU RSE OF ASSESSMENT PROCEEDINGS. AS PER THE AUDIT REPORT, ACCOUNT BOOKS HAVE BEEN MAINTAINED BY THE ASSESSEE FIRM IN THE FORM OF CASH BOOK AND LEDGER ALONGWITH ALLIED BILLS/VOUCHERS. THE ASSESSEE PRODU CED CASH BOOK AND LEDGER ALONGWITH SOME BILLS WHICH WERE TEST CHECKED . 3. THE ASSESSEE HAS SHOWN TOTAL RECEIPTS AT RS.2,11 ,29,732/- WHICH ARE IN ACCORDANCE WITH THE TDS CERTIFICATES FILED B Y THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 4.1. THE ASSESSEE HAS, INTERALIA, DEBITED THE FOLLO WING HUGE EXPENSES TO THE TRADING/PROFIT & LOSS ACCOUNT: TO MATERIAL 1,15,88,348/- TO LABOUR 63,21,975/- 4.2. THE ASSESSEE WAS ASKED TO PRODUCE THE COMPLETE BOOKS OF ACCOUNT ALONGWITH ALLIED BILLS/VOUCHERS SUPPORTING ITS CLAIMS AS PER THE TRADING/ PROFIT & LOSS ACCOUNT. ONLY CASH BOOK & LEDGER WAS PRODUCED BY THE ASSESSEE. WHEN THE ASSESSEE WAS ASK ED TO PRODUCE BILLS/VOUCHERS TO CORROBORATE ITS CLAIM FOR SUCH HU GE EXPENSES, ALMOST ALL OF WHICH HAVE BEEN MADE IN CASH, IT WAS REPLIED BY THE ASSESSEE THAT AS THESE PAYMENTS WEE MADE TO MIGRATORY LABOUR ERS ON DAY TO DAY BASIS, NO RECORD OF THE SAME HAS BEEN KEPT IN THE FORM OF 3 VOUCHERS. THE ASSESSEE WAS FURTHER ASKED TO PRODUCE MUSTER ROLL FOR THE SAID PAYMENTS IN LIEU OF VOUCHERS AND TO THIS, THE ASSESSEE REPLIED THAT NO SUCH MUSTER ROLL HAS EVER BEEN MAINTAINED F OR SUCH TYPE OF PAYMENTS FOR THE SAME REASON AS STATED ABOVE. THE ASSESSEE WAS FURTHER ASKED TO PRODUCE ANY EVIDENCE, MAY BE IN TH E FORM OF KACHA REGISTER/DAY BOOK BECAUSE IT IS IMPERATIVE THAT THE ASSESSEE PROVES AS TO HOW IT ITSELF KEPT RECORD AS HOW MUCH PAYMENTS H AD BEEN MADE TO THE LABOURERS ON DIFFERENT DATES WHICH WOULD ULTIMA TELY BE CONSOLIDATED INTO THE FINAL ACCOUNTS/STATEMENTS. TH E ASSESSEE HAD NO REPLY TO THIS QUERY AND HE MERELY SAID THAT IT IS C OMMON PRACTICE AMONGST THE CONTRACTORS NOT TO MAINTAIN ANY SUCH RE CORDS OF PAYMENTS AND THEREFORE, THE EXPENSES CLAIMED MAY BE ACCEPTED AS SUCH. 4.3. THE REPLY OF THE ASSESSEE IS NOT TENABLE AT AL L BECAUSE THE ASSESSEE IS A REGULAR INCOME TAX PAYER WHO HAS BEEN IN THE BUSINESS OF CONTRACTORSHIP FOR MANY YEARS. THEREFORE, IT HAS TO REGULARLY MAINTAIN ITS BOOKS OF ACCOUNT THROUGHOUT THE YEAR U /S 44AA OF THE ACT SO AS TO FILE THE CORRECT FIGURES OF ITS PROFIT/LOS S AT THE END OF THE YEAR IN ITS RETURN OF INCOME. SINCE TDS CERTIFICATES ARE ISSUED BY THE TDS DEDUCTOR WHICH QUANTIFY AND CERTIFY THE GROSS RECEI PTS EARNED BY THE ASSESSEE, IT IS THE AMOUNT OF EXPENSES WHICH FINALL Y DECIDE THE AMOUNT OF PROFIT OR LOSS OF THE ASSESSEE DURING A PARTICUL AR FINANCIAL YEAR. THEREFORE, THEY HAVE TO BE METICULOUSLY KEPT TRACT OF, BY THE ASSESSEE IN ORDER TO (I) ESTIMATE ITS OWN PROFIT/LOSS FOR IT S OWN KNOWLEDGE, AND (II) TO GIVE THE GOVT. ITS DUE SHARE OF TAXES ON IT S TRUE PROFIT. ANY TRUE BUSINESSMAN WOULD THEREFORE, CONSCIOUSLY KEEP TRACK OF EVEN A SINGLE RUPEE SPENT ON THE BUSINESS UNDER THESE NARRATED FA CTS, IT CANNOT BE IMAGINED THAT A PERSON WOULD HAVE SUCH A HUGE QUANT UM OF EXPENSES UNMONITORED AND ONLY MAKE AN ESTIMATE OF IT IN THE END. ALSO, EVEN IF THE ASSESSEE ESTIMATES HIS EXPENSES AT THE END OF T HE YEAR, HOW CAN HE DO IT IN THE ABSENCE OF ANY ROUGH/KACHA RECORD OF D AY TO DAY EXPENSES INCURRED. IT MEANS THAT IF AN ASSESSEE IS INDULGING IN SUCH PRACTICE, IT CAN BE SAFELY CONCLUDED THAT HE IS DELIBERATELY INF LATING THE EXPENSES BY ESTIMATING OVER AND ABOVE THE ACTUALLY INCURRED EXPENSES IN ORDER TO REDUCE THE PROFIT MARGIN, THEREBY DECREASING HIS TAX LIABILITY . ALSO, IF THE EXPENSES HAVE BEEN ACTUALLY ARRIVED AT BY AN ESTIMATE FOR WHICH THERE IS NO BASIS, IT MEANS THAT A MAJOR PROP ORTION OF THE 4 ACCOUNTS OF THE ASSESSEE ARE ONLY GUESS WORK AND HE NCE ARBITRARY AND THEREFORE, DO NOT PRESENT A TRUE PICTURE OF ITS INC OME. IN THE ABSENCE OF COMPLETE BILLS/VOUCHERS, THE GENU INENESS OF THE ABOVE SAID HUGE EXPENSES DEBITED TO THE TRADING/PRO FIT & LOSS ACCOUNT COULD NOT BE SUBJECTED TO VERIFICATION. 5. OUT OF THE TOTAL RECEIPTS SHOWN AT RS.2,11,29,73 2/-, THE EXPENSES HAVE BEEN DEBITED AT RS.2,00,69,529/- WHIC H WORKS OUT TO 95% OF THE RECEIPTS. BESIDES, AMOUNTS OF RS.1,80,00 0/- & RS.2,5,263/- HAVE BEEN DEBITED ON ACCOUNT OF SALARY TO PARTNERS AND INTEREST TO PARTNERS CAPITAL RESPECTIVELY. THE ASSESSEE HAS THU S SHOWN THE NET PROFIT JUST AT RS.6,24,940/- AND THE N.P. RATE WORK S OUT TO 2.96%. IN THE ABSENCE OF BILLS/VOUCHERS, THE HEAVY EXPENSES D EBITED AS WELL AS OTHER PARTICULARS SHOWN IN THE RETURN, ARE BEYOND V ERIFICATION. 6.1. IN VIEW OF THE ABOVE DISCUSSION, INCOME SHOWN BY THE ASSESSEE CANNOT BE SUBJECTED TO VERIFICATION AND IT IS IMPOS SIBLE TO ASCERTAIN THE CORRECT PROFIT DERIVED BY THE ASSESSEE. IN SUCH CIRCUMSTANCES, THE BOOKS OF ACCOUNT PRODUCED BY THE ASSESSEE CANNOT BE RELIED UPON BECAUSE TRUE PROFITS CANNOT BE DEDUCED FROM THE SAM E. AS SUCH, THE CORRECTNESS AND COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE ARE NOT UPTO MY SATISFACTION. I AM, THEREFORE, LEFT WITH N O ALTERNATIVE BUT TO APPLY THE PROVISIONS OF SECTION 145(3) OF THE ACT. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE REJECTED AND NET PROFIT RATE IS TO BE APPLIED ON RECEIPTS TO WORK OUT THE INCOME OF THE A SSESSEE. 6.2. THE ISSUE OF ESTIMATION OF N.P. RATE IN THE CA SE OF CIVIL CONTRACTORS HAS BEEN CONSIDERED BY THE HONBLE P & H HIGH COURT, CHANDIGARH AS WELL AS THE HONBLE ITAT, CHANDIGARH BENCH IN A NUMBER OF CASES OF CONTRACTORS. IN THE CASE OF M/S. PRABHAT KUMAR CONTRACTOR, SIRSA VS. ACIT DECIDED VIDE ORDER IN IT A NO.323/CHAND/2005 DATED 25.05.2007, THE ITAT HAS AP PLIED NET PROFIT RATE OF 12% OF THE CONTRACT RECEIPTS OF THE ASSESSE E AND THE SAME HAS BEEN UPHELD BY THE HONBLE PUNJAB & HARYANA HIGH CO URT, CHANDIGARH. IN AN ANOTHER CASE NAMELY M/S. ESS ESS BUILDERS (P) LTD. LUDHIANA VS. ACIT DECIDED VIDE ORDER IN ITA NO.707/ CHANDI/1997 DATED 16.09.2003, THE ITAT HAS ORDERED APPLICATION OF NP RATE OF 12% TO CONTRACT RECEIPTS AND HAS AGREED WITH THE DE CISION OF THE LD. 5 CIT(A) WHEREIN THE LD. CIT(A) HAS APPLIED A RATE OF 12% AS AGAINST 16% APPLIED BY THE A.O. 6.3. IT IS, THEREFORE, THE BEST COURSE THAT ATLEAST THE NET PROFIT RATE OF 12% TO THE GROSS RECEIPTS OF THE ASSESSEE MAY BE AP PLIED TO WORK OUT THE TAXABLE INCOME OF THE ASSESSEE WHICH, HOWEVER, IS TO BE REDUCED BY STATUTORY PAYMENTS OF SALARY TO PARTNERS AND INT EREST TO PARTNERS CAPITA AS PER THE PARTNERSHIP DEED AND DEPRECIATI ON ALLOWABLE AS PER ACT. THE NET PROFIT RATE BEING APPLIED IS AFTER TAKING INTO ACCOUNT ALL THE OTHER EXPENSES. KEEPING IN VIEW THIS YARDST ICK, INCOME OF THE ASSESSEE IS WORKED OUT AS UNDER: TOTAL RECEIPTS OF THE ASSESSEE. 2,11,29,732/- 12% OF THE ABOVE RECEIPTS 25,35,568/- LESS: SALARY TO PARTNERS 1,80,000/- INTEREST TO PARTNERS 2,55,263/- DEPRECIATION ALLOWABLE 12,854/- 4,48,117/- BALANCE: 20,87,451/- R.O. 20,87,450/- 3. BEFORE THE LD. CIT(A), THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE HAS PRODUCED CASH BOOK AND LEDGER BEFO RE THE A.O. AND NO DEFECT HAS BEEN POINTED OUT AND THE A.O. HAS REJECT ED THE BOOKS OF ACCOUNT FOR WANT OF MUSTER ROLL IN SUPPORT OF PAYMENTS MADE TO LABOURERS. THE LD. COUNSEL FOR THE ASSESSEE APPEARING BEFORE THE LD. CIT(A) HAS RELIED UPON THE DECISION OF THE ITAT, AMRITSAR BENCH, AMRITSAR IN T HE CASE OF DEEPAK GUPTA PROP. ENGINEERS & CONSTRUCTION, BATHINDA, WH ERE NET PROFIT RATE OF 4% TO 4.5% HAD BEEN APPLIED. THE LD. COUNSEL BEFORE THE LD. CIT(A) PRODUCED THE GIST OF THE CASES RELIED UPON BY THE A .O. 6 4. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DIRECTED THE A.O. TO APPLY NET PROFIT RATE OF 6% A ND ALLOW THEREAFTER SALARY, INTEREST TO THE PARTNERS AND DEPRECIATION. THE RELE VANT FINDINGS OF THE LD. CIT(A) ARE REPRODUCED FOR THE SAKE OF CONVENIENCE A S UNDER: 1.I) THE AO HAS APPLIED NET PROFIT RATE OF 12% BY R ELYING ON THE FOLLOWING JUDGMENTS: A) PRABHAT KUMAR CONTRACTOR (323 ITR 675 ) ( P& H) B) JAIN CONSTRUCTION CO. (245 ITR 527 (RAJ) C) CIT VS. SHIVAM CONSTRUCTION CO. ITA NO.167 OF 2007 OF PUNJAB & HARYANA HIGH COURT. D) ACIT VS. ESS ESS BUILDERS (P) LTD. ITA NO.707/CHD/1 997 ORDER DATED SEPTEMBER 16, 2003. II) THE A/R OF THE APPELLANT HAS STATED IN THE WRITTEN SUBMISSIONS THAT THE ABOVE SAID JUDGMENTS WERE NOT CONFRONTED T O THEM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE CO PIES OF THE JUDGMENTS HAS BEEN PLACED ON RECORD ALONGWITH THE DISTINGUISHABLE FACTS OF THESE CASES. III) THE A/R OF THE APPELLANT HAS RELIED ON THE JUDGMENT OF HONBLE ITAT, AMRITSAR BENCH, AMRITSAR IN THE CASE OF BATHI DNA TRUCK OPERATOR UNION,BATHINDA VS. ITO IN WHICH THE HONBL E ITAT WHILE RELYING ON THE JUDGMENT OF PRIVY COUNCIL (DI SCUSSED SUPRA) HELD THAT EVEN IF THE BOOK RESULTS ARE REJEC TED , THE AO IS DUTY BOUND TO MAKE A FAIR AND REASONABLE ESTIMATE O F INCOME ON THE BASIS OF PAST HISTORY OR COMPARATIVE CASES. THE ABOVE SAID JUDGMENTS HAVE BEEN FOLLOWED BY THE HOBLE BEN CH IN THE CASE OF M/S. VIJAY ROADWAYS, BATHINDA. IV) THE COMPARATIVE CHART OF GP/NP/NP RATIO HAS ALSO BE EN PLACED ON RECORD. THE NP RATIO ( NET PROFIT INCLUDING PA RTNERS SALARY & INTEREST) HAS COME DOWN TO 5.02% IN A.Y. 2008-09 AS COMPARED TO 5.58% IN A.Y. 2007-08. V) THE COMPARATIVE CHART OF LABOUR EXPENSES HAS ALSO B EEN PLACED ON RECORD FROM WHICH IT TRANSPIRES THAT THE LABOUR EXPENSES HAS COME DOWN TO 29.92% OF THE GROSS RECEIPTS IN A.Y. 2008-09 AS COMPARED TO 30.28% IN A.Y. 2007-08. 7 VI) THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR HAS HELD NET PROFIT RATE FROM 4% TO 4.5% AS REASONABLE IN THE CA SE OF CIVIL CONTRACTORS. THE COPY OF THE ORDER OF THE HONBLE B ENCH IN THE CASE OF DEEPAK GUPTA PROP. ENGINEERS & CONSTRUCTION , BATHINDA HAS BEEN PLACED ON RECORD. 2. IN VIEW OF THE ABOVE STATED FACTS AND LAW, I AM CONVINCED WITH THE ARGUMENTS OF THE A/R OF THE APPELLANT THAT THE NET PROFIT RATE OF 12% APPLIED BY THE AO IS EXCESSIVE BECAUSE THE JUD GMENTS RELIED UPON THE AO ARE DISTINGUISHABLE ON FACTS. THE ONLY ISSUE IN THIS CASE IS THAT WHAT NET PROFIT RATE SHOULD BE APPLIED FOR DET ERMINING THE INCOME OF THE APPELLANT. I FIND THAT THE JURISDICTIONAL IT AT HAS APPLIED NET PROFIT RATE OF 4% TO 4.5% IN THE CASE OF CIVIL CONT RACTORS FILING RETURN OF INCOME IN INDIVIDUAL STATUS. BUT THE APPELLANT IS A PARTNERSHIP FIRM AND IT IS SETTLED LAW THAT THE FIRM SHALL BE ENTITL ED TO PARTNERS SALARY AND INTEREST EVEN IF NET PROFIT RATE IS APPLIED AND THE AO HAS FOLLOWED THIS SETTLED LAW WHILE DETERMINING THE INCOME OF TH E APPELLANT AS THE AO HAS ALREADY ALLOWED PARTNERS SALARY AND INTEREST AFTER APPLYING THE NET PROFIT RATE OF 12%. IN MY OPINION, 6% NET P ROFIT RATE SHALL BE REASONABLE. HENCE, I DIRECT THE AO TO COMPUTE THE INCOME OF THE APPELLANT BY APPLYING NET PROFIT RATE OF 6% TO THE GROSS RECEIPTS OF RS.21129732/- (AS MENTIONED IN PARA 3 ON PAGE 1 OF THE ASSESSMENT ORDER), ALLOW SALARY, INTEREST TO THE PARTNERS AND DEPRECIATION. THE GROUND OF APPEAL IS ALLOWED. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE COMPANY AND THEREFORE, WE ARE PROCEEDING TO DECIDE THE APPEAL AFTER HEARING T HE LD. DR AND ON PERUSAL OF MATERIAL AVAILABLE ON RECORD. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. AT THE OUTSET, ON PERUSAL OF RECORD, WE FIN D THAT THERE IS NO APPEAL OF THE ASSESSEE BEFORE US AGAINST THE ORDER OF THE LD. CIT(A). THE LD. COUNSEL FOR THE ASSESSEE IN HIS WRITTEN SUBMISSIONS BEFORE THE LD. CIT(A) HAS MENTIONED THAT HE HAS PRODUCED CASH BOOK AND LEDGER AND NO DEFECT IN THE 8 SAME HAS BEEN POINTED OUT AND THE AO HAS REJECTED T HE BOOKS OF ACCOUNT FOR WANT OF MUSTER ROLL IN SUPPORT OF PAYMENTS MADE TO THE LABOURERS, WHEREAS THE FACTS AS PER AOS ORDER REPRODUCED HEREINABOVE THAT THE ASSESSEE PRODUCED THE CASH BOOK AND LEDGER BUT WITHOUT ANY S UPPORTING BILLS AND VOUCHERS TO CORROBORATE WHAT HAS BEEN RECORDED IN THE CASH BOOK AND LEDGER. THE ASSESSEES REPLY TO THE PRODUCTION OF B ILLS AND VOUCHERS WAS THAT IT IS A COMMON PRACTICE AMONGST THE CONTRACTORS NOT TO MAINTAIN ANY BOOKS O F ACCOUNT. THEREFORE, THE EXPENSES CLAIMED MAY BE ACC EPTED AS SUCH. ACCORDINGLY, THE SUBMISSION OF THE ASSESSEE BEFORE THE LD. CIT(A) IS PERVERSE TO THE FACTS AND CONTRADICTORY WHAT HAS B EEN STATED BEFORE THE AO AND THAT OF THE LD. CIT(A). THE FACT IS THAT THE AS SESSEE HAS NOT PRODUCED CORROBORATIVE EVIDENCE IN THE FORM OF BILLS AND VOU CHERS TO CORROBORATE THE CLAIMS AND EXPENSES OF THE AMOUNT OF RS.1,15,88,34 8/- AND PAYMENTS TO LABOUR AMOUNTING TO RS.63,21,975/-. ACCORDINGLY, IT WAS NOT POSSIBLE FOR THE A.O. TO DEDUCE ACCURATE INCOME, AS CLAIMED IN THE C ASH BOOK AND LEDGER MAINTAINED BY THE ASSESSEE. ACCORDINGLY, THE AO HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT BY APPLYING THE PROVISIONS OF SECT ION 145(3) OF THE ACT AND THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6.1. THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED UP ON THE DECISION OF THE ITAT, AMRITSAR BENCH WHERE NET PROFIT RATE OF 4% T O 4.5% HAS BEEN APPLIED 9 BUT NOWHERE THE LD. COUNSEL FOR THE ASSESSEE HAS PL ACED ON RECORD IDENTICAL SITUATION TO THE FACTS AND CIRCUMSTANCES OF THE PRE SENT CASES. THE LD. COUNSEL BEFORE THE LD. CIT(A) HAS ALSO NOT PLACED ON RECORD WHERE THE FACTS OF THE PRECEDING YEAR IN ASSESSEES OWN CASE ARE IDENTICAL TO THE FACTS OF THE PRESENT CASE. THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE L D. CIT(A) HAS PLACED THE GIST OF THE CASES RELIED UPON BY THE A.O. BUT NONE OF THE CASE LAWS HAS BEEN DISTINGUISHED FROM THE FACTS OF THE PRESENT CASE. T HE LD. CIT(A) HAS REFERRED THAT THE JUDGMENTS RELIED UPON ARE DISTINGUISHABLE ON THE FACTS BUT HOW THE SAME ARE DISTINGUISHABLE HAS NOT BEEN PLACED ON REC ORD BY THE LD. CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE PLACES A COMPAR ATIVE CHART OF LABOUR EXPENSES, GROSS PROFIT AND NET PROFIT RATIO IN ASSE SSEES OWN CASE BUT THE SAME WERE NOT CONFRONTED TO THE A.O. BY THE LD. CIT (A). ACCEPTANCE OF SUCH RECORD OF THE ASSESSEE BY LD. CIT(A) IS NOT JUSTIFI ED WITHOUT CONFRONTING TO THE A.O. THE AO HAS REFERRED TO THE DECISION OF TH E TRIBUNAL WHERE NET PROFIT RATE OF 4% TO 4.5% HAS BEEN APPLIED BUT HAS NOT REFERRED HOW THOSE CASES CAN BE MADE APPLICABLE IN THE PRESENT FACTS A ND CIRCUMSTANCES OF THE CASE. ABOVE ALL, THE LD. CIT(A) HAS NOT DISTINGUISH ED THE DECISION RELIED UPON BY THE AO IN THE CASES OF PRABHAT KUMAR CONTR ACTOR ( 323 ITR 675 (P&H), JAIN CONSTRUCTION NO. 245 ITR 527 (RAJ.), CI T VS. SHIVAM CONSTRUCTION CO. IN ITA NO. 167 OF 2007 (P&H) AND A CIT VS. ESS ESS 10 BUILDERS (P) LTD. DATED 16 TH SEPT., 2003 DECIDED BY THE ITAT, CHANDIGARH BENCH. ACCORDINGLY, THE LD. CIT(A) IS NOT JUSTIFIED IN VARYING OR MODIFYING THE NET PROFIT RATE APPLIED BY THE AO. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS DIRECTED TO REVERSED AND THE ORDER OF THE A.O. IS RESTORED. THUS, ALL THE GROUNDS OF THE REVENUE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.433(ASR)/2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH MARCH, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18TH MARCH, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. TELELINKS, MANSA. 2. THE ITO WARD 1(4), MANSA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR