THE ACIT, CIRCLE - 2(1), Vijayawada V. Sai Lakshmi Constructions & Co, Vijayawada

ITA 523/VIZ/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0997 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 29-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M N MURTHY NAIKDR
• Section: 142(1)

Judgement Text

ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.523/VIZAG/2014 ( / ASSESSMENT YEAR: 2011-12) ACIT, CIRCLE - 2(1), VIJAYAWADA VS. SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA [PAN: AAOFS 7183E ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHY NAIK,DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 11.07.2016 / DATE OF PRONOUNCEMENT : 22.07.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), VIJAYAWADA DATED 30.7.2014 AND IT PERTAINS TO THE ASSESSMENT YEAR 2011-12. ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM, WHICH IS ENGAGED IN THE BUSINESS OF CIVIL CON TRACTS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 23.9.2011 DECLARING TOTAL INCOME OF ` 7,70,76,240/-. THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, NOTICES U/S 143(2) & 142(1) OF THE INC OME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') WERE ISSUED. IN RESPONSE TO NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FURNISHED BOOKS OF ACCOUNTS AND OTHER RELEVANT DETAILS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O. NOTICED THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE ARE NO T SUSCEPTIBLE FOR VERIFICATION AND ALSO THE ASSESSEE HAS NOT PRODUCED SUPPORTING BILLS & VOUCHERS IN RESPECT OF VARIOUS EXPENDITURES. THE A. O. FURTHER OBSERVED THAT THERE ARE NUMBER OF INCONSISTENCIES IN THE BOO KS OF ACCOUNTS, THEREFORE, ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE BOOKS OF ACCOUNTS SHALL NOT BE REJECTED UNDER THE P ROVISIONS OF SECTION 145(3) OF THE ACT AND NET PROFIT FROM THE BUSINESS BE ESTIMATED. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE SUBMITT ED THAT IT HAS EXECUTED WORKS CONTRACTS IN INTERIOR PLACES AND FOR ESTS, THEREFORE, THE EXPENDITURE INCURRED UNDER THE HEAD LABOUR EXPENSES , WORKS EXPENSES AND OTHERS ARE SUPPORTED BY SELF-MADE VOUCHERS. HOW EVER, IN RESPECT OF ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 3 OTHER INCONSISTENCIES, THE ASSESSEE HAS RECONCILED THE INCONSISTENCIES POINTED OUT BY THE A.O. 3. THE A.O. AFTER CONSIDERING THE EXPLANATIONS FURN ISHED BY THE ASSESSEE, OBSERVED THAT MOST OF THE EXPENDITURE INC URRED BY THE ASSESSEE ARE IN THE FORM OF CASH AND ARE NOT DULY S UPPORTED BY BILLS, WHICH MAKES THE BOOKS MORE UNVERIFIABLE. THE A.O. F URTHER OBSERVED THAT OUT OF THE TOTAL EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT, THE QUANTUM OF SELF-MADE DEFECTIVE VOUCHERS ARE TO THE EXTENT OF RS.35,11,91,497/- WHICH WORKS OUT TO 31.08% OF TOTA L EXPENDITURE CLAIMED BY THE ASSESSEE. THE A.O. FURTHER OBSERVED THAT MOST OF THE EXPENDITURE INCURRED BY THE ASSESSEE IS SUPPORTED B Y SELF-MADE VOUCHERS AND HENCE THE ONLY OPTION AVAILABLE IS TO ARRIVE AT THE TAXABLE INCOME ON ESTIMATE BASIS. WITH THESE OBSERVATIONS, REJECTED BOOKS OF ACCOUNTS UNDER THE PROVISIONS OF SECTION 145(3) OF THE ACT AND ESTIMATED NET PROFIT OF 12.5% ON DIRECT WORKS CONTRACTS, 8% N ET PROFIT ON SUB CONTRACT WORKS EXECUTED BY THE ASSESSEE AND 5% NET PROFIT ON SUB CONTRACTS GIVEN TO OTHERS. WHILE DOING SO, RELIED UP ON THE DECISION OF JURISDICTIONAL ITAT, IN THE CASE OF M/S. KNR CONSTR UCTIONS LTD., M/S. SUGUNA CONSTRUCTIONS AND M/S. TEJA CONSTRUCTIONS VS . ACIT. BESIDES, THE A.O. MADE SEPARATE ADDITIONS TOWARDS INCOME FRO M OTHER SOURCES ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 4 BEING INTEREST ON FIXED DEPOSITS AND OTHER INCOME, HOWEVER, ALLOWED DEDUCTIONS TOWARDS INTEREST ON CAPITAL AND REMUNERA TION TO PARTNERS UNDER THE PROVISIONS OF SECTION 40(B) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE HAS MADE ELABORATE WRITTEN SUBMISSIONS AND CONTENDED THAT TH E ASSESSING OFFICER IS ERRED IN REJECTING THE BOOKS OF ACCOUNTS BY INVO KING THE PROVISIONS OF SECTION 145(3) OF THE ACT, EVEN AFTER VERIFYING THE BOOKS OF ACCOUNTS, BILLS, VOUCHERS, SUB CONTRACT AGREEMENTS AND OTHER RELEVANT INFORMATION, FOR THE REASON THAT THE EXPENSES RELATING TO LABOUR , CURING LABOUR EXPENSES, EARTH WORK EXPENSES, MASONARY EXPENSES, R OAD BENDING EXPENSES, AND SCAFFOLDING EXPENSES ARE SUPPORTED BY SELF-MADE VOUCHERS. THE ASSESSEE FURTHER SUBMITTED THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, IT HAS RECONCILED THE ERROR S POINTED OUT BY THE A.O. AND ALSO SUBMITTED BILLS & VOUCHERS IN RESPECT OF MOST OF THE EXPENDITURE, EXCEPT FEW EXPENSES UNDER THE HEAD LA BOUR AND OTHER LIKE CHARGES. THE LABOUR AND OTHER LIKE CHARGES ARE IN CURRED MAINLY IN CASH, BECAUSE IT HAS EXECUTED WORKS CONTRACT IN REMOTE FO REST PLACES, WHERE IT HAS HIRED LABOUR ON DAILY BASIS BY MAKING CASH PAYM ENT. UNLESS CASH ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 5 PAYMENT IS MADE ON DAILY BASIS, IT IS VERY DIFFICUL T TO GET THE REQUIRED LABOURERS SO AS TO COMPLETE THE JOB. 5. THE ASSESSEE FURTHER SUBMITTED THAT THE A.O. IS ERRED IN ESTIMATING NET PROFIT OF 12.5% ON DIRECT WORKS CONTRACTS, 8% O N SUB CONTRACTS AND 5% ON SUB CONTRACTS GIVEN TO THIRD PARTIES. THE NET PROFIT ESTIMATED BY THE A.O. IS QUITE HIGH WHEN COMPARED TO NATURE OF W ORKS CONTRACT AND PLACE OF WORKS. IT WAS FURTHER SUBMITTED THAT IT HA S EXECUTED WORKS IN REMOTE PLACES AND FORESTS, WHERE THE EXPENDITURE IS QUITE HIGH. THE ASSESSEE HAS INCURRED MORE EXPENDITURE TOWARDS LABO UR AND OTHER LIKE CHARGES BECAUSE OF PECULIAR NATURE OF WORKS CONTRAC TS. THEREFORE, THE A.O. WAS NOT CORRECT IN RELIED UPON JUDGEMENT OF M/ S. KNR CONSTRUCTIONS TO ESTIMATE THE NET PROFIT OF 12.5%, 8% & 5% RESPECTIVELY ON MAIN CONTRACTS, SUB CONTRACTS AND SUB CONTRACTS GIVEN TO THIRD PARTIES WITHOUT APPRECIATING THE FACT THAT ITS CASE STANDS IN DIFFERENT FOOTING. THE ASSESSEE FURTHER SUBMITTED THAT WHILE ESTIMATIN G THE NET PROFIT, THE A.O. SHOULD HAVE CONSIDER THE COMPARABLE CASES WHIC H ARE PERFORMING SIMILAR FUNCTIONS AND ALSO HAVING SAME RISK FACTORS . THE ASSESSEE FURTHER SUBMITTED THAT THE JURISDICTIONAL ITAT, HYDERABAD I N THE CASE OF SHRI EASWAR REDDY AND COMPANY VS. ACIT HAS UPHELD THE ES TIMATION OF NET PROFIT OF 8% FOR MAIN CONTRACT AND 5% FOR SUB CONTR ACTS, THEREFORE, THE ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 6 A.O. WAS ERRED IN ESTIMATING NET PROFIT OF 12.5% & 8% WITHOUT ANY BASIS. 6. THE CIT(A) AFTER CONSIDERING THE EXPLANATIONS FU RNISHED BY THE ASSESSEE, HELD THAT THE A.O. RELIED UPON THE CASE L AWS IN WHICH ADOPTION OF NET PROFIT RATES OF 12.5% & 8% WAS APPROVED, WHE REAS THE ASSESSEE RELIED UPON CASE LAWS WHEREIN THE PROFIT WAS HELD T O BE ESTIMATED AT 8% AND 6% ON MAIN CONTRACTS AND SUB CONTRACTS RESPECTI VELY. THE POINT TO BE NOTED HERE IS THAT AS TO WHAT IS THE APPROPRIATE PROFIT DEPENDS ON FACTS AND CIRCUMSTANCES OF EACH CASE AND THERE IS N O HARD AND FAST RULES TO BE APPLIED ON UNIVERSAL BASIS. IN THE CIRCUMSTAN CES, HAVING REGARD TO FACTS AND CIRCUMSTANCES OF THE CASE AND THE JUDICIA L OPINION PREVALENT, DIRECTED THE A.O. TO ESTIMATE A NET PROFIT OF 8% FO R MAIN CONTRACTS AND 6% FOR SUB CONTRACTS. HOWEVER, THE CIT(A) UPHELD T HE ESTIMATION OF NET PROFIT OF 5% ON SUB CONTRACTS GIVEN TO OTHERS. AGG RIEVED BY THE CIT(A) ORDER, THE REVENUE IS IN APPEAL BEFORE US. 7. THE LD. D.R. SUBMITTED THAT THE LD. CIT(A) WAS E RRED IN SCALED DOWN THE NET PROFIT ESTIMATED BY THE A.O. FROM 12.5 % TO 8% IN RESPECT OF DIRECT WORKS, 8% TO 6% IN RESPECT OF SUB CONTRAC T WORKS WITHOUT APPRECIATING THE FACT THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE NOT SUSCEPTIBLE FOR VERIFICATION. THE D.R. FURTHER SUBM ITTED THAT THE ASSESSEE ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 7 HAS FAILED TO FURNISH SUPPORTING BILLS & VOUCHERS F OR EXPENDITURE CLAIMED UNDER THE HEAD LABOUR AND LIKE CHARGES. MOST OF TH E EXPENDITURES INCURRED BY THE ASSESSEE ARE SUPPORTED BY SELF MADE VOUCHERS. THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE ARE IN CONSISTENT WITH THE FINANCIAL STATEMENT FURNISHED ALONG WITH THE RETURN OF INCOME. UNDER THESE CIRCUMSTANCES, THE A.O. RIGHTLY ESTIMATED NET PROFIT OF 12.5% & 8% IN RESPECT OF DIRECT WORKS CONTRACTS & SUB CONTR ACTS. THE D.R. FURTHER SUBMITTED THAT THE CIT(A) FAILED TO APPRECI ATE THE FACT THAT THE ASSESSEE ITSELF ADMITTED INCOME FROM THE CONTRACT I T AWARDED TO ITS SUB CONTRACTORS @ 9.71%. THE D.R. FURTHER ARGUED THAT THE ASSESSEE HAS ADMITTED AN INCOME OF RS.7,70,76,240/-, WHEREAS THE INCOME DETERMINED BY THE CIT(A) IS AT RS.6,81,79,734/- WHI CH IS BELOW THE ADMITTED INCOME. UNDER ANY CIRCUMSTANCES, THE INCOM E ASSESSED SHALL NOT GO BEYOND INCOME ADMITTED BY THE ASSESSEE. THE REFORE, THE CIT(A) WAS COMPLETELY ERRED IN SCALED DOWN THE ESTIMATION OF NET PROFIT FROM 12.5% TO 8% AND 8% TO 6% IN RESPECT OF DIRECT WORKS CONTRACT AND SUB CONTRACTS, ACCORDINGLY, REQUESTED TO UPHELD ASSESSM ENT ORDER. 8. ON THE OTHER HAND, THE LD. A.R. FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF CIT(A). THE LD. A.R. FURTHE R SUBMITTED THAT ONE OF THE GROUND RAISED BY THE REVENUE IS THAT THE ASS ESSED INCOME AFTER ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 8 GIVING EFFECT TO FINDINGS OF THE CIT(A) GOES BEYOND THE RETURNED INCOME. BUT, THE FACT IS THAT WHILE GIVING EFFECT TO CIT(A) ORDER, THE ASSESSING OFFICER HAS RESTRICTED RELIEF GIVEN BY CIT(A) TO IN COME DECLARED IN THE RETURN, WHICH WAS NOT CHALLENGED BY THE ASSESSEE, T HEREFORE, REQUESTED TO UPHOLD THE CIT(A) ORDER. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. IN THIS CASE, THE ASSESSING OFFICER REJECTED BOOKS OF ACCOU NTS UNDER THE PROVISIONS OF SECTION 145(3) OF THE ACT AND ESTIMAT ED NET PROFIT FROM CONTRACT RECEIPTS. THE A.O. WAS OF THE OPINION THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE ARE NOT SUSCEPT IBLE FOR VERIFICATION. THE A.O. HAS BROUGHT OUT NUMBER OF INCONSISTENCIES IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THE A.O. FURTH ER WAS OF THE OPINION THAT THE ASSESSEE HAS FAILED TO PROVE THE E XPENDITURES WITH SUPPORTING BILLS AND VOUCHERS. MOST OF THE EXPENDIT URES DEBITED UNDER THE HEAD LABOUR AND LIKE CHARGES ARE SUPPORTED BY S ELF MADE VOUCHERS. UNDER THESE CIRCUMSTANCES, IT IS VERY DIFFICULT TO COMPUTE THE INCOME BASED ON THE BOOKS OF ACCOUNTS FURNISHED BY THE ASS ESSEE. THE A.O. FURTHER OBSERVED THAT THE NET PROFIT DECLARED BY TH E ASSESSEE IS QUITE LESS WHEN COMPARED TO THE NATURE AND SIZE OF WORKS CONTRACT ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 9 UNDERTAKEN BY THE ASSESSEE. THE A.O. FURTHER OBSERV ED THAT THE ASSESSEE IS A BIG CONTRACTOR HAVING LARGE TURNOVER IS EXPECTED TO MAINTAIN BOOKS OF ACCOUNTS, HOWEVER, THE ASSESSEES BOOKS OF ACCOUNTS ARE NOT SUSCEPTIBLE FOR VERIFICATION, THEREFORE, OP INED THAT THE NET PROFIT FROM THE BUSINESS CAN BE COMPUTED ON ESTIMATION BAS IS. THE A.O. ESTIMATED NET PROFIT OF 12.5% ON DIRECT WORKS CONTR ACTS AND 8% ON SUB CONTRACT WORKS. THE A.O. HAS TAKEN A CLUE FROM THE DECISION OF JURISDICTIONAL ITAT, IN THE CASE OF M/S. KNR CONSTR UCTIONS LTD., WHEREIN THE ESTIMATION OF NET PROFIT OF 12.5% & 8% WAS UPHE LD. IT IS THE CONTENTION OF THE ASSESSEE THAT THE NET PROFIT ESTI MATED BY THE A.O. IS QUITE HIGH WHEN COMPARED TO THE NATURE AND PLACE OF WORKS CONTRACT EXECUTED. THE ASSESSEE FURTHER CONTENDED THAT IT HA S EXECUTED WORKS CONTRACT IN REMOTE PLACES AND FOREST, WHERE EXPENDI TURE IS QUITE HIGH, THEREFORE, THE A.O. WAS NOT CORRECT IN ADOPTING A N ET PROFIT OF 12.5% & 8% BY RELIED UPON THE DECISION OF M/S. KNR CONSTRUC TIONS PVT. LTD. 10. WE FIND THAT WHILE ESTIMATING THE NET PROFIT OF 12.5% ON DIRECT WORKS AND 8% ON SUB CONTRACT WORKS, THE A.O. HAS RE LIED UPON THE DECISION OF ITAT IN THE CASE OF M/S. KNR CONSTRUCTI ONS LTD. ON THE OTHER HAND, THE ASSESSEE HAS RELIED UPON THE DECISION OF ITAT, IN THE CASE OF SHRI EASWAR REDDY & COMPANY VS. ACIT WHEREIN 8% AND 5% NET PROFIT ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 10 WAS UPHELD. IT IS AN ADMITTED FACT THAT ESTIMATION OF NET PROFIT FROM CIVIL CONSTRUCTION BUSINESS IS CONSISTENTLY FOLLOWED BY T HE DEPARTMENT ON VARIOUS RATES DEPENDING UPON THE FACTS AND CIRCUMST ANCES OF EACH CASE. BUT, THERE SHOULD BE A BASIS FOR ESTIMATION, EITHER PAST HISTORY OF ASSESSEE OR COMPARABLE CASES WHICH ARE HAVING SIMIL AR NATURE OF WORKS AND RISKS ASSOCIATED. IN THE PRESENT CASE ON HAND, THE A.O. HAS ADOPTED NET PROFIT OF 12.5% AND 8% BY RELIED UPON THE DECIS ION OF ITAT, IN THE CASE OF M/S. KNR CONSTRUCTIONS LTD. IT IS AN ADMITT ED FACT THAT ITAT HAS UPHELD ESTIMATION OF NET PROFIT ON VARIOUS RATES DE PENDING UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. IN THE CASE O F ESTIMATION, IT IS DIFFICULT TO TAKE ANY ONE OF THESE CASES AS PRECEDE NT, BECAUSE OF PECULIAR FACTS OF EACH CASE. ADMITTEDLY, THE ASSESSEE IS A L ARGE CONTRACTOR HAVING TURNOVER OF MORE THAN ` . 100 CRORES. AS POINTED OUT BY THE A.O., THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE NOT SUSCEPTIB LE FOR VERIFICATION. THE EXPENDITURES CLAIMED BY THE ASSESSEE ARE NOT SU PPORTED BY PROPER BILLS & VOUCHERS. THE ASSESSEE HAS FAILED TO EXPLA IN THE REASONS FOR NOT MAINTAINING THE BOOKS OF ACCOUNTS AND BILLS & VOUCH ERS IN SUPPORT OF EXPENDITURE DEBITED TO P&L ACCOUNT. UNDER THESE CIR CUMSTANCES, THE A.O. WAS JUSTIFIED IN ESTIMATION OF PROFIT. ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 11 11. THE A.O. HAS RELIED UPON CERTAIN JUDICIAL PRECE DENTS TO ESTIMATE THE NET PROFIT, WHEREIN THE NET PROFIT OF 12.5% AND 8% IN RESPECT OF MAIN CONTRACTS AND SUB CONTRACTS ARE UPHELD. THE A. O. HAS GIVEN HIS OWN REASONS FOR ADOPTING PARTICULAR RATE OF NET PRO FIT. THE ASSESSEE HAS RELIED UPON CERTAIN JUDICIAL PRECEDENTS, WHEREIN TH E NET PROFIT OF 8% AND 5% IS UPHELD. THE ASSESSEE HAS GIVEN HIS OWN REASON S FOR REPORTING LOW NET PROFIT. HOWEVER, BOTH THE SIDES FAILED TO JUSTI FY HOW A PARTICULAR CASE IS FIT IN TO THE FACTS OF THIS CASE FOR ADOPTING PA RTICULAR RATE OF NET PROFIT. THERE IS NO STRAIGHT JACKET FORMULA FOR ESTIMATION OF NET PROFIT. BEFORE ESTIMATION OF NET PROFIT, THE FACTS AND CIRCUMSTANC ES OF CASE SHOULD BE CONSIDERED. BUT, ONE COMMON UNDERSTANDING IS THAT, THE MOMENT AN ENTITY REACHES BREAK-EVEN LEVEL, ITS PROFIT WOULD B E HIGH, BECAUSE OF FIXED OVERHEADS. IN THE PRESENT CASE ON HAND, ON P ERUSAL OF THE FACTS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE IS A LARGE CONTRACTOR HAVING TURNOVER OF MORE THAN ` 100 CRORES. THEREFORE, KEEPING IN VIEW OF FACTS & CIRCUMSTANCES OF THIS CASE, WE ARE OF TH E VIEW THAT TO MEET THE ENDS OF JUSTICE, WE DIRECT THE A.O. TO ADOPT A NET PROFIT OF 10% ON DIRECT WORKS CONTRACTS AND 6% NET PROFIT ON SUB CON TRACT WORKS. ORDERED ACCORDINGLY. ITA NO.523/VIZAG/2014 SRI SAI LAKSHMI CONSTRUCTIONS & CO., VIJAYAWADA 12 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND JUL16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 22.07.2016 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-2(1), VIJAYAWAD A 2. / THE RESPONDENT SAI LAKSHMI CONSTRUCTIONS & CO. , D.NO.59-07-11/2, SRI SAI NILAYAM, ACHARYA RANGA STREET, RAMCHANDRA NAGAR , VIJAYAWADA 3. + / THE CIT, VIJAYAWADA 4. + ( ) / THE CIT (A), VIJAYAWADA 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM