ZUBERI ENGINEERING CO., Jaipur V. DCIT, Jaipur

ITA 979/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5145 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH CIT DHK
• Keywords: Business income; Depreciation; Bonafide mistake
• Section: 143(3); 142(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH EUH'K CJM . YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI MANISH BORAD, AM VK;DJ VIHY LA -@ ITA NO. 979/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 M/S ZUBERI ENGINEERING CO., 2835, JOGIYON KA TIBA, FUTA KHURRA, JAIPUR. CUKE VS. D.C.I.T., CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAAFZ 2103 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 996/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 A.C.I.T., CIRCLE-2, JAIPUR. CUKE VS. M/S ZUBERI ENGINEERING CO., 2835, JOGIYON KA TIBA, FUTA KHURRA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAAFZ 2103 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ANIL SHARMA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/07/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/07/2016. ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 2 VKNS'K@ ORDER PER MANISH BORAD, A.M. THESE CROSS APPEALS PERTAINING TO A.Y. 2010-11 ARE D IRECTED AGAINST THE ORDER OF LD CIT(APPEALS)-1, JAIPUR DATED 31/10/2013 VIDE ITA NO. 229/12-13. ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) WAS FRAMED ON 27/1 1/2012 BY THE LD DCIT, CIRCLE-2, JAIPUR. 2. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED AS A CONTRAC TOR FOR ERECTION AND FABRICATION. RETURN OF INCOME FOR A.Y. 2010-11 WAS E -FILED ON 09/02/2012 DECLARING INCOME OF RS. 2,50,48,510/-. THE ASSESSEE S CASE WAS PICKED UP FOR SCRUTINY ASSESSMENT UNDER CASS AND NOTICES U/S 143(2) OF THE ACT DATED 24/8/2011 WAS ISSUED AND SERVED TO THE ASSESS EE. THEREAFTER NOTICE U/S 142(1) OF THE ACT SEEKING VARIOUS INFORM ATION/DOCUMENTS AND CLARIFICATIONS WERE ISSUED. IN THE COURSE OF ASSESSM ENT PROCEEDINGS, THE LD ASSESSING OFFICER OBSERVED THAT THE WORK IN PROG RESS INCLUDED CLOSING STOCK, WHICH WAS SHOWN ON ESTIMATED BASIS, DETAILS REG ARDING USE OF MATERIAL AT VARIOUS SITES WERE MISSING AND CASH VOUC HERS FOR MISCELLANEOUS EXPENSES WERE SELF MADE, WHICH COULD NO T JUSTIFY THE ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 3 CONNECTION OF THE SAME FOR THE BUSINESS PURPOSES. O N THE BASIS OF THESE OBSERVATIONS, THE LD ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND CALCULATED THE INCOME FROM CO NTRACT RECEIPTS @ 8% OF THE GROSS TURNOVER OF RS. 47,00,13,786/-. THE LD ASSESSING OFFICER ALSO ASSESSED THE INTEREST INCOME ON FDR AT RS. 92,62,91 4/- AS INCOME FROM OTHER SOURCES. INCOME OF THE ASSESSEE WAS ASSESSED A T RS. 4,68,64,020/- BY CALCULATING BUSINESS INCOME AT RS. 3,76,01,102/ - (@ 8% ON TOTAL CONTRACTUAL RECEIPTS OF RS. 47,00,13,786/-) AND IN TEREST INCOME ON FDR AT RS. 92,62,914/- ASSESSED AS INCOME FROM OTHER SO URCES. 3. AGGRIEVED THE ASSESSEE WENT IN APPEAL BEFORE THE LD CIT(A) BUT DID NOT PRESS THE GROUND RELATING TO TREATMENT OF FDR I NTEREST OF RS. 92,62,914/- AS INCOME FROM OTHER SOURCES AND SOLITA RY GRIEVANCE BEFORE THE LD CIT(A) WAS AGAINST THE ADDITION MADE BY THE LD ASSESSING OFFICER BY CALCULATING BUSINESS INCOME @ 8% ON CONTRACT RECE IPTS OF RS. 47,00,13,786/- WITHOUT GIVING DEDUCTION TO DEPRECIAT ION, INTEREST AND REMUNERATION TO THE PARTNERS. THE LD CIT(A) PARTLY ALLOWED THE APPEAL BY SUSTAINING THE ADDITION TO 4.75% OF THE GROSS CONTR ACTUAL RECEIPTS OF RS. 47.00 CRORES, WHICH RESULTS IN THE NET PROFIT OF RS. 2,23,25,654/- BY OBSERVING AS UNDER:- ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 4 4. I HAVE CONSIDERED SUBMISSIONS OF THE APPELLANT AND HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER. IT IS SEEN THAT THE AO HAS REJECTED THE BOOKS OF ACCOUNT OF THE APPELLA NT ON THE GROUND THAT CLOSING STOCK SHOWN IN THE P&L A/C AND BALANCE SHEET INCLUDED WORK-IN-PROGRESS ON ESTIMATE BASIS AND SINCE THE ACTUAL BILLS WERE ISSUED ONLY AFTER CO MPLETION OF WORK, THE CORRECT AND ACTUAL WORK-IN-PROGRESS WAS N OT REFLECTED. MOREOVER, THE BILLS RAISED BY THE SUB-CO NTRACTORS DID NOT CONTAIN DETAILS WITH REGARD TO THE USE OF MA TERIAL PROVIDED BY THE ASSESSEE. THE AO NOTED THAT A NUMBER OF SELF MADE CASH VOUCHERS WITH ILLEGIBLE INITIALS WERE MADE. THE AO ALSO NOTED THAT THE CHARTERED ACCOUNTANT HAD NOT CERTIFIED THE CORRECTNESS OF THE VALUE OF CLOSING S TOCK IN FORM 3CD. IT WAS ALSO OBSERVED THAT THE NP RATE OF T HE CONTRACT BUSINESS, AFTER EXCLUDING THE INTEREST REC EIPTS, WAS ONLY 3.34%. THE AO, ACCORDINGLY, REJECTED THE BOOKS OF ACCOUNT AND DETERMINED THE INCOME BY APPLYING THE N P RATE OF 8%. 4.1 A PERUSAL OF THE APPELLANTS SUBMISSION ON THIS ISSUE SHOWS THAT NO SPECIFIC REBUTTAL TO THE POINTS RAISED BY T HE AO HAS BEEN GIVEN. THE APPELLANT HIMSELF HAS ACCEPTED THAT THE DEFECTS MENTIONED BY THE AO IN THE ASSESSMENT ORDER WERE UNAVOIDABLE IN NATURE, MEANING THEREBY THAT THE D EFECTS NOTED BY THE AO WERE CORRECT. NO SPECIFIC GROUNDS H AVE BEEN GIVEN TO SHOW THAT THE AOS ACTION IN REJECTIN G THE ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 5 BOOKS OF ACCOUNT WAS NOT CORRECT. THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNT IS, THEREFORE, UPHEL D. 4.2 SO FAR AS THE APPLICATION OF NP RATE OF 8% IS C ONCERNED IT IS SEEN THAT IN THE IMMEDIATELY PRECEDING YEAR MY PRED ECESSOR HAD CONFIRMED THE NP RATE OF 5.12% ON THE TOTAL REC EIPTS, AFTER ALLOWING DEDUCTION BY WAY OF DEPRECIATION, INTE REST AND REMUNERATION TO THE PARTNERS. THE APPELLANT HAD SHOWN THE NP RATE AT 4.58% AFTER CHARGING DEPRECIATION, I NTEREST AND PARTNERS REMUNERATION. THE RATE OF 5.12% WAS APP LIED AS THIS RATE WAS CONFIRMED BY THE HONBLE ITAT IN THE PRECEDING YEAR I.E., A.Y. 2008-09. IT IS FURTHER NO TED THAT IN THE YEAR UNDER CONSIDERATION THE APPELLANT HAS DECL ARED NP @ 3.36% ON THE GROSS RECEIPTS, AFTER DEPRECIATION, I NTEREST AND PARTNERS REMUNERATION, WHICH IS EXTREMELY LOW. CONSIDERING THE SUBMISSIONS OF THE APPELLANT AND OV ERALL FACTS & CIRCUMSTANCES OF THE CASE, IT WOULD BE APPRO PRIATE TO APPLY NP RATE OF 4.75% ON THE GROSS CONTRACTUAL RECEIPTS OF RS.47,00,13,786/- WHICH RESULTS IN THE NET PROFIT OF RS.2,23,25,654/-, AFTER ALLOWING DEPRECIATION, INTER EST AND PARTNERS REMUNERATION. AFTER SETTING OFF THE NET PR OFIT FROM CONTRACT BUSINESS DECLARED BY THE APPELLANT, THE AD DITION COMES TO RS.66,04,948/- WHICH IS CONFIRMED. 4. AGGRIEVED, THE ASSESSEE AND THE REVENUE BOTH ARE IN APPEALS BEFORE THE TRIBUNAL. FIRST WE WILL TAKE UP THE ASSESSE ES APPEAL. FOLLOWING GROUND HAS BEEN RAISED BY THE ASSESSEE IN ITS APPEA L: ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 6 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) IS NOT JUSTIFIED IN APPLYING THE NP RATE OF 4.75% O F TOTAL CONTRACT RECEIPTS, CONSIDERING THE SAME TO BE AFTER ALLOWING DEPRECIATION, INTEREST AND PARTNERS REMUNERATION AN D THEREBY IN CONFIRMING THE ADDITION OF RS. 66,04,948 /-. 5. THE LD AR OF THE ASSESSEE HAS MADE FOLLOWING SUBMI SSIONS:- 1. THE AO REJECTING THE BOOKS OF ACCOUNTS OF THE ASS ESSEE U/S 145(3) OF IT ACT 1961 ESTIMATED NET PROFIT BY APPLY ING NP RATE OF 8% ON TOTAL CONTRACT RECEIPTS OF RS.470013786/- WITHOUT ALLOWING ANY FURTHER DEDUCTION OF DEPRECIATION, INTE REST TO BANK AND PARTNERS REMUNERATION. THUS NET PROFIT OF FROM CONTRACT BUSINESS WAS ASSESSED FOR RS.37601102/- AG AINST DECLARED NET PROFIT OF RS.L5720706/~.(NET PROFIT DE CLARED RS.24982620/- LESS INTEREST INCOME OF RS.9261914/- ASSESSED SEPARATELY) (RESULTING INTO AN ADDITION OF RS.24982 620/-). 2. IT WAS SUBMITTED BEFORE LD.CIT(A) THAT UNDER IDENT ICAL FACTS, IN OWN CASE OF THE APPELLANT FOR THE PRECEDING ASSESSME NT YEAR 2006-07, 2007-08 AND 2008-09 THE CLAIM OF DEPRECIAT ION, BANK INTEREST, AND PARTNERS REMUNERATION HAS BEEN ALLOWED OUT OF THE NET PROFIT ESTIMATED BY APPLICATION OF NP RATE OF 8% BY THE ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 7 ID. CIT(A) HIMSELF/HERSELF AND THE SAME HAS BEEN UPH ELD BY HONBLE ITAT JAIPUR. THEREFORE THE DEPRECIATION OF RS.7611318/-, BANK INTEREST OF RS.16089158/- AND PA RTNERS REMUNERATION OF RS.480000/-(TOTAL OF RS.24180476/-) AS APPEARING IN THE AUDITED BOOKS OF ACCOUNTS AND RELE VANT PROFIT AND LOSS ACCOUNT, IS ALLOWABLE OUT OF THE NET PROFIT ESTIMATED BY THE AO. 3. THE LD. CIT(A) FOLLOWING HIS ORDER PASSED FOR THE PRECEDING YEAR INSTEAD OF SPECIFICALLY ALLOWING THE DEPRECIATION, B ANK INTEREST AND PARTNERS REMUNERATION AS CLAIMED BY TH E APPELLANT, APPLIED THE NP RATE OF 4.75% HOLDING THE SAME AFTER ALLOWING DEPRECIATION, BANK INTEREST AND PARTNERS REMUNERATION. THEREBY AN ADDITION OF RS.6604948/- (4 .75% OF RS. 470013786/- I.E. RS.22325654/- LESS DECLARED PROFIT OF RS. 15720706/-.) HAS BEEN SUSTAINED AND BALANCE OF RS.18377672/- HAS BEEN DELETED. 4. THE ASSESSEE HAS PREFERRED THIS APPEAL AGAINST TH E APPLICATION OF NP RATE OF 4.75% APPLIED BY LD. CIT(A), CONSIDERING THE SAME AFTER ALLOWING DEPRECIATION, BANK INTEREST AND PARTNERS ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 8 REMUNERATION INSTEAD OF ACTUAL ALLOWANCE OF THE SAME OUT OF NET PROFIT ESTIMATED BY APPLICATION OF NP ARE OF 8% . WHEREAS THE DEPARTMENT HAS PREFERRED APPEAL AGAINST THE RED UCTION OF NP RATE TO 4.75% AGAINST THAT OF 8% APPLIED BY THE AO. 5. THIS HONBLE BENCH VIDE ORDER DATED 15.01.2014 IN OWN CASE OF THE ASSESSEE FOR THE PRECEDING A.Y.2009-10 UNDER THE IDENTICAL FACTS FOLLOWING THE EARLIER A.Y. 2006-07, 2007-08, AND 2008-09 HAS ALLOWED THE APPEAL OF THE ASSESSEE AND A MENDED THE ORDER OF ID. CIT(A) AND HELD THAT NET PROFIT R ATE OF 8% FURTHER SUBJECT TO DEPRECIATION, INTEREST AND PARTN ERS REMUNERATION COULD BE FINAL FINDING AND DISMISSED THE APPEAL OF THE DEPARTMENT. 6. IN SUCCEEDING A.Y. 2011-12 THE LD. CIT (A) HIMS ELF FOLLOWING THE ABOVE SAID ORDER OF THIS HON. BENCH DATED 15.01 .2014 HAS UPHELD THE NP RATE OF 8% SUBJECT TO FURTHER ALLOWANC E OF DEPRECIATION, INTEREST AND PARTNERS REMUNERATION A ND THIS HONBLE BENCH VIDE ORDER DATED 18.11.2015 IN ITA NO.631/JP/2014 HAS SUSTAINED THE ORDER OF LD. CIT(A) . ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 9 7. THE FACTS OF THE CASE ARE IDENTICAL TO THAT OF PR ECEDING A.Y. 2006-07, 2007-08, 2008-09 AND 2009-10 AND SUCCEEDIN G A.Y.2011-12 AND SQUARELY COVERED WITH IN THE EARLIER ORDERS PASSED BY THIS HONBLE BENCH WHERE THE CLAIM OF DEPR ECIATION, BANK INTEREST AND PARTNERS REMUNERATION HAS BEEN SP ECIFICALLY ALLOWED OUT OF THE NET PROFIT ESTIMATED BY APPLICATI ON OF NP RATE OF 8%. 8. AS HELD BY THIS HONBLE BENCH IN OWN CASE OF THE ASSESSEE FOR 4 CONSECUTIVE PRECEDING YEARS AND SUCCEEDING YEAR A LSO, THE DEPRECIATION, BANK INTEREST AND PARTNERS REMUNERATI ON IS ALLOWABLE OUT OF NET PROFIT ESTIMATED BY APPLICATION OF NP RATE OF 8% IRRESPECTIVE OF RESULTANT NP RATE AFTER SAID ALLOWANCES. 9. THE NET PROFIT FROM CONTRACT BUSINESS BY APPLICA TION OF NP RATE OF 8% HAS BEEN ASSESSED FOR RS.37601102/- AND AFTER ALLOWING DEPRECIATION OF RS.7611318/-, BANK INTEREST OF RS.16089158/- AND PARTNERS REMUNERATION OF RS.48000 0/- (TOTAL RS. 24180476/-) THE ABOVE SAID NET PROFIT COM ES TO RS.13420626/-. THE ASSESSEE HAS ALREADY DECLARED BUS INESS PROFIT OF RS.15720706/- AS COMPUTED BY THE AO (NET PROFIT ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 10 DECLARED RS.24982620/- LESS INTEREST INCOME OF RS.9 261914/- ASSESSED SEPARATELY). 10. THEREFORE, ID. CIT(A) IS NOT JUSTIFIED IN ESTIMA TING THE NET PROFIT OF THE ASSESSEE BY APPLYING THE NP RATE OF 4 .75% HOLDING THE SAME AFTER ALLOWANCE OF DEPRECIATION, BA NK INTEREST AND PARTNERS REMUNERATION AND THEREBY IN C ONFIRMING ADDITION OF RS.6604948/-. 11. UNDER THE FACTS OF THE CASE AND SUBMISSION CIT ED ABOVE IT IS HUMBLY REQUESTED THAT THE NET PROFIT OF THE ASSESSE E MAY KINDLY BE ESTIMATED BY APPLICATION OF NP RATE OF 8% SUBJECT TO ALLOWANCE OF DEPRECIATION BANK INTEREST AND PARTNERS REMUNERATION AND THUS ADDITION CONFIRMED BY ID. CIT( A) MAY KINDLY BE DELETED AND DEPARTMENTAL APPEAL MAY KINDL Y BE DISMISSED. 6. ON THE OTHER HAND, THE LD SR. DR HAS SUPPORTED T HE ORDER OF THE LD ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND GONE THROU GH THE ORDERS PASSED ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 11 BY THE COORDINATE BENCH, JAIPUR RELIED ON BY THE LD AR. SOLITARY GRIEVANCE RAISED BY THE ASSESSEE IN THIS APPEAL IS AGAINST TH E ACTION OF THE LD CIT(A) SUSTAINING THE ADDITION BY CALCULATING 4.75% AS NET PROFIT ON GROSS CONTRACT RECEIPTS OF RS. 47.00 CRORES. 7.1 WE OBSERVE THAT SIMILAR ISSUE IN ASSESSEES OWN CASE HAS COME UP BEFORE THE COORDINATE BENCH, JAIPUR. VIDE ITA NO. 9 49/JP/2009 FOR A.Y. 2006-07 PRONOUNCED ON 09/07/2010, ITA NO. 1412 & 96 5/JP/2010 AND ITA NO. 903/JP/2010 FOR A.Y. 2003-04 & 2007-08 PRON OUNCED ON 04/04/2011, ITA NO. 839/JP/2011 FOR A.Y. 208-09 PRO NOUNCED ON 15/3/2012 AND ITA NO. 699 & 647/JP/2012 FOR A.Y. 20 09-10 PRONOUNCED ON 15/01/2014 WHEREIN IT HAS BEEN CONSISTENTLY HELD THAT THE INCOME OF THE ASSESSEE IS TO BE CALCULATED BY APPLYING 8% OF THE GROSS CONTRACT RECEIPTS, WHICH WILL BE FURTHER SUBJECT TO DEDUCTION OF DEPRECIATION, INTEREST AND REMUNERATION PAID TO THE PARTNERS. 7.2 WE OBSERVE THAT IN THE DECISION OF THE COORDINA TE BENCH IN ITA NO. 949/JP/2009 FOR A.Y. 2006-07, WHICH HAS BEEN FOLLOWE D IN THE CONSECUTIVE YEARS, THE COORDINATE BENCH HAS OBSERVE D AS UNDER:- 15. IN THE PRESENT CASE AS STATED ABOVE, ONE OF TH E PARTNERS AGREED NET PROFIT RATE OF 8% SUBJECT TO NOT ALLOWING ANY OTHER DEDUCTION UNDER WRONG NOTION. PERHAPS HE WAS OF ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 12 THE VIEW THAT ADMINISTRATIVE EXPENSES SUCH SALARY EXPENSES, RAW MATERIAL EXPENSES, ELECTRICITY EXPENS ES, LABOUR EXPENSES ETC. ETC. MAY NOT BE ALLOWED. HOWEVE R, DEPRECIATION, INTEREST AND SALARY TO PARTNERS WHICH IS OTHERWISE ALLOWABLE AND MOREOVER THE PARTNER HAS NOT SPECIFICALLY MENTIONED THAT THESE EXPENSES WILL NOT BE CLAIMED. IT SEEMS THAT THERE IS A BONAFIDE MISTAKE IN NOT MENTIONING SPECIFICALLY THESE EXPENSES BECAUSE THEY ARE NOT ADMINISTRATIVE EXPENSES BUT ARE ALLOWABLE OTHER WISE. FOR THESE REASONS, WE CAN SAY THAT LD. CIT (A) WAS JUSTIFIED IN DIRECTING THE AO TO ALLOW THESE EXPENSE S SEPARATELY. ACCORDINGLY, WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN DIRECTING THE AO TO ALLOW DEDUCTION OF DEPRECIATION, INTEREST AND SALARY TO PARTNERS, THER EFORE, WE CONFIRM THE ORDER OF LD. CIT (A). 7.3 WE FURTHER OBSERVED THAT THE COORDINATE BENCH I N ITA NO. 699 & 647/JP/2012 FOR THE IMMEDIATELY PRECEDING YEAR 2009 -10 PRONOUNCED ON 15/01/2014 HAS OBSERVED AS UNDER:- 2.4 WE HAVE HEARD THE RIVAL SUBMISSIONS. IN FACT, AT THE VERY OUTSET OF HEARING OF THE APPEALS, IT WAS BROUGHT TO OUR NOTICE THAT THE GROUND RAISED IN THE APPEAL OF THE REVENUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THIS VERY BENCH RENDERED IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. THE COPIES OF THESE TRIBUNAL ORDERS ARE AN NEXED ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 13 VIDE PAGES 41 TO 57 OF THE ASSESSEE'S PAPER BOOK. W E HAVE GONE THROUGH THE TRIBUNAL ORDERS. THE TRIBUNAL H AS CONFIRMED THE APPLICATION OF NET PROFIT RATE AT 8%, FURTHER SUBJECT TO DEPRECIATION, INTEREST TO BANK AND REMUNERATION PAID TO PARTNERS. THEREFORE, BY RESPECT FULLY FOLLOWING THE VIEW OF THIS BENCH AND FOR THE SAKE OF CONSISTENCY WE HOLD A NET PROFIT RATE OF 8% FURTHER SUBJECT TO DEPRECIATION, INTEREST PAID TO PARTNERS AND REMUNERATION PAID TO PARTNERS. THE LD. CIT(A) HAS TAK EN THE SAME VIEW, WHICH DESERVES TO BE CONFIRMED. BUT AFTER HOLDING AS ABOVE, THE LD. CIT(A) INSTEAD OF ESTIMATING THE NET PROFIT RATE BY APPLYING THE RATE OF 8% AND MAKING IT FURTHER SUBJECT TO DEPRECIATION, INTE REST AND REMUNERATION PAID TO PARTNERS, HE HAS MADE CALCULATIONS AND AFTER TOTALING THE DEPRECIATION, I NTEREST AND REMUNERATION PAID TO PARTNERS HE HAS REDUCED IT FROM THE NET PROFIT AND HE HAS ARRIVED AT NET PROF IT RATE OF 5.12%. THERE IS NO DIFFERENCE IN THE QUANTIFICAT ION OF THE RELIEF TO THE ASSESSEE. HOWEVER, THE OBJECTION O F THE ASSESSEE IS THAT CONSECUTIVELY IN ASSESSMENT YEARS AS DISCUSSED ABOVE, YEAR AFTER THE YEAR, A NET PROFIT RATE OF 8% FURTHER SUBJECT TO DEPRECIATION, INTEREST AND REMUNERATION PAID TO PARTNERS HAVE BEEN HELD TO BE JUSTIFIED IN ASSESSEE'S OWN CASE AND BY ADOPTING NET PROFIT RATE ONLY AND NOT MENTIONING FURTHER DEDUCTI ON ON ACCOUNT OF DEPRECIATION, INTEREST AND REMUNERATION PAID ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 14 TO PARTNERS. IT IS LIKELY TO SET A WRONG PRECEDENT I N ASSESSEE'S OWN CASE WHICH MAY LEAD TO COMPLEXITIES SOMETIMES IN FUTURE. SINCE THERE IS NO DIFFERENCE BETWEEN THE FINDINGS OF THE LD. CIT(A) IN THIS YEAR VIS-A- VIS EARLIER ASSESSMENT YEARS. HOWEVER, THE OBJECTIO N OF THE ASSESSEE SEEMS TO BE JUSTIFIED. THEREFORE, WE AME ND THE LATER PART OF THE FINDINGS OF THE LD. CIT(A) WHER E HE ADOPTED THE NET PROFIT RATE OF 5.12% ON TOTAL CONTR ACT RECEIPTS ALLOWING DEPRECIATION, INTEREST AND REMUNER ATION PAID TO PARTNERS. IN OUR CONSIDERED OPINION, THE LA W DEMANDS CONSISTENCY TO AVOID ANY FUTURE MISUNDERSTANDING AND TO KEEP THE FINDINGS IN THE SA ME MANNER WE HOLD THAT NET PROFIT RATE OF 8% FURTHER SUBJECT TO DEPRECIATION, INTEREST AND REMUNERATION PAID TO PARTNER COULD BE FINAL FINDING . ACCORDINGLY, WE HOLD AS ABOVE AND ALLOW THE APPEAL OF THE ASSESSEE TO THAT EXTENT. 7.4 RESPECTFULLY FOLLOWING THE DECISION OF THE COORD INATE BENCH, WE ARE OF THE CONSIDERED VIEW THAT THE BUSINESS INCOME OF T HE ASSESSEE FROM THE CONTRACT WORK OF ERECTION AND FABRICATION HAS TO BE CALCULATED BY FIRST APPLYING 8% OF THE GROSS CONTRACT RECEIPTS OF RS. 4 7,00,13,786/-WHICH COMES TO RS. 3,76,01,102.88 AND FROM THIS AMOUNT, T HE ASSESSEE SHOULD BE ALLOWED DEDUCTION OF DEPRECIATION AT RS. 76,11,31 8.77, REMUNERATION TO THE PARTNERS AT RS. 4,80,000/- AND INTEREST OF R S. 1,60,89,158.44. THE ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 15 RESULTANT FIGURE OF BUSINESS INCOME WILL COME TO RS. 1,34,20,625.67. THE TOTAL INCOME OF THE ASSESSEE TO BE CALCULATED BY AD DING INTEREST ON FDR OF RS. 92,62,914/- TO THE FIGURE OF BUSINESS INCOME OF RS. 1,34,20,625.67. ACCORDINGLY, THE TOTAL INCOME BY WAY OF THIS CALCULA TION WILL FIGURE OUT AT RS. 2,26,83,539.67. WE OBSERVE THAT THE ASSESSEE HA S DISCLOSED A NET PROFIT INCLUDING BANK INTEREST AT RS. 2,49,82,620.8 4, WHICH IS MORE THAN THE INCOME CALCULATED ABOVE AT RS. 2,26,83,539.67. WE ARE, THEREFORE, OF THE VIEW THAT THE NET PROFIT SHOWN BY THE ASSESSEE AT RS. 2,49,82,620.84 TO BE ACCEPTED AS TOTAL INCOME OF THE ASSESSEE FOR ASSESSMENT YEAR 2010-11. ACCORDINGLY, THE ADDITION SUSTAINED BY THE LD CIT(A) IS DELETED AND APPEAL OF THE ASSESSEE IS ALLOWED. 8. NOW WE TAKE THE REVENUES APPEAL BEING ITA NO. 996 /JP/2013. THE GROUND OF REVENUES APPEAL IS AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD CIT(A) WAS JUSTIFIED IN DIRECTING TO ADO PT N.P. RATE OF 4.75% AS AGAINST N.P. RATE OF 8% ADOPTED BY THE A.O. 8.1 AS WE HAVE ALREADY ADJUDICATE THIS ISSUE IN THE ASSESSEES APPEAL IN ITA NO. 979/JP/2013 WHEREIN WE HAVE FOLLOWED THE DECI SION OF COORDINATE BENCH IN ASSESSEES OWN CASE FOR PREVIOU S YEARS AND HAVE ITA NO. 979 & 996/JP/2013 M/S ZUBERI ENGINEERING CO. VS DCIT 16 DELETED THE ADDITION SUSTAINED BY THE LD CIT(A). THER EFORE THE APPEAL OF THE REVENUE IS DISMISSED 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/07/2016. SD/- SD/- DQYHKKJR EUH'K CJM . (KUL BHARAT) (MANISH BORAD) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08 TH JULY, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S ZUBERI ENGINEERING CO., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT/ACIT, CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 979 & 996/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR