M/S DEORA ELECTRIC WORKS,ALLAHABAD V. JT.CIT, ALLAHABAD

ITA 637/ALLD/2014

AI Insights

M/s Deora Electric Works appealed against the order of the CIT(A) which had partly confirmed the additions made by the Assessing Officer under section 143(3) of the Income Tax Act. The additions were primarily based on the alleged suppression of receipts and the rejection of the assessee's books of account. The Tribunal found that the Assessing Officer had not adequately verified the facts regarding the alleged suppression of receipts and directed a re-examination of this issue. However, it upheld the rejection of the books of account due to various discrepancies noted by the Assessing Officer. The Tribunal also modified the profit estimation from 7% to 5%, acknowledging the nature of the assessee's business and the competitive environment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31095 (ITAT-ALLAHABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Other Referred Cases: CIT vs. Wood Word Governor India Pvt. Ltd. (2009) 312 ITR 254 (SC), Aggarwal Construction Company vs. ACIT (2011) 198 Taxman 426 (P&H), S.P. Construction, 390 ITR 314, Hon'ble Punjab & Haryana High Court, Skyline Builders (2010) 194 Taxman 61 (Cochin 0 Trib.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A.K. SINGH
• Assessee Lawyers: PRAVEEN GODBOLE
• Keywords: Business expenditure; Rule of consistency; Bonafide belief; TDS
• Section: 143(3); 250; 13; 40A(3); 145(3); 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.637/ALLD/2014 Assessment Year: 2010-11 M/s Deora Electric Works 58-A, Sardar Patel Marg Allahabad v. The JCIT Range – I Allahabad PAN:AADFD7479B (Appellant) (Respondent) Appellant by: Shri Praveen Godbole, C.A. Respondent by: Shri A. K. Singh, Sr. D.R. Date of hearing: 17 01 2025 Date of pronouncement: 20 03 2025 O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A) passed under section 250 of the Income Tax Act, 1961 on 12.09.2014, partly allowing the appeal of the assessee. The grounds of appeal are as under: 1.That in any view of the matter assessment as made on an income of Rs.66,55,450/- as against the returned income of Rs.9,03,480/- by the assessing officer vide his order dated 22.03.2013 Under Section 143(3) of the Income Tax Act and his actions in part as maintained by the Commissioner of Income Tax (Appeal) vide his order dated 12.09.2014 are bad both on the facts of the case and in law and appellant's returned income declared on the basis of closed books of accounts is true and correct and therefore the same should ITA No.637/ALLD/2014 Page 2 of 21 have been accepted in the facts and circumstances of the case. 2. That in any view of the matter the income tax is levied on real income only and not on artificial income as worked by the Assessing Officer in his order in the present case because the appellant declared true and correct income in the return based on closed books of accounts which is the real income. Even appellant's accounts are complete in all respect which are maintained on the basis of correct principles of accounting and therefore in the facts and circumstances of the case the provisions of Section 145(3) of the Income Tax Act as involved by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeal) is unjustified, incorrect and illegal in the eyes of law, hence rejection of accounts in highly objectionable and illegal. 3. That in any view of the matter all the contract receipts were from various Central Government Department and received through account payee cheques which are duly recorded in books also but the two lower authorities failed to consider the same judiciously, hence enhancement in receipt as made and maintained is unwarranted. Even the entire discussion, observations and findings of the two lower authorities in their orders for enhancing the income, making and maintaining the additions are unjustified, incorrect, illegal and contrary to the actual facts of the case. 4. That in any view of the matter the actual receipt/sales from contract work during the year was Rs.10,66,77,556/- and not Rs.11,29,91,342/- as created by the Assessing Officer based on his own likings and the same as maintained by the Commissioner of Income Tax (Appeal) is ITA No.637/ALLD/2014 Page 3 of 21 highly unjustified and wrong and therefore the declared receipt is liable to be accepted in all fairness. 5. That in any view of the matter the Assessing Officer totally failed in observing that the amount of Rs.56,69,837/- are suppressed receipts and such allegation as made by the Assessing Officer and Confirmed by the Commissioner of Income Tax (Appeal) in their Orders is highly unjustified and incorrect. Out of the said alleged receipts. a. Rs.3464577/- was already taken into account/taxed either in the year under consideration or in earlier years. b. Rs.939029 was never received/accrued to the assessee from the Govt. Department due to reduced scope of work from what originally in the tender. c. and likewise Rs.1266231/- was received in subsequent years & duly taxed/considered in the gross receipts of those years. Hence it is a duplicate addition during the year. 6. That in any view of the matter a net profit of 5% as against 7% applied by the Assessing Officer on estimated receipts as considered by the Commissioner of Income Tax (Appeal) is totally incorrect, and illegal hence the declared profit on the basis of closed books of accounts should have been accepted in the facts and Circumstances of the case. 7. That in any view of the matter the learned Commissioner of Income Tax (Appeal) also failed to consider the nature of appellant's business and without considering the true nature of business a net profit rate of 5% as against 7% as applied by the Assessing Officer ignoring the past records and consistency as invoked and maintained for making extra ITA No.637/ALLD/2014 Page 4 of 21 addition is highly unjustified and illegal and therefore the declared income is liable to be accepted in all fairness. 8.That in any view of the matter for maintaining net profit rate of 5% out of 7% as applied by the Assessing Officer, cited case laws in the orders of the two lower authorities are not applicable in the present case and the copies of those cited cases should have been provided to the appellant before taking the shelter of those cases for making and maintaining the addition in which the lower authorities totally failed, hence the addition as made and maintained on this count is unwarranted and illegal. 9.That in any view of the matter the interest charged under different sections of the Income Tax Act is highly unjustified and illegal in the facts and circumstances of the case. 10.That in any view of the matter the assessee reserves his right to take any fresh ground of appeal before hearing of the appeal. 2. The facts of the case are that during the year under consideration, the assessee declared contractual receipts from various Government Departments at Rs.10,66,77,556/-. Of the above, receipts amounting to Rs.5,87,25,039/- came from Branch Office of Jaipur and pertained to sales of Generators that were dispatched from Jaipur Branch against Government orders. The Assessing Officer, on going through the agreements entered into by the assessee with various Government Departments, noticed that some of the works had been completed before the ITA No.637/ALLD/2014 Page 5 of 21 end of the financial years, but the entire Tender value had not been shown as received by the assessee. He worked out a sum of Rs.23,11,600/- which, in his opinion, ought to have been received by the assessee by this time, but was not shown as having been received. The Assessing Officer also observed that while some of the works which were not completed, stretched to the following financial years, no expenses other than material used had been shown towards work-in-progress. He went on to point out many more defects in the books of account in his assessment order. Some of these defects that were observed by him were that: TDS was not paid on the payments made to the Advocate; some payments were made in contravention of the provisions of section 40A(3) of the Act; there were differences in the figures of Bank Guarantee and payment of commission as disclosed by the assessee and bank; payments made to LED Power in the months of November, December, 2009, January, February and March, 2010 were all recorded in the books on a single day, i.e., on 31.03.2010; purchases amounting to Rs.2,52,000/- were not verifiable from vouchers; certain telephones were found installed at the residences of the partners, expenses of which have been claimed in the profit and loss account; expenditure had been claimed with regard to vehicle that was not in the books of the firm; vouchers for office ITA No.637/ALLD/2014 Page 6 of 21 expenses, salary and wages, labour charges and site expenses were found to be self-made; payment of electricity had been made relating to residences of the partners, etc. On the basis of these, the Assessing Officer held that the books of the assessee were – both incomplete and incorrect and he proposed to reject the same under section 145(3) of the Act. To the show cause notice, the assessee pointed out that it was maintaining its books of account on mercantile basis and the income was disclosed as and when it was received. The assessee was entitled to receipts when the work was executed and not on the basis of the work awarded. It was submitted that the payment was received when the Department took measurements and recorded the amount in their books. The assessee submitted that when the amount was not received, the same was shown as sundry debtors. The assessee submitted that its books had been audited in the past and results are generally accepted. On the other allegations, the assessee submitted replies explaining why the observations made by the Assessing Officer were not of a nature that would require rejection of its books. It was submitted that in some cases, there were variations in receivables on account of the fact that the work had either been increased or reduced by the concerned Government Departments. However, it was not in a position to provide details, as the respective Government Departments were ITA No.637/ALLD/2014 Page 7 of 21 not providing the evidences for such extension/reduction. Regarding the payment made to Advocate without deduction of TDS, it was submitted that the same was not made according to the bonafide belief that tax deduction was not required for the amounts below Rs.50,000/-. Regarding the payments disallowable under section 40A(3) of the Act, it was submitted that these were made after office hours at various sites. Regarding the difference in amount of bank guarantee and commission as reported by the Bank, the assessee submitted that the guarantees were taken from Bank of Baroda, Main Branch, Allahabad and the fees were collected by them from the bank account and such bank account tallied with the books of account. On the issue of entry of five months of payment to LED Power, it was submitted that this was due to a clerical mistake. On the purchases of items through self-made vouchers, it was submitted that sometimes items like sand, bricks, etc. were done by the employees at remote sites in small quantities for execution of works and local vendors dealing in such items were not in a position to issue bills. Therefore, self-made vouchers were made, but these were for negligible amounts as compared to overall purchases. With regard to vehicles, on which expenditure had been made, it was submitted that while they were not properties of the firm, they were used by the firm for business purposes and ITA No.637/ALLD/2014 Page 8 of 21 hence the expenditure had been claimed. Regarding payment of electricity and telephone on account of partners, Shri Pawan Kumar Deora and Shri Ashok Kumar Deora, it was submitted that a part of their house was used for office premises and hence the payment relating to business expenses were claimed. It was further submitted that in previous years, the same issue had arisen and the Assessing Officers had examined and verified the same and also considered the practical problems. Thereafter, no adverse view had been taken. It was, therefore, prayed that adverse inference should not be taken in this regard. 3. The AO did not agree with the explanations offered by the assessee. He made enquiries from some of the Departments concerned and collected information from BSNL (ED), Kanpur and The Garrison Engineer (West), Allahabad. From the accounts of BSNL (ED), Kanpur, he ascertained that the date of completion of work was 29.06.2009 and the date of final payment was 17.06.2010. From the analysis of the reply, he concluded that an amount of Rs.98,750/- which was paid in financial year 2010-11, ought to have been disclosed in the books of account on the basis of mercantile system of accounting. The correspondence made with The Garrison Engineer (West), Allahabad revealed that tender amount was of Rs.19,82,510/- and the date of completion was 30.01.2009. The date of final ITA No.637/ALLD/2014 Page 9 of 21 payment was in August, 2009, leaving the balance at Nil. Thus, he concluded that the assessee had not disclosed the amount of Rs.4,69,067/-. He rejected the explanation of the assessee that there was short receipt due to reduction of scope of work on the basis of the reply submitted by The Garrison Engineer (West), Allahabad. On the basis of such observations made by him, the Assessing Officer rejected the book results and applied net profit rate of 7% on the contractual receipts of Rs.10,66,77,556/- as against the declared net profit rate of 2.02%. He also made an addition of Rs.56,69,837/- on account of short receipts as disclosed above and thus assessed the total net profit at Rs.79,09,394/- on total receipts of Rs.11,29,91,342/-. 4. Aggrieved with this addition, the assessee went in appeal before the ld. CIT(A), Allahabad. Before the ld. CIT(A), it was submitted that the assessee firm was mainly engaged in electrical contracts for Central Government Departments, such as MES, Railway and BSNL. Regular books of account had been maintained on day-to-day basis, which were audited year after year. In the last five years, all the assessments have been completed under section 143(3) of the Act and no additions of the nature made in the current year, had been made previously. It was submitted that all the books of account had been produced before the Assessing Officer and all the required ITA No.637/ALLD/2014 Page 10 of 21 information/details as per his queries were furnished. No specific fault was found in the books of account or the audit report. It was submitted that there was no suppression of receipts but out of the tender amount, certain receipts were not received by the assessee from Government Departments in Serial No.9 due to reduced work by the Government Department. Similarly, on other occasions, receipts were increased due to enhancement of the work. While the assessee had included the amounts received on enhancement of work, it had reduced the amounts not received due to reduction in scope of work. The Assessing Officer had not verified this fact from the concerned Government Department and made additions in arbitrary manner, which were unjustified and illegal. It was also submitted that the Assessing Officer had made additions without appreciating that of the added receipts of Rs.56,69,837/-, seven sundry debtors of Rs.34,64,577/- had been shown in the balance sheet as on 31.03.2010. Therefore, the Assessing Officer was wrong in alleging suppression of receipts. A chart was submitted by the assessee before the ld. CIT(A) to reconcile this amount of Rs.56,69,837/-, with its accounts. It was pointed out that with regard to Rs.98,750/- stated to have been suppressed on account of BSNL(ED), Kanpur, it was submitted that the same amount was appearing in the balance sheet under the head ‘Sundry ITA No.637/ALLD/2014 Page 11 of 21 Debtors receivable’, as was the sum of Rs.4,69,067/-. The assessee also questioned the application of rate of 7% to the net receipts of the assessee ignoring the past results of the assessee and the fact that those past results have been accepted in successive assessments under section 143(3) of the Act. It was further submitted that the reduction of amount was not correct because the profit declared by the assessee in this year was more than the profits declared in previous year and no specific faults have been found in the books of account. 5. The ld. CIT(A) was not convinced with the replies of the assessee. He observed that the assessee had submitted that it follows mercantile system of accounting, but had shown its income on the basis of receipts. This was against the principle of accounting. He held that the assessee did not have any explanation as to why, inspite of following mercantile system of accounting, it had shown the income on receipt. He further observed that when the Assessing Officer examined certain documents, he did not find that the short receipt of the assessee was attributable to reduced scope of work. He also rejected the arguments of the assessee that addition made on account of suppression of receipts amounted to double addition, observing that it was the responsibility of the assessee to declare income according to the method of accounting regularly followed by it. ITA No.637/ALLD/2014 Page 12 of 21 He held that debtors could not be shown in the balance sheet without routing the same through the profit and loss account. He upheld the decision of the Assessing Officer to rely upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Wood Word Governor India Pvt. Ltd. (2009) 312 ITR 254 (SC), in which it has been held that the income has to be declared on due basis, even before it is actually received. Therefore, he confirmed the addition of Rs.56,69,837/- made by the Assessing Officer. On the issue of rejection of the books of account, the ld. CIT(A) observed that different ITAT Benches in the cases of Goyal Construction Company, Pooja Construction Company, Singhal Builders Contractor and Gupta Construction Company had confirmed the profit rates of 11%, 10%, 12% and 8% respectively. He agreed with the Assessing Officer on the fact that there were mistakes in the books of account, as listed above in this order, and held that since the principle of res-judicata did not apply in Income Tax proceedings, the reliance placed by the assessee on the principle of consistency to hold that the additions should not be made was not justified. He also rejected the decisions relied upon by the assessee, holding that the said decisions were distinguishable from the facts of the case of the assessee. He, therefore, upheld the decision of the Assessing Officer to reject the books of account. However, on the issue of estimation of ITA No.637/ALLD/2014 Page 13 of 21 profits, he held that the Assessing Officer had not considered many such judgements wherein the Tribunals have confirmed the estimation of lower profit. The Assessing Officer had also overlooked the fact that receipt of Rs.5,87,25,039/- was related to the supply of Generators, which were not Civil Contract works. Therefore, he directed the Assessing Officer to estimate the net profit rate at 5% instead of 7% and accordingly granted relief to the assessee of Rs.29,59,826/-. 6. The assessee is aggrieved against this order of the ld. CIT(A) and has accordingly come in appeal before us. Shri Praveen Godbole, C.A. (hereinafter known as Ld. A.R.), arguing the case of the assessee, pointed out that in the assessment proceedings, the books of account were produced on a number of times and thoroughly examined by the Assessing Officer, but no specific defects have been found. He submitted that the assessee was not engaged in Civil Construction, but in electrical contract business, and in such type of work, the margin of profit was much lower as compared to Civil Contract work. Apart from this, there was cut-throat competition and work was allotted by competitive tender bid. The price variation in materials after bid was awarded had also to be absorbed by the Contractor. Therefore, it was not proper for the authorities below to disturb the net profits declared by the assessee when the same had ITA No.637/ALLD/2014 Page 14 of 21 consistently been declared year after year on similar set of facts. With regard to estimation of receipt at Rs.11,23,47,393/-, it was submitted that all the receipts were from Government Departments after deduction of TDS in all cases. The benefit of TDS had been allowed. The only cause for the enhancement was that the amount in question was not received during the year. However, the assessee had declared receipts in the year in question and reconciliation had also been furnished, showing how the receipts were taken into their accounts. In this background, it was not proper to consider higher receipts on presumption basis. Hence, the additions made were liable to be deleted. It was further submitted, without prejudice to these arguments, that there was no suppression of receipts and that even if the amounts have to be added back, it could not constitute income, as there was expenditure component involved in the same and, therefore, only profit element of the same could be added back. For this reason, it was submitted that the addition made was unwarranted. 7. On the other hand, Shri A. K. Singh, the ld. Departmental Representative (hereinafter know as ld. D.R.), pointed out that the Assessing Officer had observed that the assessee had suppressed receipts of Rs.56,69,827/- and the ld. CIT(A) had also observed that the same were disallowable as per ITA No.637/ALLD/2014 Page 15 of 21 mercantile system of accounting that was adopted by the assessee. The assessee’s claim of rejection in quantity of receipts due to reduction in scope of work had not been borne out by correspondence with certain Government Departments that the Assessing Officer had undertaken. Nor could assessee produce evidence in this regard. Furthermore, the ld. D.R. pointed out that inconsistencies in the books of account had been duly pointed out by the Assessing Officer in his order, wherein he had demonstrated that besides other things, the assessee was only showing cost of material in work-in-progress which demonstrated how the accounts were incorrect. Therefore, he submitted that the Assessing Officer was justified in rejecting the books of account. He also challenged the view of the Ld. A.R. that the estimation of income after rejection of the books of account ought to be done based on past history. He submitted that when the books of account had been felt to be unreliable, then there was no justification to insist that the books of account of the same assessee for previous years ought to be relied upon, because the past history would not give a vested right to the assessee to insist on those same profits. For this proposition, he placed reliance on the following case laws: 1. Aggarwal Construction Company vs. ACIT (2011) 198 Taxman 426 (P&H). ITA No.637/ALLD/2014 Page 16 of 21 2. S.P. Construction, 390 ITR 314, Hon'ble Punjab & Haryana High Court. 3. Skyline Builders (2010) 194 Taxman 61 (Cochin 0 Trib.). 8. We have duly considered the facts and circumstances of the case and heard both the parties. At the outset, it is important to point out that, of the turnover of Rs.10,66,77,556/-, that has been declared by the assessee, receipts amounting to Rs.5,87,25,039/- do not relate to Civil Contracts, but they relate to sales of Generators, for which no inconsistency in the books of account have been pointed out by the Assessing Officer or upheld by the ld. CIT(A). Therefore, we are only concerned with the receipts amounting to Rs.4,79,52,570/- (as disclosed by the assessee from contractual business), and receipts amounting to Rs.56,69,837/- (alleged to have been suppressed). We may take up the issue of alleged suppression of receipts first. The Assessing Officer has held that the receipts have been suppressed because the amounts shown as receipts in the books do not tally with the tender amounts and there is no proof of the fact that any scope of work was reduced by any of the Government Department. The ld. CIT(A) has confirmed this addition, holding that, as the assessee was following mercantile system of accounting, the assessee was obliged to show receipts on accrual basis and since it had failed to do so, the addition was ITA No.637/ALLD/2014 Page 17 of 21 confirmed. On going through the order of the ld. CIT(A), we find that the assessee had submitted a reconciliation chart accounting for and showing the breakup of Rs.56,69,837/- added back by the Assessing Officer. It is observed that of this amount, only Rs.9,39,029/- have been held to be short receipts on account of reduction of scope of work. With regard to the same, it is not clear as to whether the Assessing Officer has made specific queries/confirmations with respective Government Departments regarding whether there was actually any reduction in the scope of work before making this addition. We further observe that no amount is paid by the Government Departments without deduction of tax at source. The TDS statements were before the Assessing Officer and from the same it would have been possible to quantify the amount actually paid by each Government Department to the assessee. Therefore, without pointing out that TDS had been deducted for higher amount of payment and without pointing out that the said Government Department had denied any reduction in the scope of work, merely because the assessee was not in a position to produce Certificate from the concerned Government Departments that they had reduced the scope of work and the fact that some Govt. Departments had claimed that no further payments were due to the assessee, the Assessing Officer was not justified in ITA No.637/ALLD/2014 Page 18 of 21 concluding that the amounts that were reflected as the tender amount was the amount that would have been paid to the assessee. We, therefore, restore this particular matter back to the file of the Assessing Officer to make necessary enquiries with the concerned Government Departments before making any addition in this regard. We further observe from the submissions made by the assessee that of the sum of Rs.56,69,837/-, which has been added back, a sum of Rs.34,64,577/- had been shown as sundry debtors. The same has not been accepted by the ld. CIT(A) as accounting for the receipts, on account of his belief that the assessee was obliged to disclose the same upon accrual and since the work had been completed, the amount had been accrued. We believe that the ld. CIT(A) has omitted to consider the explanation of the assessee that in the case of the Government Departments, the amount accrues only when the measurements are taken and payable amounts recorded in the books of the concerned agency. Prior to that, it is only a claim and, therefore, if the work was completed on a particular day, but the measurement was delayed and consequently quantification of the amount payable was delayed on account of measurement, then the amount cannot be said to accrue in the hands of the assessee till this exercise was completed. We, therefore, do not see any reason to doubt the version of the ITA No.637/ALLD/2014 Page 19 of 21 assessee that the amounts were carried to the balance sheet as sundry debtors, pending measurements and acknowledgement of the amounts due. We further note that the Hon'ble Courts have held that where rates of taxes are same, the assessee does not derive any benefit by seeking to offer its receipts to tax in a later year rather than in an immediately preceding year and the Revenue also does not gain any benefit by taxing it earlier than when it is required to be taxed. We also observe that the assessee has disclosed certain amounts as excess on account of enhancement of work. In the circumstances, we do not find any justification for any addition to be made on account of suppression of receipts without examination of whether the amounts had actually accrued and were unaccounted for. We, therefore, direct the AO to examine the reconciliation statement with reference to the books of the assessee and arrive at a final decision on the matter thereafter. Grounds No.3, 4 and 5 are accordingly allowed for statistical purposes. 9. The next issue is with relation to the rejection of the books of account and the decision of the ld. CIT(A) to estimate profit @ 5% of net receipts. While there is certain amount of guess work involved in making estimate, we believe that estimate should be made having regard to the previous history of the assessee or with reference to comparable cases. The Assessing ITA No.637/ALLD/2014 Page 20 of 21 Officer has pointed out several discrepancies in the books of the assessee which would make it evident that the books of the assessee were not complete and correct in all respects. Therefore, his decision to reject the books under section 145(3) of the Act is upheld. However, with regard to the estimation of profits, the Assessing Officer has not brought on record the fact that comparable cases upon which profits of the assessee are estimated, are cases of electrical contractors. As the Ld. A.R. has pointed out, the case of electrical contractor cannot be compared to the case of Civil Contractors and, therefore, rates of profit determined in such cases cannot be a basis to determine the rates of profits in the case of the assessee. While we are in agreement with the ld. D.R. that the past history of the case does not give the assessee a vested right to be assessed on such profits even after his books have been shown to be incomplete and incorrect, we also feel that in the absence of any comparable cases, the past history of the assessee, which has been accepted in many assessments under section 143(3) of the Act, cannot be overlooked all together. Therefore, keeping in mind this fact and the nature of inconsistencies observed in the books, we believe that the ends of justice would be served if the net profit declared @ 2.87% is increased to 3.5% of contractual receipts (excluding sales, on which there is no controversy). Accordingly, we order ITA No.637/ALLD/2014 Page 21 of 21 that the net profit of the assessee be assessed @3.5% on contractual receipts of Rs.4,79,52,517/-. For the balance receipts from sale, the declared profits of the assessee can be accepted. Accordingly, grounds No.1 & 2 of the appeal are rejected and grounds No.6, 7 and 8 of the appeal are allowed in part. 10. Ground No.9 pertains to charging of interest which automatically follows the sustenance of any addition. However, the assessee would get relief to the extent allowed in this appeal and, therefore, this ground is allowed to that extent. 11. In the result, the appeal of the assessee is partly allowed. Order pronounced on 20/03/2025. Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:20/03/2025 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order Assistant Registrar/DDO "