DCIT,CC-XIII , Kolkata, Kolkata v. M/S Silver Point Infratech Ltd, Kolkata

ITSSA 49/KOL/2012 | 2010-2011
Pronouncement Date: 05-11-2014

Appeal Details

RSA Number 4923516 RSA 2012
Assessee PAN AAFCA5482J
Bench Kolkata
Appeal Number ITSSA 49/KOL/2012
Duration Of Justice 1 year(s) 11 month(s) 26 day(s)
Appellant DCIT,CC-XIII , Kolkata, Kolkata
Respondent M/S Silver Point Infratech Ltd, Kolkata
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 05-11-2014
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 05-11-2014
Assessment Year 2010-2011
Appeal Filed On 09-11-2012
Judgment Text
C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE /AND ! ) [BEFORE SHRI MAHAVIR SINGH JM & SHRI SHAMIM YAHYA AM] ( !' # '$ ) % / I.T(SS).A NOS. 44 TO 46/KOL/2012 !& '( )*/ BLOCK PERIOD: 2008-09 TO 2010-11 DEPUTY COMMISSIONER OF INCOME-TAX VS. ANUBHAV INF RASTRUCTURE LTD. C.C.XIII KOLKATA. (PAN:AAFCA5482J) ( - /APPELLANT ) (./ -/ RESPONDENT ) & ( !' # '$ ) % / I.T(SS).A NOS. 47 TO 49/KOL/2012 !& '( )*/ BLOCK PERIOD: 2008-09 TO 2010-11 DEPUTY COMMISSIONER OF INCOME-TAX VS. SILVER POIN T INFRATECH LTD. C.C.XIII KOLKATA. (PAN:AAECS4679L) ( - /APPELLANT ) (./ -/ RESPONDENT ) DATE OF HEARING: 22.10.2014 DATE OF PRONOUNCEMENT: 05.11.2014 FOR THE APPELLANT: N O N E FOR THE RESPONDENT: SHRI SUBHAS AGARWAL ADVOCAT E / ORDER PER SHRI MAHAVIR SINGH JM : ALL THESE APPEALS BY REVENUE ARE ARISING OUT OF SEP ARATE ORDERS OF CIT(A) CENTRAL-II KOLKATA IN APPEAL NOS. 116 117 & 118/CC-XIII/CIT(A )C-II/11-12 DATED 08.08.2012 AND NOS. 111 112 & 113/CC-XIII/CIT(A)C-II/11-12 DATED 09.08 .2012 RESPECTIVELY. ASSESSMENTS WERE FRAMED BY DCIT C.C-XIII KOLKATA U/S. 153C READ WI TH 143(3) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEARS 2008-09 TO 2010-11 VIDE HIS SEPARATE ORDERS DATED 04.08.2011 IN RESPECT OF I.T( SS).A NOS. 44 TO 46/KOL/2012 AND 08.08.2011 IN RESPECT OF I.T(SS).A NOS. 47 TO 49/K OL/2012 RESPECTIVELY. SINCE GROUNDS ARE IDENTICAL AND FACTS ARE COMMON WE DISPOSE OF ALL T HESE APPEALS BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 IT(SS)A NOS. 44-46/K/2012 & 47-49/K/2012 ANUBHAV INFRASTRUCTURE LTD. & SILVER POINT INFRAT ECH LTD. BP 2008-09 TO 2010-11 2. THE ONLY COMMON ISSUE IN THESE SIX APPEALS OF RE VENUE IS AGAINST THE ORDER OF CIT(A) IN ESTIMATING THE NET PROFIT @ 4% OF THE GROSS CONTRAC TUAL RECEIPT AS AGAINST ESTIMATED BY THE AO AT 8%. 3. BRIEFLY STATED FACTS ARE THAT A SEARCH AND SEIZU RE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED ON THE BUSINESS AND RESIDENTIAL PREMISES OF TANTIA CONSTRUCTION LTD. AND GPT INFRAPROJECTS LIMITED ON 17.03.2010. DURING THE CO URSE OF SEARCH SOME DOCUMENTS BELONGING TO THE ASSESSEE COMPANY WERE SEIZED AND ALSO A CONS EQUENTIAL SURVEY OPERATION U/S. 133A OF THE ACT WAS CARRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE AT 59 RAJA NABA KRISHNA STREET KOLKATA-700005. CONSEQUENT TO SEARCH A NOTICE U/S. 153C OF THE ACT WAS ISSUED ON THE ASSESSEE COMPANY AND IN RESPONSE TO SUCH NOTICE ASSESSEE FIL ED ITS RETURN OF INCOME ON 20.04.2011 AT A TAXABLE INCOME OF RS.6 67 778/-. THE ASSESSEE COMP ANY IS ENGAGED IN THE BUSINESS OF EXECUTING WORK CONTRACTS OF CIVIL CONSTRUCTION SUP PLY OF LABOUR AND TRADING IN SAREES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE F ILED AUDITED BALANCE SHEET P&L ACCOUNT AND ITS ANNEXURE. THE ASSESSEE COMPANY ALSO PRODUCE D BOOKS OF ACCOUNT VOUCHERS INVOICES BANK STATEMENTS BANK RECONCILIATION AND EXPLAINED THE CREDIT ENTRIES THEREIN. THE AO NOTED THAT AS PER BALANCE CONTRA EXPENSES THE ASSESSEE PRODUCE D COMPUTERISED LEDGER ACCOUNT BUT FAILED TO PRODUCE ALL THE RELEVANT VOUCHERS BILLS INVOICES IN SUPPORT OF THESE EXPENSES. THE AO ALSO EXAMINED LABOUR REGISTERS PRODUCED BY ASSESSEE AND FROM THESE HE NOTICED THAT THE LABOUR REGISTER DOES NOT CONTAIN SIGNATURE/THUMB IMPRESSIO N OF ALL THE RECIPIENTS OF THE PAYMENT AND IN TERM OF THE ABOVE AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE NET PROFIT AT 8% OF GROSS CONTRACT RECEIPT OF RS.11 44 53 341/- AND ESTIMATED THE NET PROFIT AT RS.91 56 267/-. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE RESTRICTED THE NET PROFIT RATE @ 4% OF THE GROSS CO NTRACTUAL RECEIPTS INSTEAD OF 8% DONE BY AO VIDE PARA 5 OF HIS APPELLATE ORDER AS UNDER: 5. I HAVE CONSIDERED THE SUBMISSON OF THE APPELLAN T AND PERUSED THE ASSESSMENT ORDER. THE FACTS OF THE CASE HAVE ALREADY BEEN DISCUSSED A S ABOVE. ON PERUSAL OF ASSESSMENT ORDER IT IS APPARENT THAT IN THE COURSE OF ASSESSM ENT PROCEEDINGS THE APPELLANT COMPANY PRODUCED AUDITED BOOKS OF ACCOUNT BILLS AN D VOUCHERS AS WELL AS THE BANK STATEMENTS ETC. THE APPELLANT SUBMITTED OTHER DETAI LS CALLED FOR BY THE AO EXCEPT SOME SPECIFIC DETAILS AND DOCUMENTS REQUIRED BY HIM. THE APPELLANT COMPANY ALSO PRODUCED THE LABOUR REGISTER BEFORE THE AO. ON EXAMINATION OF SAID REGISTER THE AO WAS OF THE OPINION THAT THE SAME HAS NOT BEEN MAINTAINED IN C ONVENTIONAL MANNER. HOWEVER HE DID NOT STATE THAT IN WHICH MANNER THE APPELLANT WA S REQUIRED TO MAINTAIN THE LABOUR REGISTER BUT MADE CERTAIN ADVERSE OBSERVATIONS WI TH REFERENCE TO SAID LABOUR REGISTER. ACCORDING TO THE AO THE APPELLANT COMPANY ALSO DID NOT PRODUCE THE BILLS/VOUCHERS OF PURCHASE OF MATERIAL AND ONLY SUBMITTED THE COMPUTE RIZED LEDGER ACCOUNTS. AFTER 3 IT(SS)A NOS. 44-46/K/2012 & 47-49/K/2012 ANUBHAV INFRASTRUCTURE LTD. & SILVER POINT INFRAT ECH LTD. BP 2008-09 TO 2010-11 MAKING SUCH OBSERVATIONS IT IS HELD BY THE AO THAT THE BOOK RESULTS OF THE APPELLANT COMPANY CANNOT BE ACCEPTED AND HENCE HE REJECTED THE BOOKS OF ACCOUNT BY INVOKING PROVISIONS OF SECTION 145 OF THE ACT. SINCE THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF EXECUTING THE CIVIL WORKS CONTRACTS AWA RDED BY ITS PRINCIPALS THE AO MADE COMPARISON OF PROFIT MARGIN OF APPELLANT COMPANY WI TH THE PROFIT MARGINS OF ITS PRINCIPALS FOR WHOM THE APPELLANT HAD WORKED AS A S UB-CONTRACTOR. AS STATED ABOVE THE AO COMPARED THE NET PROFIT OF TANTIA CONSTRUCTI ONS LTD GPT INFRAPROJECTS LTD AND ALLIED INFRASTRUCTURE & PROJECTS PVT. LTD. FOR VARI OUS ASSESSMENT YEARS WITH THE NET PROFIT OF THE APPELLANT COMPANY. IT IS OBSERVED BY THE AO THAT THE PROFIT SHOWN BY THE APPELLANT COMPANY WAS MUCH LESS THAN THE PROFIT DEC LARED BY THESE COMPANIES. IN THE CASE OF TANTIA CONSTRUCTIONS LTD. THE AVERAGE PROFI T MARGIN WAS 5.93% IN THE CASE OF GPT INFRAPROJECTS LTD IT WAS 6.L5% AND IN THE CASE OF ALLIED INFRASTRUCTURE & PROJECTS PVT. LTD. THE PROFIT MARGIN WAS 5.19% WHEREAS THE A PPELLANT COMPANY HAD SHOWN PROFIT MARGINS OF 1.94% 0.67% 0.20% AND 0.09% FOR A.YS. 2007-08 2008-09 2009-10 AND 2010-11 RESPECTIVELY. THEREAFTER THE AO CONSIDERED THE PROVISIONS OF SECTION 44AD OF THE ACT ACCORDING TO WHICH IN THE CASE OF BUSINES S OF CIVIL CONSTRUCTION WHERE THE GROSS RECEIPT IS NOT EXCEEDING RS. 40 LAKHS THE NE T PROFIT IS TO BE TAKEN AT 8%. AS PER THE AO TO ASSESS AN INCOME OF THE ASSESSEE IT IS IMPORTANT TO CONSIDER THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE PAST HISTORY O F THE ASSESSEE AND CONDUCT OF THE ASSESSEE. ACCORDING TO HIM CONSIDERING THE FACTS A ND CIRCUMSTANCES OF THE CASE CONDUCT OF THE ASSESSEE DEFECTS POINTED OUT IN MAI NTENANCE OF BOOKS OF ACCOUNT UNVERIFIABLE MATERIAL EXPENSES AND NET PROFIT RATE OF COMPARABLE CASES HAVING SIMILAR NATURE OF BUSINESS THE APPLICATON OF NET PROFIT R ATE OF 8% IN THE CASE OF APPELLANT WOULD BE REASONABLE. ON THE OTHER HAND IT IS ARGUE D BY THE APPELLANT THAT THE PROFIT MARGINS OF THE COMPANIES NAMELY TANTIAL CONSTRUCTI ONS GPT INFRAPROJECTS AND ALLIED INFRASTRUCTURE CANNOT BE COMPARED WITH THE MARGIN O F THE APPELLANT COMPANY BECAUSE ALL THESE COMPANIES ARE CONTRACTORS WHEREAS THE AP PELLANT COMPANY IS A SUB- CONTRACTOR. FURTHER THE MAGNITUDES AND INFRASTRUC UTRES OF THOSE COMPANIES ARE HUGE THAN THE APPELLANT COMPANY. THAT THE APPELLANT COM PANY HAS WORKED AS A SUB- CONTRACTOR OF THOSE COMPANIES WHOSE PROFIT MARGINS HAVE BEEN COMPARED BY THE AO WITH THE PROFIT MARGIN OF THE APPELLANT. IT IS ALSO ARGUED BY THE APPELLANT THAT IN THE CASE OF A SUB-CONTRACTOR THE PROFIT MARGIN IS ALW AYS LESS THAN A CONTRACTOR. ON CAREFUL CONSIDERATION OF THE FACTS I AM OF THE OPI NION THAT THAT THE AO WAS NOT JUSTUIFIED IN ESTIMATING PROFIT @ 8% IN THE CASE OF APPELLANT COMPANY BY INVOKING PROVISIONS OF SECTION 44AD OF THE ACT. IN THE COURS E OF APPELLATE PROCEEDINGS THOUGH THE APPELLANT HAS NOT DISPUTED THE APPLICATION OF S ECTION 145 BUT DISPUTED THE RATE AT WHICH PROFT HAS BEEN ESTIMATED BY THE AO. ON PERUS AL OF ASSESSMENT ORDER IT IS APPARENT THAT INITIALLY THE AO COMPARED THE NET PRO FIT OF THE APELLANT WITH THE PROFITS OF ITS PRINCIPALS BUT LATER ON APPLIED THE PROFIT RATE IN THE HANDS OF APPELLANT AT 8% AS PER SECTION 44AD. IN FACT THE PROFIT MARGINS IN THE CA SES OF APPELLANTS PRINCIPALS WAS LESS THAN 8%. IT IS NOT KNOWN AS TO HOW IN THE OPINION OF AO 8% PROFIT WAS REASONABLE IN THE CASE OF APPELLANT SPECIFICALLY KEEPING IN VIEW THE PROFIT MARGIN DECLARED BY THE APPELLANT AS PER ITS AUDITED BOOKS OF ACCOUNT AND A LSO KEEPING IN VIEW THAT THE APPELLANT HAS ONLY ACTED AS A SUB- CONTRACTOR. I FI ND FORCE IN THE SUBMISSION OF THE APPELLANT THAT IN THE COURSE OF SURVEY U/S 133A OF THE ACT NO EVIDENCE WAS FOUND THAT THE APPELLANT COMPANY WAS INFLATING THE EXPENSES TO REDUCE THE PROFIT MARGIN. FURTHER THE AO DID NOT POINT OUT ANY DEFECTS IN THE AUDITED BOOKS OF ACCOUNT PRODUCED BEFORE HIM. HE HAS ONLY MADE CERTAIN ADVERSE REMARKS ABOUT THE MAINTENANCE OF LABOUR REGISTER AND NON- PRODUCTION OF SOME DETAILS AND DO CUMENTS. ONLY FOR THESE COUNTS HE HAS REJECTED THE BOOKS OF ACCOUNT OF THE APPELLANT COMPANY THE ACTION WHICH HAS NOT BEEN CHALLENGED BY THE APPELLANT IN THE COURSE OF A PPELLATE PROCEEDINGS. IT IS WORTH- WHILE TO SEE THAT THE AO PRIOR TO ESTIMATION OF PRO FT AT 8% HAS STATED THAT TO ASSESS THE INCOME OF THE APPELLANT ITS NATURE OF BUSINESS ACTI VITIES CONDUCT AND : PAST HISTORY IS TO 4 IT(SS)A NOS. 44-46/K/2012 & 47-49/K/2012 ANUBHAV INFRASTRUCTURE LTD. & SILVER POINT INFRAT ECH LTD. BP 2008-09 TO 2010-11 BE CONSIDERED. HOWEVER WHILE ESTIMATING THE INCOME HE HAS NOT CONSIDERED THESE THINGS OTHERWISE THERE IS NO REASON THAT IN A CASE OF SUB-CONTRACTOR THE PROFIT COULD BE ESTIMATED AT 8%. THE COMPARABLE CASE DISCUSSED BY THE AO CANNOT BE COMPARED WITH THE CASE OF APPELLANT FOR THE REASONS ALREADY STATE D ABOVE AND THE PROVISIONS OF SECTION 44AD COULD ALSO NOT BE APPLIED IN ITS CASE BECAUSE THE TURNOVER OF THE APPELLANT COMPANY IS MORE THAN RS. 40 LAKHS. IN VIEW OF ABOVE IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN ESTIMATING THE PROFT @ 8% OF THE GROS S RECEIPT. HOWEVER I AM ALSO NOT INCLINED TO AGREE WITH THE SUBMISSION OF THE APPELL ANT THAT THE PROFIT SHOULD BE ESTIMATED @ 2% OF THE GROSS CONTRACTUAL RECEIPT. CONSIDERING THE TOTALITY OF THE FACTS I DIRECT THE AO ESTIMATE THE PROFIT @ 4% OF THE GRO SS CONTRACTUAL RECEIPT INSTEAD OF @ 8% AS DONE BY HIM. THE GROUND NO.2 IS PARTLY ALLOWE D. AGGRIEVED NOW REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM RECORDS THAT DURING THE YEAR UNDER CON SIDERATION NET PROFIT RATE DECLARED BY THE ASSESSEE WAS 0.67%. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT IS OBSERVED BY THE AO THAT THE GROSS CONTRACT RECEIPT WAS RS.5 01 05 398/- AN D THE COST OF CONTRACT SHOWN BY THE COMPANY WAS RS.4 92 62 877/-WHICH INCLUDE ONE OF THE MAJOR EXPENDITURE ON ACCOUNT OF LABOUR CHARGES. ON EXAMINATION OF THE LABOUR REGISTER THE AO WAS O F THE OPINION THAT IT WAS NOT MAINTAINED IN A CONVENTIONAL MANNER AS IT DID NOT CONTAIN THE SIG NATURE OR THUMB IMPRESSION OF ALL THE RECIPIENTS AND THE NAMES OF LABOURERS WERE WRITTEN REPEATEDLY. FURTHER ACCORDING TO THE AO THE ASSESSEE COMPANY PRODUCED ONLY THE COMPUTERIZED LEDGER ACCOUNT OF OTHER EXPENSES AND DID NOT PRODUCE THE BILLS/VOUCHERS IN SUPPORT OF IT S CLAIM. THE ASSESSEE COMPANY ALSO FAILED TO PRODUCE THE PARTY-WISE DETAILS OF MATERIALS PURCHAS ED AND ITS BILLS AND VOUCHERS. BY MAKING AFORESAID OBSERVATIONS THE AO REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPA NY BY INVOKING PROVISIONS OF SECTION 145 OF THE ACT TO ES TIMATE THE NET PROFIT OF THE ASSESSEE COMPANY. THE AO ALSO REPRODUCED THE FIGURES OF NET PROFIT FOR VARIOUS YEARS OF THE COMPARATIVE CASES. AS PER THE AO THE NET PROFIT IN THE CASE OF TANTIA CONSTRUCTONS LTD FROM A.Y. 2004- 05 TO A.Y. 2010-11 WAS IN THE RANGE OF 4.31% TO 7.67% AND THE AVERAGE NET PROFIT WAS 5.93%. IN THE CASE OF GPT INFRAPROJECTS LTD. THE NET PROFIT M ARGIN FROM A.Y. 2007-08 TO 2010-11 WAS IN THE RANGE OF 3.89% TO 10.62% AND THE AVERAGE WAS 6. 15%. SIMILARLY IN THE CASE OF ALLIED INFRASTRUCTURE & PROJECTS LTD. THE PROFIT FROM THE YEAR 2007-08 TO 2010-11 WAS RANGING FROM 4.30% TO 6.16% WITH THE AVERAGE NET PROFIT @ 5.19%. THE AO AFTER NARRATING THE COMPARATIVE CASES RELIED ON THE PROVISIONS OF SECTION 44AD OF THE ACT TO ESTIMATE THE INCOME IN THE HANDS OF THE ASSESSEE COMPANY. SINCE FOR THE YEAR UNDER CONSIDERATION THE GROSS TURNOVER WAS RS.5 01 05 398/- THE AO ESTIMATED THE NET PROFIT @ 8% BY RELYING PROVISIONS OF SECTION 44AD OF THE ACT AND DETERMINED NET PROFIT AT RS.40 08 43 2/-. 5 IT(SS)A NOS. 44-46/K/2012 & 47-49/K/2012 ANUBHAV INFRASTRUCTURE LTD. & SILVER POINT INFRAT ECH LTD. BP 2008-09 TO 2010-11 5. WE FIND THAT THE ASSESSEE COMPANY AS SUB-CONTRAC TOR TO EXECUTE THE CIVIL CONSTRUCTION WORKS AWARDED BY THE PRINCIPALS WHICH IS A SMALL P ART OF THE PROJECTS EXECUTED BY THE PRINCIPALS. ON THE CONTRACT RECEIPTS THE PRINCIPA LS HAD ALSO DEDUCTED THE TAX U/S.194C OF THE ACT. BESIDES THE ASSESSEE COMPANY IS ALSO ENGAGED IN THE BUSINESS OF TRADING OF SAREES. IT IS ALSO A FACT THAT THE ASSESSEE FILED DULY AUDITED PR OFIT AND LOSS ACCOUNT AND BALANCE SHEET ALONG WITH ITS ANNEXURE. IT ALSO PRODUCED THE AUDITED BOO KS OF ACCOUNT BILLS/VOUCHERS AND BANK STATEMENTS BEFORE THE AO AS ADMITTED BY HIM N THE ASSESSMENT ORDER. BESIDES IT FURTHER PRODUCED ALL THE DETAILS AND EXPLANATIONS CALLED FO R BY THE AO FROM TIME TO TIME. IT ALSO PRODUCED LABOUR REGISTERS BEFORE THE AO. HOWEVER H E WAS OF THE OPINION THAT THE SAID REGISTERS HAVE NOT BEEN MAINTAINED IN A CONVENTIONA L MANNER AND ACCORDING TO HIM THERE WERE NO SIGNATURES OR THUMB IMPRESSIONS OF ALL THE RECIP IENTS. BECAUSE OF THE AFORESAID OBSERVATIONS THE AO REJECTED THE AUDITED BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED THE NET PROFIT. THE AO GAVE THE EXAMPLES OF NET PROFIT EARNED BY THREE COMPANIES VIZ. TANTIA CONSTRUCTIONS LTD GPT INFRAPROJECTS LTD AND ALLIED INFRASTRUCTURE & PROJECTS LTD AND THEREAFTER HE RELIED ON THE PROVISIONS OF SECTION 44AD OF THE ACT AND ESTIMATED THE NET PROFIT @ 8% OF GROSS RECEIPTS. NOW BEFORE US LD. COUNSEL FOR THE ASSESSEE ARGUED THAT THE ESTIMATION OF NET PROFIT @ 8% BY RELYING ON PROVISI ONS OF SECTION 44AD OF THE ACT IS TOTALLY INCORRECT AND WITHOUT ANY BASIS FOR THE REASON THAT THE ASSESSEE COMPANY IS SUBCONTRACTOR AND ITS PROFT MARGIN IS LOW IN COMPARSON TO THE CONTR ACTORS. FURTHER THE AO HAS COMPARED THE PROFIT OF THE ASSESSEE WITH THE COMPANIES WHOSE TUR NOVER AND BUSINESS PARAPHERNALIA IS HUGE IN COMPARISON TO THE ASSESSEE COMPANY. FURTHER THE ASSESSEE COMPANY HAD EXECUTED THE PART OF WORK OF CIVIL CONSTRUCTION FOR THESE COMPANIES A ND THEREFORE IT IS NOT CORRECT TO COMPARE THE PROFIT OF THOSE COMPANIES WITH THE PROFIT MARGI N OF THE ASSESSEE. IN FACT THE PROFIT MARGIN OF THOSE COMPANIES IS ALSO LESS THAN THE MARGIN WHI CH HAS BEEN ESTIMATED BY THE AO IN THE CASE OF ASSESSEE. IN THE CASE OF ASSESSEE AS PER AU DITED BOOKS OF ACCOUNT THE NET PROFIT MARGIN FOR A.YS. 2007-08 2008-09 2009-10 AND 2010-11 WAS 1.94% 0.67% 0.20% AND 0.09% RESPECTIVELY. NOW BEFORE US LD. COUNSEL FOR THE A SSESSEE ARGUED THAT THE AO HAS FAILED TO APPRECIATE THAT THE PROFIT MARGINS OF CONTRACTORS A ND SUB-CONTRACTORS CANNOT BE SAME. IN THE ASSESSMENT ORDER HE HAS WORKED OUT THE AVERAGE PROF IT MARGINS IN THE CASE OF TANTIA CONSTRUCTIONS LTD GPT INFRAPROJECTS LTD. AND ALLI ED INFRASTRUCTURE & PROJECTS PVT. LTD AT 5.93% 6.15% AND 5.19% RESPECTIVELY AND IN THE CASE OF ASS ESSEE HE HAS ESTIMATED THE PROFIT @ 8% WHEREAS IN THE CASE OF ASSESSEE THE PROFIT MARGIN WOULD BE MUCH LESS THAN IN THESE COMPANIES BEING A SUB- CONTRACTOR OF THESE COMPANIE S. 6 IT(SS)A NOS. 44-46/K/2012 & 47-49/K/2012 ANUBHAV INFRASTRUCTURE LTD. & SILVER POINT INFRAT ECH LTD. BP 2008-09 TO 2010-11 6. IN VIEW OF THE ABOVE FACTUAL POSITION AND COMPAR ATIVE FIGURES GIVEN BY ASSESSEE COMPANY OF ITS PRINCIPAL WHEREIN THE NET PROFIT IS RANGING FROM 5.19% TO 6.15% WE ARE OF THE VIEW THAT DEFINITELY THERE WILL BE LOWER PROFIT IN THE CASE OF SUB CONTRACTOR I.E. THE ASSESSEE AND HENCE THE CIT(A) HAS RIGHTLY ESTIMATED THE NET PROFIT RATE AT 4%. ACCORDINGLY WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF REVEN UES APPEAL IS DISMISSED. 7. SIMILAR IS THE POSITION IN ALL THE ABOVE APPEALS HENCE TAKING A CONSISTENT VIEW WE UPHOLD THE ORDERS OF CIT(A) AND DISMISS THE APPEALS OF REVENUE. 8. IN THE RESULT APPEALS OF REVENUE ARE DISMISSED. 9. ORDER IS PRONOUNCED IN THE OPEN COURT ON 05.11.2 014. SD/- SD/- ! (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 5 TH NOVEMBER 2014 01 '2' 3 JD.(SR.P.S.) 4 .5 6 5)7- COPY OF THE ORDER FORWARDED TO: 1 . - / APPELLANT (I) M/S. SILVER POINT INFRATECH LTD. 26 5A ROOM NO. 3 B. T. ROAD MANASHI SUPER MARKET KOLKATA-70 0 036. (II) M/S. ANUBHAV INFRASTRUCTURE LTD. 59 RAJA NAB A KRISHNA STREET KOLKATA- 700 005. 2 ./ - / RESPONDENT DCIT CC.XIII KOLKATA. 3 . ' ( )/ THE CIT(A) KOLKATA 4. 5. ' / CIT KOLKATA 5=> .' / DR KOLKATA BENCHES KOLKATA /5 ./ TRUE COPY '?/ BY ORDER ' /ASSTT. REGISTRAR .