DCIT, CIR-10(2), KOLKATA, KOLKATA vs. M/S SKYSCRAPER PROJECTS PVT. LTD., KOLKATA

The delay in filing of this appeal is 3 days. In the course of hearing, the Revenue was asked to give reasons for such delay and the same were duly appraised by the ld. DR and the same are found to be reasonable. We therefore, condone the delay and admit the appeal for adjudication.

The revenue has raised the following grounds of appeal:

Assessment year: 2007-08 M/s Skyscraper Projects Pvt. Ltd “1. That the ld. CIT(A) has erred in law as well as fact by deleting the addition of Rs.1,80,49,756/- made on account of estimation of profit on civil construction business.

Brief facts of the case are that the assessee is private limited company and engaged in the business of civil construction, labour suppliers. Income of Rs.70,12,309/- declared in the return of income filed on 30.10.2008 for assessment year 2007-08. Return processed u/s 143(1) of the Act. Thereafter, notice u/s 148 of the Act was issued for reopening the assessment after duly recording the reasons. Reassessment proceedings were concluded after accepting profit of civil construction @8% based on the past records from A.Y 2010-11 to 2012-13 and as against the net profit of Rs.70,12,309/- declared by the assessee, the ld. Assessing Officer computed the income of Rs.1,80,49,756/- thereby making an addition of Rs.11037447/- on account of estimated net profit. The ld. Assessing Officer also made an addition for unsecured loan u/s 68 of the Act at Rs.2,60,000/-. Income assessed at Rs.183,07,960/-.

Aggrieved, assessee preferred appeal before the ld. CIT(A) and succeeded.

Now, the Revenue is in appeal before this Tribunal. The ld. DR vehemently argued supporting the order of the Assessing Officer. On the other hand, there is no representation on behalf of the assessee even though sufficient opportunity has been provided on multiple occasions.

We have heard the ld. DR and perused the records placed before us. The findings of the ld. CIT(A) deleting the addition made by the Assessing Officer on account of estimation of profit in civil Assessment year: 2007-08 M/s Skyscraper Projects Pvt. Ltd construction business carried by the assessee is in dispute before us. We notice that in the grounds of appeal, the Revenue has stated the figure of addition of Rs.1,80,49,756/-. We however find that this figure is not correct since the assessee has disclosed a total income of Rs.70,12,309/- and the Assessing Officer has estimated the profit @8% of total turnover of Rs.22.56 crores, thereby arriving at a estimated profit of Rs.180,49,756/-. Therefore, effective addition made on account of estimated net profit is only Rs.11037447/-. Now, as regards the Revenue’s grievance ld. CIT(A) erred in deleting the said addition of estimated profit made by the Assessing Officer, we notice that the ld. CIT(A) after referring to plethora of judgments allowed the assessee’s appeal observing as follows:

From the perusal of the above finding, we notice that the ld. CIT(A) has mentioned that the assessment has not been completed u/s 144 of the Act, the ld. Assessing Officer has not given any basis for estimating the profits, the ld. Assessing Officer has not discussed about any comparables/past history and nor has pointed out any Assessment year: 2007-08 M/s Skyscraper Projects Pvt. Ltd defect in the books. We failed to find any merit in the findings of the ld. CIT(A) since the ld. Assessing Officer has called for necessary details from the assessee and there is regular appearance of the authorized representative from assessee’s side and various details have been filed. The ld. Assessing Officer has referred to the requests made by the authorized representative of the assessee for estimating the net profit @8% which has been applied in the assessee’s case for assessment years 2010-11, 2011-12 and 2012-13. The ld. Assessing Officer keeping in mind the same yardstick referred to the submissions filed by the assessee and has computed the net profit @8%. Reopening the assessment has not been disputed by the assessee by filing any grounds of appeal