1 - . 13 2001 Income tax Appeal No of IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ----- - . 13 2001 Income tax Appeal No of : 20.7.2010 Date of decision / M s Padam Construction Company Bhatinda --- Appellant Versus The Assistant Commissioner of - , Income tax Bhatinda and another --- Respondents --- : . CORAM HON’BLE MR JUSTICE ADARSH KUMAR GOEL . HON’BLE MR JUSTICE AJAY KUMAR MITTAL --- : PRESENT . , Mr Akshay Bhan Advocate . for the appellant . , Ms Savita Saxena Advocate . for the respondent --- , . AJAY KUMAR MITTAL J The assessee has approached this Court under 260- - , 1961 ( “ Section A of the Income tax Act in short the 2 - . 13 2001 Income tax Appeal No of ) Act’ and prayed that the following substantial questions of , law arise in this appeal for the consideration of this Court - , from the order of the Income tax Appellate Tribunal Amritsar , , 14.9.1999, - Bench Amritsar passed on in Income tax Appeal . 1245( )-1991 1989-90: No ASR for the assessment year 1- Whether in the facts and circumstances of the , - , case the Income Tax Appellate Tribunal Amritsar , . . Bench Amritsar was justified in applying a net G P 9.25%? rate of 2- Whether the lower authorities were justified in 145(1) applying proviso to Section of the Income , ? Tax Act in the case of the assessee 3- -1 -3 Whether the impugned annexure A to A can ? be sustained in the eyes of law - The assessee appellant furnished its return . 6,00,540/- - declaring income of Rs by applying gross profit 8%. 143(1) rate of The return was processed under Section . of the Act and was subsequently selected for scrutiny The 143(3) , assessment was completed under Section of the Act 3 - . 13 2001 Income tax Appeal No of 25.1.1991 . 8,52,052/- vide order dated at an income of Rs . whereby the assessing officer made an addition of Rs 2,47,127/- 9.25%. by applying net profit rate at The - ( ) [( “ ( )] Commissioner of Income tax Appeal for short CIT A ” concurred with the view of the assessing officer in the matter - 9.25%, of application of gross profit rate of though it gave a . 20,596/- relief to the assessee in the sum of Rs observing that since sales tax formed part of trading receipt and as - such the sales tax paid by the assessee was required to be . reduced from the gross receipts It was found that the gross . 2,22,666/-, receipts would go down by Rs and the profit - 9.25% worked on that amount at gross profit rate of would . 20,596/-. come to Rs - , The Income tax AppellateTribunal Amritsar , ( “ ) Bench Amritsar for short the Tribunal” affirmed the findings , 14.9.1999. of the authorities below vide order dated We have heard learned counsel for the parties and . have perused the record 4 - . 13 2001 Income tax Appeal No of Learned counsel for the assessee submitted that - learned Tribunal had erred in upholding the gross profit rate 9.25% . of applied by the authorities below The counsel ( ) submitted that the CIT A while recording its concurrence to the view of the assessing officer had relied upon its decision , relating to the previous years and the Tribunal has ignored 23.11.1995 its own decision dated in the case of the present , assessee relating to previous three assessment years - 8% whereby the gross profit rate of had been held to be fair . and reasonable , The Tribunal while adjudicating the controversy raised by the assessee in the appeal and rejecting the , contention of the learned counsel for the assessee recorded : as under “9. On going through the orders of the lower , authorities the observation of which also could not , be challenged by the counsel of the assessee , during the course of arguments we find that in 5 - . 13 2001 Income tax Appeal No of , this case the assessee is not maintaining stock register of materials and no day to day record of - - . work in progress was kept by the assessee It ( ) has also been observed by the CIT A that the - vouchers were self prepared in respect of labour expenses and the same was not subject to any . , verification Hence we are of the opinion that in - - the absence of record of day to day work in , progress and stock registers of materials the expenses incurred by the assessee could not be - co related to the work done and hence the lower authorities were fully justified in applying the 145(1) , proviso to Section of the Income Tax Act 1961 . , in the case of the assessee Accordingly . the first point is decided in favour of the Revenue 10. , In the year under consideration the assessee . . 8% firm has disclosed G P rate of about whereas , . . on the other hand the learned A O after taking , into consideration the magnitude of the work 6 - . 13 2001 Income tax Appeal No of , scattered work of the assessee and also considering the plea of the assessee that due to , disturbed conditions in Punjab he has to suspend his work off and also after giving consideration to , . . the nature of business of the assessee the A O . . 9.25% applied the G P rate of and worked out the . income of the assessee 12. , ( ) In appeal the learned CIT A has upheld . . 9.25% - the G P rate of but reduced the gross . receipts on account of sales tax to the tune of Rs 2,22,666/- by treating as a trading receipt and in , . 20,596/- this manner granted a relief of Rs to . the assessee 13. , During the course of arguments this Bench has asked the assessee to work out the net profit 9.25% . . rate considering G P rate applied by the . , lower authorities To this the learned counsel for , , the assessee after working out the net profit rate replied that net profit in the case of the assessee 7 - . 13 2001 Income tax Appeal No of for the year under consideration would work out to 4.2% . . if we take into consideration the G P rate of 9.25% , as applied by the lower authorities in our . . 9.25% opinion the application of G P of by the lower authorities is already on a very low side and , so we are of the opinion that this application of 4.2% . . net profit rate of or application of G P rate 9.25% by the lower authorities in working out the , net income of the assessee is most reasonable . and fair and does not call for any interference , Hence we are of the opinion that in these facts , and the circumstances the lower authorities have already given sufficient relief to the assessee by . . 9.25% applying the G P rate of and hence no . , interference is called for from our side Accordingly this issue is disposed of by holding that the CIT ( ) . . A was justified in applying the G P rate of 9.25% . in the case of the assessee ” 8 - . 13 2001 Income tax Appeal No of Learned counsel for the appellant made strenuous effort to persuade this Court to take a view , different than the one taken by the Tribunal by urging that rejection of the books of accounts of the assessee and 9.25%, application of gross profit rate of was arbitrary and . without any basis Learned counsel sought to urge that this - Court on re appreciation of evidence may record a finding in . , , favour of the assessee He however could not point out any error of law or perversity in the findings recorded by the . authorities below , In view of the above we are of the opinion that no substantial question of law arises in this appeal for . adjudication by this Court The appeal is consequently . dismissed ( AJAY KUMAR ) MITTAL JUDGE ( ADARSH KUMAR ) GOEL 9 - . 13 2001 Income tax Appeal No of 20, 2010 July JUDGE * * rkmalik