Law:

Section:

Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of profits - For estimating income of assessee, civil contractor, Assessing Officer applied net profit rate of 12.5 per cent as against 8.10 per cent applied by assessee - Commissioner reduced net profit rate to 10 per cent and Tribunal confirmed same - Whether no substantial question of law arose from Tribunal's order - Held, yes CASES REFERRED TO CIT v. Devi Prasad Vishwanath Prasad [1969] 72 ITR 194 (SC), CIT v. Nirmala Liquors [1988] 173 ITR 525 (Ker.) and Dy. CIT v.Marudhar Hotels (P.) Ltd. [2000] 245 ITR 138/[1999] 107 Taxman 452 (Raj.). Sandeep Bhandawat for the Appellant. Anjay Kothari for the Respondent. JUDGMENT 1. This is an appeal under section 260A of the Income-tax Act, 1961 ('the Act') directed against the judgment of the Tribunal, Jodhpur dated 24-11-2000. 2. We have heard Mr. Sandeep Bhandawat the learned counsel for the revenue and Mr. Anjay Kothari, for the respondent-assessee, for the purpose of admission of the appeal. 3. The respondent-assessee firm is a civil contractor. It filed return of receipt of Rs. 1,63,86,523 giving a net profit rate of 8.10 per cent. In view of various defects noticed in the books of account the Assessing Officer rejected the books results declared by the assessee and invoked the provisions of section 145 of the Act by applying the net profit rate of 12.5 per cent and made trading addition of Rs. 7,36,107. The Commissioner (Appeals), on appeal by the assessee reduced the net profit rate from 12.5 per cent to 10 per cent as in his opinion the estimated net profit rate of 12.5 per cent was excessive. On appeal by the department the Tribunal examined the issue with respect to estimate net profit in depth and detail, and confirmed the order of the Commissioner (Appeals). 4. It is contended by Mr. Bhandawat, the learned counsel for the department, that the Tribunal having held that the books of account were rightly rejected by the Assessing Officer which was confirmed by the Commissioner (Appeals) committed error in reducing the rate of net profit from 12.5 per cent to 10 per cent without assigning any good reasons. The learned counsel has…

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