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M/s. Prashant Generator Co, 1401, Sector-06, Bahadurgarh. Vs. Income-tax Officer,Ward-3, Rohtak.
December, 12th 2012
            DELHI BENCH `F': NEW DELHI


                         Assessment Year : 2009-10

M/s. Prashant Generator Co,            Income-tax Officer,
1401, Sector-06, Bahadurgarh. Vs.      Ward-3, Rohtak.

                          I.T.A. No.2135/Del/2012
                         Assessment Year : 2009-10

Income-tax Officer,                   Shri Parshant Saini,
Ward-3, Rohtak.                 Vs.   Shop No.47, 2nd Floor,
                                      Pachim Vihar, Delhi.

                                      PAN : AQCPS6289B

  (Appellants)                               (Respondents)

                 Assessee by : Shri J.P. Pasricha, CA.
                 Department by : Shri Satpal Singh, Sr. DR.

                         Date of hearing : 10.12.2012
                 Date of pronouncement : 10.12.2012



      The assessee as well as the Revenue are aggrieved by the order dated

16th February, 2012, of the learned First Appellate Authority, Rohtak,

consequently, are in appeal before this Tribunal for Assessment Year 2009-
                                      2           ITA Nos.2109 & 2135/Del/2012

10. The assessee has challenged the application of 30% of profit of the

rental receipts whereas the Revenue supported the adoption of 70% from

generator sets.

2.    During hearing of these appeals we have heard Shri I.P. Pasricha,

learned counsel of the assessee and Shri Satpal Singh, learned Sr. DR. Both

sides are aggrieved from adoption of gross profit rate.          The crux of

arguments on behalf of the assessee is high rate of adoption i.e. 30% of the

total rental receipts whereas the Revenue is aggrieved in reduction of the

profit from 70% adopted by the learned Assessing Officer.

3.    We have considered the rival submissions and perused the material

available on record. Since the issue involved in both the appeals is identical,

the appeals were heard together, therefore, these are being disposed of by

this common order, for the sake of convenience. The facts in brief are that

the assessee Shri Parshant Saini is the proprietor of M/s. Prashant Generator

Company and is engaged in the business of hiring of generators/generator

parts to individuals/other companies. The assessee in the impugned year

declared gross total income of Rs.7,92,228/- and claimed TDS thereupon.

The case of the assessee was taken up for scrutiny. From the assessment

stage itself the assessee claimed that there was a dispute between the

Chartered Accountant and the assessee. To cut short the matter the AO
                                       3          ITA Nos.2109 & 2135/Del/2012

made certain additions/disallowances to the extent of 70% of the rental

receipts ignoring the submissions of the assessee. On appeal, the learned

CIT(A) adopted the estimation of profit at 30% of such gross receipts and

thus partly allowed the appeal. The assessee as well as the Revenue are

aggrieved from such adoption.       Before us the learned counsel for the

assessee asserted that for earlier assessment year (2007-08) the assessment

was framed at the profit of 7% of the gross receipts. To substantiate its

claim the learned counsel provided the copy of the assessment order. We

find that vide order dated 24th December, 2009 for A.Y. 2007-08 the

Assessing Officer adopted the net profit @ 7% of the gross receipts of

Rs.1,22,38,911/-. However, the books of accounts in the present assessment

year were rejected by the Assessing Officer being not reliable. Both sides

before us fairly agreed that a reasonable percentage of profit may be

adopted. Keeping in view the past history, material available on record,

rejection of books of accounts, we have no option but to estimate the net

profit as both the authorities have also adopted the net profit rate. Therefore,

we adopt the net profit @ 12% including net of depreciation to which both

parties agreed.   We are making it clear that this adoption is applicable to

the peculiar facts of the present assessment year only. Even otherwise, each
                                      4         ITA Nos.2109 & 2135/Del/2012

year is independent.    Finally, both the appeals are disposed of in the

aforesaid manner.

4.     Consequently both the appeals are partly allowed.

5.     This order was pronounced in the Open Court in the presence of the

learned representatives from both sides at the conclusion of the hearing on

10th December, 2012.

              Sd/-                               Sd/-
       ( B.C. MEENA)                        (JOGINDER SINGH)

Dated: 10th December, 2012.

Copy of the order forwarded to:-
  1. Appellant
  2. Respondent
  3. CIT
  4. CIT(A)
  5. DR                                     By Order

*mg                                   Deputy Registrar, ITAT.
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