COMMISSIONER OF INCOME TAX Vs. G.S. TIWARI

JUDGEMENT

(1.) The present appeal has been filed by the Department under Section 260A of the Income Tax Act, 1961 against the judgment and order dated 27.07.2007, passed by the Income-Tax Appellate Tribunal, Lucknow in ITA No. 323/Luc/2007 for the assessment year mentioned above.

(2.) On 15.01.2008, a coordinate Bench of this Hon'ble Court has admitted the appeal on the following substantial questions of law, reads as under:-

(3.) The brief facts of the case are that during the assessment year under consideration, the assessee carried on the business as contractor for civil work of Public Works Department, Nagar Palika and other Government Departments. The Assessing Officer (AO) had provided several opportunities to the assessee, but the assessee did not attend the proceedings, so the AO after issuing the notice, has passed the assessment order under Section 144, where he has made the addition pertaining to the sundry creditors to the tune of Rs.23,14,417/- by mentioning that the same were not verifiable on account of non submission of details, but the first appellate authority has deleted the addition by observing that since 8% net profit rate was estimated under Section 44AD, no separate addition could be made. The first appellate authority also reversed the findings of the Assessing Officer in taking the status of assessee as "AOP" instead of "RF". Being aggrieved, the Department has filed the appeal before the Tribunal, who vide its impugned order dated 27.07.2007 has upheld the finding of the first appellate authority regarding the application of net profit rate @ 8%; and deletion of disallowance of sundry creditors. Still not being satisfied, the Department has filed the present appeal.