COMMISSIONER OF INCOME TAX Vs. PRAN NATH GUPTA

JUDGEMENT

(1.) THE Tribunal, Chandigarh Bench, has referred the following question of law for opinion of this Court arising out of its

(2.) THE assessee was engaged in business of construction work as a contractor and claimed deduction on account of payments made to subcontractors. In the absence of evidence to substantiate the said payments, the AO made assessment by applying a net profit rate of 10 per cent, of the contract receipts, disallowing deduction of the amount said to have been paid by him to the sub -contractors. This view was upheld by the CIT(A) but the Tribunal upheld the claim of the assessee by observing that the assessee had maintained accounts of the sub -contractors in the books of account and had sought appointment of commission for examination of the sub -contractors, who were located at different stations. The Tribunal also followed its order in another case and also referred to the affidavits filed by the assessee that certain jobs had been assigned to the sub -contractors. The observations of the Tribunal are as under :

(3.) WE have heard learned counsel for the parties.