1. IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR
BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND
SHRI N.K. SAINI, ACCOUNTANT MEMBER.
ITA No.433 /JU/2008
(A.Y. 2004-05)
The ACIT, Circle, Vs. M/s. Ganesh Builders,
Sriganganagar. 1-C-19, Jawahar Nagar,
Sriganganagar.
PAN No. AABFG 1354 Q
(Appellant) (Respondent)
Assessee by : Shri Suresh Ojha
Department By : Shri N.A. Joshi - D.R.
Date of hearing : 12/06/2014.
Date of pronouncement : 21/07/2014.
O R D E R
PER HARI OM MARATHA, J.M
This is an appeal by the department directed against the order
dated 28/03/2008 of ld. CIT(A), Jodhpur.
2. The following sole ground has been raised in this appeal:
“On the facts and in the circumstances of the case, the Ld.
CIT(A) has erred in directing to apply NP rate of 8.14% subject
to interest, remuneration to partners, depreciation and third

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party interest as against NP rate of 8% subject to interest and
remuneration to partners when provisions of section 1435 of
the I.T. Act, 1961 are clearly applicable.”
3. Briefly stated, the facts of the case are that the assessee is a
partnership firm deriving its income from execution of contract work
undertaken from Government department. The books of account were
rejected u/s 145(3) of the Income-tax Act, 1961 ['the Act', for short] and
net profit rate was applied. The Tribunal has also confirmed the
application of provisions of section 145(3) of the Act but the assessee had
claimed interest paid to third parties while estimating profit under this
section. This issue was stated to be covered by the decision of this very
Bench rendered in the case of M/s Ganesh Garhia Construction Co. Vs.
ACIT for A.Y. 2004-05 in ITA No. 430/JU/2008 which was also
corrected/rectified vide MA No. 04/JU/2011 vide order dated 02.05.2014.
Accordingly, the order passed by the Tribunal on 10.07.2009 in this case
was recalled and only to that extent the appeal was heard. The issue of
payment of interest to third parties being clearly covered by the Tribunal
order and their consistent view, we modify the order accordingly by
making observation that after invoking provisions of section 145(3) of the
Act in this case, interest paid to third parties is also allowable.

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Accordingly, result of the appeal shall remain same i.e. appeal shall be
partly allowed.
4. In the result, appeal of the department is partly allowed.
(Order Pronounced in the Court on 21st
July, 2014).
Sd/- Sd/-
(N.K.SAINI) (HARI OM MARATHA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated : 21st
July, 2014.
VL/-
Copy to:
1. The Appellant
2. The Respondent
3. The ld.CIT
4. The CIT(A)
5. The D.R
Assistant Registrar,
ITAT, Jodhpur.