JUDGMENT judgment of court was delivered by Dr. Satish Chandra J.-This appeal is filed by assessee against impugned order dated November 21, 2011, passed by Income-tax Appellate Tribunal, Agra, in I. T. A. No. 228/Agr/2010 for assessment year 2006-07. assessee has raised following substantial questions of law: "(a) Whether in view of fact that assessment order and Income- tax Appellate Tribunal record finding that it was first year of business of appellant, disallowance by Tribunal under section 40(a)(ia) for failure of appellant to comply with section 194C is sustainable in law? (b) Whether finding of Tribunal that there was no material to show it was first year of business or that monetary limit in preceding year had not been breached does not advert to detailed reasons recorded by Commissioner of Income-tax (Appeals) on issue is perverse and liable to be set aside? (c) Whether Income-tax Appellate Tribunal, having confirmed direction of Commissioner of Income-tax (Appeals) to compute income of appellant at 8 per cent. of net receipts, ought to delete addition of Rs. 2,74,88,625 as it was cost of material and labour supplied by main contractor and on which no liability to deduct tax could arise on appellant?" brief facts of case are that assessee is proprietor of business of sub-contractor for road construction. For assessment year under consideration, assessee has filed return by showing total income of Rs. 3,13,995 stating that he is working as sub-contractor for M/s. Gammon India Ltd. But Assessing Officer passed impugned order ex parte and assessed income of assessee at Rs. 29,88,132 by applying profit at 8 per cent. Further, Assessing Officer made disallowance pertaining to rent and labour, rent of machinery under section 40(a)(ia) by observing that no TDS has been deducted. first appellate authority has partly allowed appeal and gave substantial relief to assessee. Being aggrieved, Department has filed second appeal before Tribunal which was allowed by restoring disallowance of Rs. 3,23,00,625 made by Assessing Officer Being aggrieved, assessee has filed present appeal. With this background, heard Sri Rahul Agarwal, learned counsel for appellant-assessee, who submits that Assessing Officer has erred in presuming that books of account of assessee was not available with assessee hence he was not justified in taking profit on sub-contract work at 8 per cent. amounting to Rs. 29,88,132. He also submits that assessee is proprietor of business. receipts shown are part of turnover of main contractor and turnover of business of assessee is not exceeding monetary limit prescribed by section 44AB of Act. Tribunal has wrongly restored disallowance made by Assessing Officer. It is also submission of learned counsel for appellant that as per audit report, it was new business of assessee, as such, liability of assessee to deduct TDS under section 194C did not arise. Tribunal has overlooked fact that there was no liability to deduct TDS which was cost of material and labour supplied by main contractor as it was cost incurred by main contractor and not by assessee. He also submits that miscellaneous application is still pending before Tribunal. On other hand, Sri Dhananjay Awasthi, learned counsel for Department, has relied on order of Tribunal. He submits that assessee had declared net profit of Rs. 3,13,394 on total receipt of Rs. 98,63,056 which comes out to approximately 3.18 per cent., which is too low in peculiar facts and circumstances of case. books of account were rejected as per provisions of section 145(3) of Act. Pertaining to disallowance under section 40(a)(ia) of Act, he relied on ratio laid down in case of CIT v. Pradeshiya Industrial and Investment Corporation of U. P. Ltd. [2010] 325 ITR 583 (All). This case has already been discussed by lower authorities in their orders. documents pertaining to previous years were not put up by assessee before Assessing Officer so no benefit can be given to assessee pertaining to turnover in previous year. Lastly, he justified impugned order. After hearing both parties and on perusal of record, it appears that assessee is sub-contractor, as per agreement he was responsible for mixing of material on given portion of proposed road. He was supposed to perform following arrangements: (I) Arrangement for enough labour. (II) Arrangement for labour camp at site. (III) Transportation of material from GIL camp to site. (IV) Arranging machineries for laying and compacting GSB and WMM mixture. (V) Arrangement of generator for power. (VI) Arrangement of water for construction of road. (VII) Arrangement for security. From above, it appears that assessee was not responsible to purchase raw materials like sand, gitti, etc., and it was purchased by main contractor. Therefore, prima facie assessee was not responsible to deduct TDS. Regarding net profit rate, it appears that assessee has shown net profit rate at 3.18 per cent. But books of account were rejected so Assessing Officer has estimated profit at 8 per cent. and made addition. Tribunal upholds 8 per cent. net profit on total receipt of appellant. But raw material belongs to main contractor and not to assessee. Thus, there is contradiction about facts and same was not discussed in Tribunal's order. In case of Srichand Agarwala v. CIT [1984] 148 ITR 34 (Orissa), it was observed that material supplied by contractee cannot be taken into account. Similar jurisdictional High Court in case of CIT v. Haridas Kapoor and Co. [1989] 180 ITR 329 (All) observed that profit rate should be estimated with reference to net payment only after excluding cost of material supplied to assessee in terms of contract. Tribunal has ignored abovementioned factual as well as legal position. In other words, there is contradiction regarding facts recorded by lower authorities and same were not adjudicated by Tribunal properly. When it is so, then we set aside impugned order passed by Tribunal and restore matter, Tribunal is further directed to decide appeal afresh in light of above discussion and by providing reasonable opportunity to assessee who is permitted to raise all grounds afresh as per law at earliest preferably within period of three months after receiving certified copy of this order. In view of above, answer to proposed substantial questions of law is not required specially when we have restored matter back to Tribunal. In result, appeal filed by assessee is allowed for statistical purpose. *** Ravi Dubey v. Commissioner of Income-tax