Shri Bhagirath Khawa, JODHPUR V. ITO, JODHPUR

CO 23/JODH/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1245 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S L MAURYA
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.C. GUPTA G.C. GUPTA G.C. GUPTA G.C. GUPTA, , , , HONBLE HONBLE HONBLE HONBLE VICE VICE VICE VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI R.C. SHARMA R.C. SHARMA R.C. SHARMA R.C. SHARMA, , , , HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .269/JODH/2014 269/JODH/2014 269/JODH/2014 269/JODH/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(1), 1(1), 1(1), 1(1), JODHPUR. JODHPUR. JODHPUR. JODHPUR. VS. VS. VS. VS. SHR SHR SHR SHRI BHAGIRATH KHAWA, I BHAGIRATH KHAWA, I BHAGIRATH KHAWA, I BHAGIRATH KHAWA, PROP. M/S VISHNU CONSTRUCTION, PROP. M/S VISHNU CONSTRUCTION, PROP. M/S VISHNU CONSTRUCTION, PROP. M/S VISHNU CONSTRUCTION, 6 66 6- -- -B BB B- -- -108, KUDI BHAGTASNI, 108, KUDI BHAGTASNI, 108, KUDI BHAGTASNI, 108, KUDI BHAGTASNI, HOUSING BOARD, HOUSING BOARD, HOUSING BOARD, HOUSING BOARD, JODHPUR. JODHPUR. JODHPUR. JODHPUR. PAN : ABBPK6533E. PAN : ABBPK6533E. PAN : ABBPK6533E. PAN : ABBPK6533E. (APPELLANT) (RESPONDENT) CROSS CROSS CROSS CROSS- -- -OBJECTION OBJECTION OBJECTION OBJECTION NO. NO. NO. NO.23/JODH/2014 23/JODH/2014 23/JODH/2014 23/JODH/2014 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2009 2009 2009 2009- -- -10 1010 10 SHRI BHAGIRATH KHAWA, SHRI BHAGIRATH KHAWA, SHRI BHAGIRATH KHAWA, SHRI BHAGIRATH KHAWA, PROP. M/S V PROP. M/S V PROP. M/S V PROP. M/S VISHNU ISHNU ISHNU ISHNU CONSTRUCTION, CONSTRUCTION, CONSTRUCTION, CONSTRUCTION, 6 66 6- -- -B BB B- -- -108, KUDI BHAGTASNI, 108, KUDI BHAGTASNI, 108, KUDI BHAGTASNI, 108, KUDI BHAGTASNI, HOUSING BOARD, HOUSING BOARD, HOUSING BOARD, HOUSING BOARD, JODHPUR. JODHPUR. JODHPUR. JODHPUR. PAN : ABBPK6533E. PAN : ABBPK6533E. PAN : ABBPK6533E. PAN : ABBPK6533E. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(1), 1(1), 1(1), 1(1), JODHPUR. JODHPUR. JODHPUR. JODHPUR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI S.L. MAURYA, D.R. RESPONDENT BY : NONE. DATE OF HEARING : 03.09.2015 03.09.2015 03.09.2015 03.09.2015 DATE OF PRONOUNCEMENT: 04.09.2015 04.09.2015 04.09.2015 04.09.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT : :: : THE APPEAL BY THE REVENUE AND THE CROSS-OBJECTION BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10 ARE DIRECT ED AGAINST THE ITA-269/JODH/2014 & CO-23/JODH/2014 2 ORDER OF LEARNED CIT(A), JODHPUR DATED 28 TH FEBRUARY, 2014. THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE AND, THEREFORE, THE APPEAL OF THE REVENUE AND THE C ROSS-OBJECTION OF THE ASSESSEE ARE BEING DISPOSED OF EX PARTE QUA THE ASSESSEE ON MERITS AFTER HEARING THE LEARNED DR. ITA NO.269/JODH/2014 ITA NO.269/JODH/2014 ITA NO.269/JODH/2014 ITA NO.269/JODH/2014 REVENUES APPEAL : REVENUES APPEAL : REVENUES APPEAL : REVENUES APPEAL :- -- - 3. THE GROUNDS OF APPEAL OF THE REVENUE READ AS UND ER:- 1. THE LD.CIT(A) HAS ERRED ON FACTS AND IN CIRCUMSTANCES OF THE CASE IN RESTRICTING THE TRADIN G ADDITION FROM RS.15,00,000/- TO RS.2,00,000/- IGNOR ING THE FACT THAT THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS AS WELL AS VOUCHERS. 2. THE LD.CIT(A) HAS ERRED ON FACTS AND IN CIRCUMSTANCES OF THE CASE IN HOLDING THAT ONCE THE TRADING ADDITION ON LUMP SUM BASIS IS MADE, NO SCOP E FOR MAKING SEPARATE DISALLOWANCE OUT OF EXPENSES TO THE TUNE OF RS.8,23,336/- REMAINS IGNORING THE FACT THE ASSESSEE FAILED TO PRODUCE BILLS/VOUCHERS OF ANY OF THESE EXPENSES. 4. LEARNED DR SUBMITTED THAT THE ASSESSEE HAS BEEN NON- COOPERATIVE RIGHT FROM THE BEGINNING AND EX PARTE A SSESSMENT ORDER HAD TO BE FRAMED IN THIS CASE U/S 144 OF THE INCOME -TAX ACT, 1961. HE SUBMITTED THAT THE ASSESSEE HAS NOT APPEARED BEFORE THE TRIBUNAL ALSO AND THIS SHOWS HIS CASUAL ATTITUDE TOWARDS THE AUTH ORITIES. HE SUBMITTED THAT THE ASSESSING OFFICER HAS RECORDED A FINDING THAT THE ASSESSEE HAS NOT PRODUCED THE ACCOUNT BOOKS BEFORE HIM AND HAS ALSO FAILED TO PRODUCE BILLS, VOUCHERS, CONFIRMATION OF ACCOUNTS ETC. HE SUBMITTED THAT THE ASSESSEE IS AN INDIVIDUAL DERIVI NG INCOME FROM CONSTRUCTION WORK AND LEARNED CIT(A) HAS GROSSLY ER RED IN SUSTAINING ITA-269/JODH/2014 & CO-23/JODH/2014 3 THE TRADING ADDITION OF `2 LAKHS ONLY AS AGAINST `1 5 LAKHS MADE BY THE ASSESSING OFFICER APART FROM DISALLOWANCE OF `8.23 LAKHS OUT OF EXPENSES MADE BY THE ASSESSING OFFICER AND DELETED BY THE LEARNED CIT(A). HE RELIED ON THE ORDER OF THE ASSESSING OF FICER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT DUE TO NON-COOPERATION OF THE ASSESSEE, T HE ASSESSMENT IN THIS CASE WAS FRAMED U/S 144 OF THE ACT. THE ASSES SING OFFICER HAS GIVEN A NUMBER OF OPPORTUNITIES TO THE ASSESSEE TO PLEAD ITS CASE AND PRODUCE ITS ACCOUNT BOOKS AND SUPPORTING VOUCHERS. THE ASSESSEE HAS FAILED TO COMPLY WITH THE SAME. BEFORE THE TRIBUNA L ALSO, THE ASSESSEE HAS CHOSEN NOT TO APPEAR. WE FIND THAT THE ASSESSE E IS AN INDIVIDUAL DERIVING INCOME FROM CONSTRUCTION WORK UNDER THE NA ME AND STYLE VISHNU CONSTRUCTION COMPANY. THE TOTAL RECEIPTS OF THE ASSESSEE DECLARED DURING THE YEAR AMOUNTS TO `3.06 CRORES ON WHICH THE ASSESSEE HAS DECLARED A GROSS PROFIT OF 12.22% AS A GAINST THE TURNOVER OF `2.59 CRORES GIVING A GROSS PROFIT RATE OF 12.05 % IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. WE FIND THAT THE NET RE TURNED INCOME OF THE ASSESSEE COMES TO `9,82,871/- WHICH IS ABOUT 3% OF THE TOTAL RECEIPTS OF THE ASSESSEE DURING THE YEAR. WE FIND THAT NO COGENT REASON HAS BEEN GIVEN BY THE LEARNED CIT(A) TO REDU CE THE TRADING ADDITION FROM `15 LAKHS TO `2 LAKHS ONLY. THE DISA LLOWANCE OUT OF EXPENSES HAS ALSO BEEN DELETED BY THE LEARNED CIT(A ). THE ONLY REASON GIVEN BY THE CIT(A) FOR DELETING THE ADDITIO N WAS THAT THE PAST HISTORY OF THE ASSESSEE TAKES PREFERENCE OVER A COM PARABLE CASE. WE ARE OF THE VIEW THAT NO COMPARABLE CASE HAS BEEN GI VEN BY THE LEARNED CIT(A) WHILE GIVING SUBSTANTIAL RELIEF TO THE ASSES SEE. THE CASE OF THE ASSESSEE IS A CASE WHERE AUDIT WAS COMPULSORY AND T HE ASSESSEE HAS FILED THE AUDIT REPORT. INSPITE OF ITS AUDITED ACC OUNTS, IT HAS FAILED TO ITA-269/JODH/2014 & CO-23/JODH/2014 4 PRODUCE ANY ACCOUNT BOOKS, OR SUPPORTING BILLS, VOU CHERS OR CONFIRMATION OF ACCOUNTS ETC. IN THESE FACTS OF TH E CASE, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) HAS RIGHTLY OBSERVED T HAT THE ACCOUNT BOOKS OF THE ASSESSEE WERE RIGHTLY REJECTED AND THA T AFTER REJECTION OF BOOKS OF ACCOUNT, THE ESTIMATION OF NET PROFIT WAS INEVITABLE. HOWEVER, WE FIND THAT INSTEAD OF APPLYING A NET PROFIT RATE NET PROFIT RATE NET PROFIT RATE NET PROFIT RATE, LEARNED CIT(A) HAS CONSIDERED THE GROSS PROFIT RATE AND SUSTAINED AN A DDITION OF `2 LAKHS. WE ARE OF THE CONSIDERED VIEW THAT SINCE THE BOOKS OF ACCOUNT WERE RIGHTLY REJECTED BY THE ASSESSING OFFICER, THE NET PROFIT RATE WAS APPLICABLE TO THE CASE OF THE ASSESSEE AND CONSIDER ING THE LINE OF TRADE OF THE ASSESSEE OF CONSTRUCTION WORK, IT SHALL BE R EASONABLE TO APPLY A NET PROFIT RATE OF 5% (FIVE PERCENT) TO THE TOTAL R ECEIPTS OF `3,06,83,297/- DECLARED BY THE ASSESSEE AND WE DIRE CT THE ASSESSING OFFICER TO WORK OUT THE ASSESSED INCOME ACCORDINGLY . SINCE WE HAVE APPLIED A NET PROFIT RATE OF 5% ON THE TOTAL RECEIP TS OF THE ASSESSEE, THE INCOME SO DETERMINED SHALL INCLUDE THE RETURNED INC OME OF THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS AND NO SEPARATE DISALLOWANCE OUT OF EXPENSES BE MADE. ACCORDINGLY, THE GROUNDS OF APPEAL OF THE REVENUE ARE PARTLY ALLOWED. ASSESSEES ASSESSEES ASSESSEES ASSESSEES CROSS CROSS CROSS CROSS- -- -OBJECTION NO.23/JODH/2014 : OBJECTION NO.23/JODH/2014 : OBJECTION NO.23/JODH/2014 : OBJECTION NO.23/JODH/2014 :- -- - 6. THE ONLY GROUND OF THE CROSS-OBJECTION OF THE AS SESSEE READS AS UNDER:- THAT THE LEARNED COMMISSIONER OF APPEALS HAS GROSS LY ERRED IN CONFIRMING THE TRADING ADDITION OF RS.2,00,000.00 WITHOUT ASSIGNING ANY COGENT REASON AND BASIS AND WITHOUT APPRECIATING THE STATEMENT OF ASSESSEE. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). IN ITA-269/JODH/2014 & CO-23/JODH/2014 5 VIEW OF OUR ALLOWING THE APPEAL OF THE REVENUE FOR THE RELEVANT ASSESSMENT YEAR IN PART WHILE DISPOSING OF THE REVE NUES APPEAL IN ITA NO.269/JODH/2014 IN THE FOREGOING PARAGRAPHS OF THI S ORDER, WE HOLD THAT THE GROUND OF THE CROSS-OBJECTION OF THE ASSES SEE BECOMES INFRUCTUOUS AND IS, ACCORDINGLY, DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED AND THE CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 04.09.2015 . SD/- SD/- ( (( (R.C. SHARMA R.C. SHARMA R.C. SHARMA R.C. SHARMA) )) ) (G. (G. (G. (G.C. GUPTA C. GUPTA C. GUPTA C. GUPTA) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. REVENUE : INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD- -- -1(1), JODHPUR. 1(1), JODHPUR. 1(1), JODHPUR. 1(1), JODHPUR. 2. ASSESSEE : SHRI BHAGIRATH KHAWA, SHRI BHAGIRATH KHAWA, SHRI BHAGIRATH KHAWA, SHRI BHAGIRATH KHAWA, PROP. M/S VISHNU CONSTRUCTION, PROP. M/S VISHNU CONSTRUCTION, PROP. M/S VISHNU CONSTRUCTION, PROP. M/S VISHNU CONSTRUCTION, 6 66 6- -- -B BB B- -- -108, KUDI BHAGTASNI, HOUSING BOA 108, KUDI BHAGTASNI, HOUSING BOA 108, KUDI BHAGTASNI, HOUSING BOA 108, KUDI BHAGTASNI, HOUSING BOARD, RD, RD, RD, JODHPUR. JODHPUR. JODHPUR. JODHPUR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR