The Dy. Commissioner of Income-tax, Srinagar V. M/s. Angu Interior Decorators, Srinagar (J&K)

CO 27/ASR/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9324 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Assessment record
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER C.O.NO.27(ASR)/2013 (ARISING OUT OF I.T.A. NO.249(ASR)/2012 ASSESSMENT YEAR: 2009-10 PAN :AAHFA4950E M/S. ANGU INTERIOR DECORATORS, VS. DEPUTY COMMI SSIONER OF INCOME TAX, INDUSTRIAL ESTATE, ZAINAKOTE, CIRCLE-3, SRINAGAR. SRINAGAR. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY: SH. TARSEM LAL, DR DATE OF HEARING:10/02/2014 DATE OF PRONOUNCEMENT:25/02/2014 ORDER PER BENCH ; THE ASSESSEE HAS FILED THE PRESENT CROSS OBJECTION AGAINST THE IMPUGNED ORDER DATED 14.02.2013, WHICH WAS PASSED B Y THE CIT(A), JAMMU FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING G ROUNDS: 1. THAT ALL THE DESIRED INFORMATION WAS PRODUCED B EFORE THE A.O. DURING THE ASSESSMENT PROCEEDING. 2. THAT REPLY TO THE QUESTIONNAIRE WAS GIVEN FULLY DURING THE ASSESSMENT PROCEEDINGS. C.O.NO.27(ASR)/2013 2 3. THAT THE COUNSEL OF THE ASSESSEE ATTENDED THE HE ARINGS FROM TIME TO TIME DURING THE ASSESSMENT PROCEEDINGS. 4. THAT THE A.O. APPLIED 10% OF THE NET PROFIT RATE OF GROSS CONTRACT WORK EXECUTED WITHOUT ANY BASIS. 5. THAT THE A.O. MADE BASELESS REMARKS IN ASSESSMEN T ORDER THAT NO RECORD WAS PROVIDED WHILE AS ASSESSEE PROVIDED B EFORE AO BOOKS OF ACCOUNTS, VOUCHERS, BILLS ETC. 6. THAT DURING THE APPELLATE PROCEEDINGS, CIT(A) C ALLED FOR RECORD FROM THE CONCERNED CIRCULE-3 & FOUND REPLY TO THE Q UESTIONNAIRE ALONGWITH THE DETAILS OF EXPENSES IN THE ASSESSMENT FILE OF THE ASSESSEE. 7. THAT WHILE GOING THROUGH THE ALL THE INFORMATION OF THE ASSESSEE, CIT(A) ARE RIGHTLY PARTLY ALLOWED THE APP EAL OF THE ASSESSEE. 2. NOTICE OF HEARING WAS ISSUED TO THE ASSESSEE BY RPAD BUT INSPITE OF THIS NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRES ENTATIVE APPEARED TO PROSECUTE THE MATTER NOR FILED ANY REQUEST FOR ADJO URNMENT OF THE CASE. BUT FROM THE RECORD, IT IS SEEN THAT THE ASSESSEE HAS F ILED A WRITTEN SUBMISSION IN THE PRESENT C.O. TO SUPPORT HIS CASE. WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WILL BE SERVED TO ISSUE NOTICE AGAIN AND AG AIN TO THE ASSESSEE. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, WE PROCEED TO DECIDE THE ISSUE IN DISPUTE EX-PARTE ASSESSEE AFTER HEARING THE LD. DR ON THE BASIS OF WRITTEN SUBMISSION FILED BY THE ASSESSEE. 3. THE LD. DR, RELIED UPON THE ORDER PASSED BY THE A.O. IN THE PRESENT CASE AND STATED THAT THE APPEAL FILED BY THE REVENU E HAS ALREADY BEEN C.O.NO.27(ASR)/2013 3 DECIDED BY THIS BENCH VIDE ORDER DATED 30.05.2013 B Y CONSIDERING THE REQUEST OF THE ASSESSEE INVOLVED IN THE PRESENT C.O . THEREFORE, THE C.O. IS NOT MAINTAINABLE AND DESERVES TO BE DISMISSED. 4. ON THE CONTRARY, IN THE WRITTEN SUBMISSION, THE ASSESSEE STATED THAT THE LD. FIRST APPELLATE AUTHORITY HAS WRONGLY APPLIED 6.50% OF THE GROSS RECEIPTS AS NET PROFIT OF THE ASSESSEE WITHOUT GIVING EFFEC T OF SALARY TO PARTNERS. THE ASSESSEE REQUESTED THAT THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY MAY BE MODIFIED AND THE RETURNED INCOME, AS FILED BY THE A SSESSEE MAY BE ACCEPTED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE IN THE PRESENT C .O. AS WELL AS THE ORDER PASSED BY THE REVENUE AUTHORITY ALONGWITH THE ORDER PASSED BY THIS BENCH DATED 30.05.2013 IN THE REVENUES APPEAL I.E. IN IT A NO.249(ASR)/2013 AGAINST THE IMPUGNED ORDER DATED 22.11.2012 PASSED BY THE LD. CIT(A), JAMMU. THEREFORE, WE FIND THAT WHILE DECIDING THE R EVENUES APPEAL AGAINST THE IMPUGNED ORDER OF CIT(A), JAMMU DATED 22.11.20 12, THE ASSESSEE REMAINED ABSENT IN THE REVENUE APPEAL AND EVEN DID NOT APPEAR BEFORE THIS BENCH AND THIS BENCH HAS PASSED THE FOLLOWING ORDER IN ITA NO.249(ASR)/2013 IN THE APPEAL OF THE REVENUE, WHIC H IS REPRODUCED FOR THE SAKE OF CONVENIENCE, AS UNDER: 8. WE HAVE HEARD LEARNED D.R. AND HAVE THOROUGHLY GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITY ALONG WI TH THE WRITTEN C.O.NO.27(ASR)/2013 4 SUBMISSION FILED BY THE AUTHORIZED REPRESENTATIVE O F THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT LEARNED FIRST APPEL LATE AUTHORITY HAS PASSED A WELL REASONED ORDER IN LIGHT OF THE VARIOU S DECISIONS IN WHICH FACTS & CIRCUMSTANCES ARE SIMILAR TO THE FACTS & CI RCUMSTANCES OF THE ASSESSEES CASE AND REDUCE THE NET PROFIT @ 6.5% ON ESTIMATE BASIS FROM THE NET PROFIT @ 10% ESTIMATED BY THE ASSESSIN G OFFICER. FOR THE SAKE OF CONVENIENCE, RELEVANT PORTION ON THE ISSUE IN DISPUTE I.E. PARA NOS. 4.1 TO 4.3 (PAGE NOS. 3 TO 4) OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER: 4.1 I HAVE CONSIDERED THE FINDINGS OF THE A.O. IN THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT BEFORE ME. THE A.O. HAS ESTIMATED THE INCOME AT 10% OF THE GROSS RECEIPT OF RS. 5,52, 87,258/- RELYING ON THE CASE LAW OF M/S SHIVAM CONSTRUCTION COMPANY VS. ACIT NOS. 383 & 384/2004, 622/2005, 385 & 386/2004 AND 7 28/2005 OF THE HON'BLE I.T.A.T., CHANDIGARH BENCH A, CHANDIG ARH WHERE THE INCOME FROM BUSINESS OF CONTRACT WAS DETERMINED @ 10% OF GROSS CONTRACTUAL RECEIPTS. THIS VIEW HAD BEEN UPHE LD BY THE HON'BLE PUNJAB & HARYANA HIGH COURT. THE NET PROFIT @ 10% OF GROSS CONTRACTUAL RECEIPTS IS ARRIVED AT RS. 55,28, 725/- AFTER REJECTING THE BOOKS OF ACCOUNT U/S 145(3). THE ARGU MENT OF THE A.O. IS THAT THE APPELLANT DID NOT SUBMIT COMPLETE REPLY TO THE QUESTIONNAIRE ALONG WITH THE BOOKS OF ACCOUNT. ON T HE DUE DATE OF DETAILS ASKED FOR WERE NOT WERE NOT FURNISHED HENCE THE ASSESSMENT WAS MADE ON BASIS OF ESTIMATION OF PROFIT. THE APPE LLANT ON THE OTHER HAND STATED THAT IT HAS SUBMITTED THE ENTIRE DETAILS ASKED FOR BY THE A.O. THE AR OF THE APPELLANT STATED THAT DES PITE THE FACT THAT QUESTIONNAIRE WERE REPLIED TO AND DETAILS FURNISHED THE A.O. PROCEEDED TO ASSESS INCOME ON ESTIMATE BASIS AT 10 % OF THE GROSS CONTRACTUAL RECEIPT. 4.2 DURING THE APPELLATE PROCEEDINGS AT THE CAMP OFFICE AT SRINAGAR, ASSESSMENT RECORD WAS CALLED FOR. IT IS SEEN THAT R EPLY TO QUESTIONNAIRE IS PLACED ON RECORD AND THE APPELLANT AT PAR-10 OF ITS REPLY HAS STATED THEREIN THAT ALL RECORDS ALONG WITH BILLS, VOUCHERS AND OTHER RELEVANT RECORDS WERE SUBMITTED FOR VERIFICATION. THE DETAILS OF EXPENSES WERE ALSO FOU ND PLACED ON RECORD. IT IS TRUE THAT ON DUE DATE OF FINAL HEARIN G THE APPELLANT DID NOT ATTEND AND PRODUCED THE BOOKS OF ACCOUNT. C.O.NO.27(ASR)/2013 5 4.3 IN ITS REPLY DATED 21.11.2012 THE APPELLANT HAS NOT CHALLENGED THE REJECTION OF BOOKS OF ACCOUNT U/S 145(3) HENCE NO D ISCUSSING IS NEEDED ON THE SAME. THE A.O. WHILE PASSING THE ASSE SSMENT ORDER HAS NOT ALLOWED DEDUCTION OF SALARIES TO PARTNERS F OR RS. 3,60,000/- INTEREST ON PARTNER CAPITAL RS. 4,56,165/- DEPRECIA TION ON FIXED ASSETS RS. 61,588/- AND SERVICE TAX RS. 46,63,904/- ETC. IF THESE EXPENDITURES ARE ALLOWED NET PROFIT WOULD COME DOWN SUBSTANTIAL. THE HON'BLE I.T.A.T., AMRITSAR IN THE CASE OF M/S C ONSTRUCTION ENGINEERS HAS APPLIED A NET PROFIT RATE OF 6.5% IN CASE OF CONTRACTORS WITHOUT ANY OTHER ALLOWANCE. THE CASE W AS ASSESSED U/S 144 OF I.T. ACT. IN THE PRESENT CASE ALSO INCOM E HAS BEEN ASSESSED ON ESTIMATION BASIS WHICH IS AKIN TO BEST JUDGMENT ASSESSMENT. KEEPING THE NATURE OF BUSINESS OF CONTR ACTS IN VIEW AND ABOVE CASE LAW THE PROFITS AT THE RATE OF 6.5% OF THE GROSS RECEIPT APPEAR JUSTIFIED. IN THE INTEREST OF JUSTIC E I, THEREFORE, DIRECT THE A.O. TO TAKE A PROFIT OF 6.5% ON CONTRACTUAL RE CEIPT OF RS. 55,28,7258/-. NO OTHER ALLOWANCES TO BE GIVEN AS DE DUCTION. THE PROFIT IS THUS ESTIMATED AT RS. 35,93,671/- INSTEAD OF RS. 55,48,791/-. REGARDING OTHER ADDITION OF INTEREST I NCOME OF RS. 20,066/- THE APPELLANT HAS NOT MENTIONED ANYTHING I N ITS SUBMISSION AND ALSO HAS NOT PRESSED THE GROUND. THE REFORE, NO INTERFERENCE IS CALLED FOR AND THE ADDITION IS CONF IRMED. 4.4 IN RESULT, APPEAL IS PARTLY ALLOWED. 9. KEEPING IN VIEW THE AFORESAID FINDINGS GIVEN BY LEARNED FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER AS WELL A S AFTER PERUSING THE WRITTEN SUBMISSION FILED BY THE ASSESSEE, WE AR E OF THE VIEW THAT NO INTERFERENCE IS CALLED IN THE WELL REASONED ORDE RED PASSED BY LEARNED FIRST APPELLATE AUTHORITY. ACCORDINGLY, WE UPHOLD THE IMPUGNED ORDER DATED 22.11.2012 PASSED BY LEARNED C IT(A), JAMMU, AND DISMISS THE APPEAL FILED BY THE REVENUE. 6. KEEPING IN VIEW THE AFORESAID DISCUSSIONS IN THE REVENUES APPEAL AGAINST WHICH THE PRESENT C.O. HAS BEEN FILED BY TH E ASSESSEE, WE ARE OF THE VIEW THAT WE HAVE CONSIDERED THE REQUEST OF THE ASS ESSEE WHILE UPHOLDING THE C.O.NO.27(ASR)/2013 6 ORDER OF THE LD. FIRST APPELLATE AUTHORITY ON THE I SSUE IN DISPUTE INVOLVED IN THE PRESENT C.O. AND DIRECT THE A.O. TO TAKE A PROF IT OF 6.5% ON CONTRACTUAL RECEIPTS OF RS.55,28,7258/-. NO OTHER ALLOWANCES TO BE GIVEN AS DEDUCTION. THEREFORE, WE ARE OF THE VIEW THAT THE REQUEST OF T HE ASSESSEE IN THE PRESENT C.O. DESERVES TO BE REJECTED BECAUSE WE HAVE ALREAD Y CONSIDERED THE SAME IN THE APPEAL OF THE REVENUE, AS PRODUCED HEREINABOVE. THEREFORE, THE PRESENT C.O. IS DISMISSED. 7. IN THE RESULT, THE C.O. FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH FEBRUARY, 2014. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25TH FEBRUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. ANGU INTERIOR DECORATORS, SRINAGA R. 2. THE DCIT, CIRCLE-3, SRINAGAR. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR