UMIYA CONSTRUCTION, MUMBAI V. ACIT 25(3), MUMBAI

CO 93/MUM/2013

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0110 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 03-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Keywords: Agreed addition
• Section: 143(3); 145

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.6415//MUM/2010 (AY: 2007-08) THE ACIT -25(3) C-11, R.NO.308 BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI. / VS. M/S. UMIYA CONSTRUCTION 2B, GOPAL KUNJ S.N. ROAD, KANDIVALI(W) MUMBAI-400 067. ( !' / // / APPELLANT) ( # $!' / RESPONDENT) P.A. NO.AAAFU 1010 A C.O. NO.93/MUM/2013 ARISING OUT OF ITA NO.6415//MUM/2010 (AY: 2007-08) M/S. UMIYA CONSTRUCTION 2B, GOPAL KUNJ S.N. ROAD, KANDIVALI(W) MUMBAI-400 067. / VS. THE ACIT -25(3) C-11, R.NO.308 BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI. (CROSS OBJECTOR) ( #$!' / RESPONDENT) P.A. NO.AAAFU 1010 A !' % & % & % & % & /DEPARTMENT BY : SHRI PAWAN KUMAR B EE RLA #$!' % & % & % & % & /ASSESSEE BY : NONE % '( / / / / DATE OF HEARING : 24.11.2014 )*+ % '( / DATE OF PRONOUNCEMENT : 26.11.2014 ITA NO.6415 & CO 93/MUM/2010 & 13 UMIYA CONSTRUCTION 2 , , , , / / / / O R D E R PER JOGINDER SINGH (JM) : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DA TED 30/06/2010 PASSED BY THE LD. CIT(A) FOR THE AY 2007 -08. THE ASSESSEE HAS ALSO RAISED CROSS OBJECTION AGAINST THE ORDER O F THE LD. FIRST APPELLATE AUTHORITY. 2. DURING HEARING NOBODY REPRESENTED THE ASSESSEE I NSPITE OF THE FACT THAT ON EARLIER OCCASION THE ASSESSEE SOUG HT ADJOURNMENT. THEREFORE WE HAVE NO OPTION BUT TO PROCEED EX-PARTE QUA THE ASSESSEE AND TEND TO DISPOSE OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD. DR, SHRI PAWAN KUMAR BEERLA, STRON GLY DEFENDED THE ASSESSMENT ORDER AND ADVANCED HIS ARGUMENTS WHICH I S IDENTICAL TO THE GROUND RAISED. 2.1 WE HAVE CONSIDERED THE SUBMISSIONS PUT FORTH BY THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE F ACTS IN BRIEF ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION DECLARED INCOME OF RS.11,83,740/- IN I TS RETURN FILED ON 29/10/2007, ACCOMPANIED BY P&L ACCOUNT, AUDITED STA TEMENT OF ACCOUNTS AND TAX AUDIT REPORT U/S. 44AB OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT DETERMINING THE TO TAL INCOME AT RS.66,07,805/-. DURING ASSESSMENT PROCEEDINGS IT WA S NOTED BY THE ITA NO.6415 & CO 93/MUM/2010 & 13 UMIYA CONSTRUCTION 3 ASSESSING OFFICER THAT THE ASSESSEE PURCHASED CONST RUCTION MATERIAL FROM M/S. VISHAL TRADERS AND M/S.PIYUSH SAND AGENCY. THE ASSESSING OFFICER RECORDED THE STATEMENT OF ONE VISHAL BIPIN CHANDRA SAHA, PROPRIETOR OF M/S. VISHAL TRADERS ON 4/9/2009 AND F URTHER FOUND THAT HIS FATHER WAS PROPRIETOR OF M/S. PIYUSH SAND AGENC Y. HE FURTHER NOTED THAT THE BILLS RAISED BY BOTH THE PARTIES WERE WRIT TEN BY ONE PERSONA AND HAVING OVER- WRITING ADDING UMIYA CONSTRUCTION. THE ASSESSEE EXPLAINED THAT THE PURCHASES FROM M/S. VISHAL TRADERS AT RS.2 ,18,234/- WAS ALREADY CONFIRMED BY THE PROPRIETOR AND THERE WAS N O REASON TO DISALLOW THE PURCHASES. FINALLY, BASED ON THE STATEMENT, THE NET PROFIT WAS WORKED OUT TO RS. 30% DETERMINING THE INCOME AT RS. 66,07,810/- ON THE CONTRACT RECEIPT OF RS.1,93,14,480/-. ON APPEAL, TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE TOTALITY OF FAC TS AND HELD THAT THE PROFIT IN ANY CASE CANNOT BE MORE THAN 19%. THE REL EVANT PORTION FROM THE IMPUGNED ORDER IS REPRODUCED HEREUNDER :- 4.4 I HAVE CONSIDERED THE SUBMISSIONS OF THE REPRESENTATIVE AND THE STAND TAKEN BY THE A.O. IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT GIVEN JUSTIFICATION FOR ADDITION OF RS.2,18,234/- REPRESENTING PURCHASES FROM M/S. VISHAL TRADERS WHEN MR.VISHAL B SHAH APPEARED BEFORE THE AO, AND CONFIRMED THE SUPPLY OF MATERIAL TO THE APPELLANT IN RESPONSE TO THE SHOWCAUSE NOTICE. THE AO HAS NOT DEALT WITH THIS OBJECTION IN THE ASSESSMENT ORDER. HE HAS ONLY DEALT WITH THE OBJECTION OF THE APPELLANT RELATING TO DISALLOWANCE OF PURCHASES FROM M/S,PIYUSH ITA NO.6415 & CO 93/MUM/2010 & 13 UMIYA CONSTRUCTION 4 SAND AGENCY AND FINALLY ADDED PURCHASES FROM M/S.PADMAVATI TRANSPORT ALSO AT THE END OF THE DISCUSSION. AS RIGHTLY CONTENDED BY THE REPRESENTATIVE, STATEMENT RECORDED FROM SON WOULD NOT EMPOWER THE AO TO MAKE ADDITION IN RESPECT OF PURCHASES FROM FATHER. THE FATHER WAS NOT SUMMONED FOR EXAMINATION. FURTHER AS CONTENDED BY THE REPRESENTATIVE THE APPELLANT FILED CONFIRMATION OF ACCOUNT FROM SHRI BIPIN POPATLAL SHAH WHICH IS NOT DISPUTED BY THE AO. FURTHER IT IS SEEN THAT ALL THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES WHICH WERE CLEARED THROUGH BANK ACCOUNT EVEN OTHERWISE WITH THE AGREED ADDITION OF RS.18,56,987/- TOWARDS PURCHASE OF STEEL FROM M/S.MANJU ENTERPRISES, THE NET PROFIT OF THE APPELLANT WORKS OUT TO 19.21% AND EVEN ASSUMING THAT THE BOOKS OF ACCOUNT WERE INCORRECT OR INCOMPLETE, THE AO COULD HAVE ONLY APPLIED SECTION 145 AND DETERMINED THE NET PROFIT AT AN APPROPRIATE RATE AND WHEN THE PROFIT I S ALREADY MORE THAN 19%, THERE IS NO REASON FOR MAKING FURTHER ADDITION. IN THE CIRCUMSTANCES, THE ADDITION IN RESPECT OF PURCHASES FROM M/S.VISHAL TRADERS (RS.2,18,234), M/S.PIYUSH SAND AGENCY (RS.11,26,045) AND M/S.PADMAVATI TRANSPORT (RS.2,78,590) ARE DELETED. 4.4.1 IN RESPECT OF PURCHASES FROM M/S. ANNAPURNA CONSTRUCTION, IT IS SEEN FROM THE REPLY OF THE APPELLANT TO THE SHOWCASE NOTICE ISSUED BY THE AO THAT M/S. ANNAPURNA CONSTRUCTION FILED HIS REPLY ON 25.08.2009 DULY SIGNED BY THE PROPRIETOR WHICH IS NOT DISPUTED BY T HE AO. THE CLAIM OF THE APPELLANT THAT SHRI SURESH S. PATEL ATTENDED PERSONALLY WITH THE ACCOUNTANT BUT THE AO DID NOT RECORD HIS STATEMENT IS ALSO NOT DISPUTED EXCEPT STATING THAT THE APPELLANT DID NOT PRODUCE THE PROPRIETOR. IT IS ALSO NOT IN DISPUTE THAT A COPY OF INCOME-TAX RETURN AND BANK STATEMENT OF M/S. ANNAPURNA CONSTRUCTION WAS ALSO FILED BEFORE THE A.O. WITH THE ABOVE EVIDENCES ALREADY FILED BEFORE THE AO, THERE IS NO ITA NO.6415 & CO 93/MUM/2010 & 13 UMIYA CONSTRUCTION 5 CASE FOR ADDITION MERELY BECAUSE THE APPELLANT DID NOT PRODUCE MR. SURESH S. PATEL BUT HE APPEARED ON HIS OWN ALONGWTH HIS ACCOUNTANT AND THERE WAS CHANGE OF ADDRESS. IN FACT, A COPY OF BANK STATEMENT OF M/S. ANNAPURNA CONSTRUCTION WAS FILED BEFORE THE A.O. BY LETTER DATED 24.08.2009 AND IT IS NOTICED THAT THE ACCOUNT PAYEE CHEQUES ISSUED BY THE APPELLANT WERE CLEARED IN THE ABOVE BANK ACCOUNT. IN THE CIRCUMSTANCES, THERE IS NO REASON TO DOUBT THE PURCHASES FROM THE ABOVE PARTIES. EVEN OTHERWISE. AS ALREADY DISCUSSED, WITH THE AGREED ADDITION OF RS.18,56,987/-, THE NET PROFIT OF THE APPELLANT WORKS TO MORE THAN 19% AND THERE IS NO JUSTIFICATION FOR FURTHER ADDITION. EVEN ASSUMING THAT THE BOOKS OF ACCOUNT OF THE APPELLANT ARE INCOMPLETE OR INCORRECT, THE A.O, COULD HAVE REJECTED THE BOOKS OF ACCOUNT AND ONLY ESTIMATED THE INCOME OF THE APPELLANT WHICH COULD NOT BE IN ANY CASE MORE THAN 19%.IN THE CIRCUMSTANCES, THE ADDITION OF RS.19,44,212/- IN RESPECT OF M/S. ANNAPURNA CONSTRUCTION IS UNJUSTIFIED AND THE SAME IS DELETED. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDE R, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD AND THE ASSERTIONS MADE BY THE LD. DR, IF, KEPT IN JUXTAPOSITION AND A NALYZED, WE FIND THAT NO JUSTIFICATION HAS BEEN MENTIONED IN THE ASSESSME NT ORDER BY THE ASSESSING OFFICER FOR MAKING THE ADDITION OF RS.2, 18,234/-, WHEN MR. VISHAL B. SHAH, IN RESPONSE TO SHOWCAUSE NOTICE, CON FIRMED THE SUPPLY OF MATERIAL TO THE ASSESSEE. THE ADDITION IS MERELY BASED UPON THE STATEMENT OF THE SON WITHOUT EXAMINING THE FATHER A ND MORE SPECIFICALLY WHEN ALL THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CH EQUES. EVEN ITA NO.6415 & CO 93/MUM/2010 & 13 UMIYA CONSTRUCTION 6 OTHERWISE IF IT IS ASSUMED THAT THE BOOKS OF ACCOUN TS WERE INCORRECT/INCOMPLETE THE ASSESSING OFFICER WAS EXPE CTED TO APPLY SECTION 145 OF THE ACT AND DETERMINE THE NET PROFIT AT AN A PPROPRIATE RATE, THUS, THERE WAS NO REASON FOR MAKING THE FURTHER ADDITION . SO FAR AS, THE PURCHASES FROM M/S. ANNAPURNA CONSTRUCTION ARE CONC ERNED, REPLY DATED 25/8/2009 WAS FILED, DULY SIGNED BY THE PROPR IETOR, WHICH IS NOT CONTROVERTED BY THE REVENUE . IT IS ALSO NOTED THAT SHRI SURESH S. PATEL PERSONALLY ATTENDED THE PROCEEDINGS ALONG WITH THE ATTENDANT, BUT, THEIR STATEMENT WAS NOT RECORDED, WHEREIN, THE COPY OF ST ATEMENT OF M/S. ANNAPURNA CONSTRUCTION AND INCOME TAX RETURN WERE F ILED BEFORE THE ASSESSING OFFICER . IN VIEW OF THIS FACT, WE FIND N O INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND MORE SPECIFICALLY WHEN EVEN IN THE AGREED ADDITION OF RS.18,56,987/-, THE NET PROFIT OF THE ASSESSEE WORK OUT APPROXIMATELY TO 19% . WE AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE APPEAL OF THE REVENUE IS HAVING NO MERIT, CONS EQUENTLY, DISMISSED. 3. IN THE CROSS OBJECTION BY THE ASSESSEE, IT HAS B EEN CONTENDED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN CONFIRMING THE DISALLOWANCE OF PURCHASES OF RS.18,56,987/-. AF TER HEARING THE SUBMISSIONS OF THE LD. DR, AND ON PERUSAL OF RECORD , WE NOTE THAT THERE IS AN AGREED ADDITION OF RS.18,56,987/-, VIDE LETTE R DT. 21/12/2009 ITA NO.6415 & CO 93/MUM/2010 & 13 UMIYA CONSTRUCTION 7 ADDRESSED TO THE ASSESSING OFFICER WHEREIN THROUGH PARA-6 IN THE ABOVE CIRCUMSTANCES WE WOULD LIKE TO ADMIT THE ADDITION O F RS.18,56,987/- IN ORDER TO AVOID FURTHER LITIGATION AND DISPUTE AND BUY PEA CE. WE AGREE TO PAY INCOME TAX ON THE SAME. THE ASSESSEE ITSELF MENTIONED THEREFORE, IN THE ABSENCE OF ANY CONTRARY MATERIAL WE FIND NO INFIRM ITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IN VIEW OF THE AGREED ADDITION, THERE IS NO MERIT IN THE CROSS OBJECTION OF THE ASSESSEE . FINALLY THE APPEAL OF THE REVENUE AND THE CROSS OB JECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRES ENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 24/11/2014 . , % )*+ -. 24.11.2014 * % 4 SD/- SD/- (SANJAY ARORA) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; - DATED : 26 TH NOVEMBER, 2014. JV. , % #'5 65+' , % #'5 65+' , % #'5 65+' , % #'5 65+'/ COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT. 3. 7 ( ) / THE CIT, MUMBAI. 4. 7 / CIT(A)-13, MUMBAI 5. 5:4 #' , , / DR, ITAT, MUMBAI 6. 4;< = / GUARD FILE. , , , , / BY ORDER, $5' #' //TRUE COPY// > >> >/ // /? @ ? @ ? @ ? @ (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI.