A.C.I.T Cir - 1,Asansol, Asansol V. Subhasish Acharyya, Burdwan

ITA 1050/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5075 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 13-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2013
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS JCIT LD
• Section: 40A(3); 143(3)

Judgement Text

ITA NO.1050 & CO NO.75/K/2013-B-AM SUBHASISH ACHARYYA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI N.V.VASUDEVAN, JUDICIAL MEMBER , AND SHRI M. BALAGANESH, ACCOUNTAN T MEMBER ITA NO. 1050/KOL/2013 A.Y : 2008-09 A.C.I.T, CIR-1, ASANSOL VS. SUBHASISH ACHARYYA PAN: AFHPA 7112D (APPELLANT/DEPARTMENT) (RESPONDENT) CO NO. 75/KOL/2013 [ ARISING OUT OF ITA NO. 1050/KOL/2013 A.Y 2008-09] SUBHASISH ACHARYYA VS. A.C.I.T, CIR-1, ASANSOL (CROSS OBJECTOR/ASSESSEE) DEPARTMENT) FOR THE APPELLANT/DEPARTMENT: SMT. R ANU BISWAS, JCIT, LD.SR.DR FOR THE CROSS OBJECTOR/ASSESSEE: SHRI U DASGUPTA, ADVOCATE, LD.AR DATE OF HEARING: 13-04-2016 DATE OF PRONOUNCEMENT: 15 - 4 - 2016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARISE OUT OF THE ORDER OF THE LEARNED CIT(A), ASANSOL IN APPEAL NO. 241/CIT(A)/ASL/CIR-1/ASL/10-11 DATED 18-02-2013 AGAINST THE ORDER ASSESSMENT OF TH E LEARNED AO FOR THE ASST YEAR 2008-09 FRAMED U/S. 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND:- THAT THE LD. CIT(A), ASANSOL HAS ERRED IN LAW AND ON FACTS BY ALLOWING THE RELIEF OF RS.31,27,000/-, DISALLOWE D BY THE AO ON ACCOUNT OF VIOLATION OF SECTION 40A(3). ITA NO.1050 & CO NO.75/K/2013-B-AM SUBHASISH ACHARYYA 2 3. IN THE C.O ( NO.75/K/2013 ARISING OUT OF ITA NO. 1050/K/2013 A.Y 2008-09), THE ASSESSEE HAS RAISED THE FOLLOWING GROUND:- 1) FOR THAT ON THE FACTS OF THE CASE THE LD. CIT(A ) WAS NOT JUSTIFIED IN ESTIMATING THE NET PROFIT FROM CONTRAC T BUSINESS @ 8% OF GROSS RECEIPTS AND THE SAME MAY PLEASE BE REDUCE D. 4. THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD.AR OF THE ASSESSEE WAS ASKED BY THE LD. AO TO PRODUCE THE REL EVANT BOOKS OF ACCOUNT, DEPOSIT RECONCILIATION STATEMENT, DETAILS OF WORK-IN-PROGRE SS, DETAILS OF PROJECTS AND MAJOR EXPENSES SHOWN IN THE AUDITED STATEMENT OF ACCOUNT S. ON 1-12-2010, THE ASSESSEE APPEARED ALONG WITH HIS AUTHORIZED REPRESENTATIVE A ND PRODUCED THE TDS CERTIFICATE OF RS.40,90,171/-, WHICH WAS NOT DISCLOSED AS HIS INC OME IN THE AUDITED ACCOUNTS FILED. THE ASSESSEE HAS ALSO FILED AN UNDISCLOSED SAVING BANK ACCOUNT BEARING ACCOUNT NO.30991 MAINTAINED WITH BANK OF INDIA, BURNPUR BRA NCH. THE LD. AO OBSERVED THAT THE ASSESSEE DURING THE COURSE OF HEARING ADMITTED THAT HE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT. IT WAS FURTHER OBSERVED BY THE LD.AO T HAT REVISED STATEMENT OF ACCOUNTS WAS SUBMITTED BY THE ASSESSEE ON 24-11-2010 SHOWI NG GROSS CONTRACT RECEIPTS OF RS. 2,72,85,498/- INSTEAD OF RS. 2,30,26,408/-. THE ASS ESSEE ALSO SUBMITTED THAT HE COULD NOT PRODUCE ANY CORROBORATIVE EVIDENCE IN SUPPORT OF THE REVISED STATEMENTS OF ACCOUNT SUBMITTED BEFORE THE LD.AO. THE LD. AO FOUN D THE FOLLOWING DISCREPANCIES IN THE STATEMENT OF ACCOUNTS FILED BY THE ASSESSEE, W HICH ARE TABULATED AS BELOW:- PARTICULARS LIABILITIES ORIGINAL STATEMENT OF A/CS REVISED STATEMENT OF A/CS PARTICULARS ASSETS ORIGINAL STATEMENT OF A/CS REVISED STATEMENT OF A/CS TDS 5,16,844 6,08,240 KOTAK MAHINDRA SECURITIES LTD NIL 1,00,000 BANK OF INDIA (LOAN) 8,59,415 20,00,000 LOAN TO NIRU ENTER- PRISE NIL 2,50,000 ITA NO.1050 & CO NO.75/K/2013-B-AM SUBHASISH ACHARYYA 3 B.O.I S.B A/C NO.30991 NIL 42,81,648 B.O.I C.C A/C NO. 300078 NIL 15,00,000 CHEQUE IN HAND NIL 26,40,585 CASH IN HAND 1,07,106 27,107 WORK IN PROGRESS 9,62,841 NIL PROFIT & LOSS A/C PARTICULARS OF EXPENDI- TURE ORIGINAL STATEMENT OF A/CS REVISED STATEMENT OF A/CS PARTICULARS INCOME ORIGINAL STATEMENT OF A/CS REVISED STATEMENT OF A/CS DEDUCTION FROM BILLS NIL 41,78,521 CONTRACT RECEIPTS 2,30,26,408 2,72,85,498 STAFF WELFARE 20,650 40,650 LAST YEARS BILL 5,42,911 5,42,911 BANK INTEREST & CHARGES 1,80,284 1,85,269 SALES TAX 4,52,439 5,26,022 ACCOUNTING CHARGE 18,000 NIL 4.1 THE LD. AO ALSO OBSERVED THAT IN RESPONSE TO S HOW CAUSE NOTICE DATED 15-12- 2010, THE ASSESSEE SUBMITTED A REPLY SHOWING GROSS CONTRACT RECEIPTS TO THE TUNE OF RS.3,11,48,484/- INSTEAD OF RS.2,72,85,498/- AND MATERIALS DEDUCTION ON IT AMOUNTING TO RS. 48,28,417/-. THE LD. AO FOUND THAT GROSS CO NTRACT RECEIPTS HAS BEEN REVISED BY THE ASSESSEE FOR THE SECOND TIME. ACCORDINGLY, THE LD. AO OBSERVED THAT THE REVISED STATEMENT OF ACCOUNTS AND ORIGINAL STATEMENT OF ACC OUNTS AS SUBMITTED BY THE ASSESSEE COULD NOT BE EXAMINED. HENCE, HE RESORTED TO ESTIM ATE THE N.P AT 8% OF NET CONTRACT RECEIPTS AND MADE AN ADDITION OF RS.21,70,612/- . A PART FROM THIS, THE LD.AO ALSO MADE DISALLOWANCE OF RS.31,27,000/- U/S. 40A(3) OF THE A CT. ITA NO.1050 & CO NO.75/K/2013-B-AM SUBHASISH ACHARYYA 4 5. ON 1 ST APPEAL, THE LD.CIT(A) UPHELD THE ADDITION MADE ON ACCOUNT OF ESTIMATION OF N.P @ 8% BY HOLDING AS UNDER:- 5. THE APPELLANT IN THE GROUND 2 HAS PLEADED TO REDUCE THE SAME. IN WRITTEN SUBMISSION THE PLEA WAS TO REDUCE TO 5%. I HAD CONSIDERED ALL ASPECTS OF THE SAME. THE MATTER OF COMPULSORY MAINT ENANCE OF ACCOUNTS WAS SERIOUSLY VIOLATED. NO EVIDENCE ENABLING ASSESS ING OFFICER TO COMPUTE INCOME CORRECTLY HAS BEEN SUBMITTED. THE DE FICIENCY IN ACCORDING IS FAR TOO SERIOUS TO FIX INCOME ON A FL AT RATE AT A LOW LEVEL. IN THE CIRCUMSTANCE THE ESTIMATE AT 8% MADE BY THE ASS ESSING OFFICER IS LIBERAL. I CONFIRM THE ESTIMATION AT 8%. THE GROUND IS DISMISSED. 5.1 WITH REGARD TO DISALLOWANCE MADE U/S. 40A(3) O F THE ACT, THE LD. CIT(A) HELD THAT ONCE THE N.P IS ESTIMATED, THERE IS NO QUESTIO N OF MAKING ANY SEPARATE DISALLOWANCE U/S. 40A(3) OF THE ACT. 6. AGGRIEVED, THE REVENUE AS WELL AS THE ASSESSEE ARE IN APPEAL BEFORE US BY RAISING THE AFORESAID GROUND. 7. THE LD.DR RELIED ON THE ORDER OF THE LD.AO. IN RESPECT OF CROSS OBJECTION, THE LD. AR HAS FILED BEFORE US COMPARATIVE CHART CONTA INING THE NET PROFIT DISCLOSED BY THE ASSESSEE FROM A.Y 2005-06 ONWARDS AND FAIR ESTIMATI ON OF THE NET PROFIT. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LD.AR HAS FILED A COMPARATIVE STATEMENT OF GROSS CONTRACT RECEIPTS A ND NET PROFIT DETAILS FROM A.Y 2005- 06 ONWARDS, WHICH ARE REPRODUCED HEREIN BELOW:- COMPARATIVE STATEMENT OF GROSS CONTRACT RECEIPTS A ND NET PROFIT ASSESSED ASSESSMENT YEAR GROSSCONTRACT RECEIPTS ASSESSED NET PROFIT % REMARKS 2005-06 2006-07 2007-08 2008-09 2,564,845.00 7,334,574.00 7,634,817.00 26,742,587.00 210,317.00 306,728.00 432,472.00 718,434.00 8.19 4.18 5.66 2.68 U/S. 143(1) U/S. 143(1) U/S.143(1) DISCLOSED BY ASSESSEE. ASSESSED AT 8% ITA NO.1050 & CO NO.75/K/2013-B-AM SUBHASISH ACHARYYA 5 WE FIND THAT THE AVERAGE OF NET PROFIT FOR LAST TH REE YEARS WORKS OUT TO 6%. WE FEEL THE ESTIMATION OF NET PROFIT AT 6% OF NET RECEIPTS IN THE FACTS AND CIRCUMSTANCES OF THE CASE WOULD MEET THE ENDS OF JUSTICE. THE LD. AO IS DIRECTED ACCORDINGLY. THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED TO THAT EXTENT. 9. WITH REGARD TO THE REVENUES APPEAL, WE FEEL THA T THE LD.CIT(A) HAD RIGHTLY CONCLUDED THAT WHEN NET PROFIT IS ESTIMATED, THEN T HERE CANNOT BE ANY SEPARATE DISALLOWANCE/ADDITION U/S. 40A(3) OF THE ACT. WE PL ACE RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF THIS PROPOSITION:- CIT VS. MOHAMMAD DHURABUDEEN (2008) 4 DTR (MAD) 218 CIT VS. BANWARILAL BANSHIDAR (1998) 229 ITR 229(AL L) CIT VS. SMT. SANTOSH JAIN (2008) 296 ITR 324(P&H) 159 TAXMAN 392(P & H) CIT VS. PURUSHOTTAMLAL TAMRAKAR UCHEHRA (2003) 184 CTR (MP) 349(2004) 270 ITR 314(MP) INDWELL CONSTRUCTION VS. CIT (1999) 232 ITR 776(AP) IN VIEW OF THE ABOVE, THE GROUND RAISED BY THE REV ENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED AND CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED AS STATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 15-4-2016. SD/- (N.V.VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 15 -4 -2016 COPY OF THE ORDER FORWARDED TO:- ITA NO.1050 & CO NO.75/K/2013-B-AM SUBHASISH ACHARYYA 6 1.. THE APPELLANT/DEPARTMENT: THE ACIT, CIR-1, ASA NSOL, LOWER CHELIDANGA, ASANSOL-4. 2 THE RESPONDENT/ASSESSEE: SHRI SUBHASISH ACHARYYA, SHANTI NAGAR VIVEKANDA ROAD, BURNPUR, DIST BURDWAN. 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS