Sh. Abdul Majid Bhat, Jammu & Kashmir V. The Income-tax Officer, Jammu

ITA 113/ASR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9650 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 23-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.113(ASR)/2015 ASSESSMENT YEAR: 2009-10 SH. ABDUL MAJID BHAT, WARD-10, RAJOURI JAMMU & KASHMIR. PAN:AJBPB0561D VS. ITO, WARD-2(1), JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N.ARORA (ADV.) RESPONDENT BY: SH. RAHUL DHAWAN (DR.) DATE OF HEARING: 27.07.2016 DATE OF PRONO UNCEMENT: 01.08.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT(A), JAMMU, DATED 05.12.2014, FOR ASST. YEAR: 20 09-10. 2. THE ASSESSEE HAS TAKEN TWO GROUNDS OF APPEAL. ON E OF THE GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(A) HA S RESTRICTED THE APPLICATION OF NET PROFIT RATE ON THE TOTAL GROSS R ECEIPTS TO 8% WHEREAS HE SHOULD HAVE APPLIED THE NET PROFIT RATE OF 5%. THE SECOND GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNED CIT(A) HAS WRONGLY PAR TLY UPHELD THE ACTION OF ASSESSING OFFICER, IN WHICH HE HAD MADE AN ADDIT ION ON ACCOUNT OF NOTIONAL INCOME FROM JCB OF ASSESSEE. 3. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT ASS ESSEE WAS A CONTRACTOR AND IN A NUMBER OF CASES DECIDED BY HON BLE ITAT AMRITSAR BENCH, IT HAS BEEN HELD THAT APPLICATION OF 5% TO G ROSS RECEIPTS IS A ITA NO.113 (ASR)/2015 ASST. YE AR: 2009-10 2 REASONABLE RATE FOR ESTIMATION OF INCOME AND RELIAN CE WAS PLACED ON FOLLOWING CASE LAWS. (I) SH. MOHAN SINGH CONTRACTOR VS. ITO, IN ITA NO.59(ASR)/2012 (II) ITO VS. M/S SURINDER PAL NAYYAR CONSTRUCTIO NS IN ITA NO.366(ASR)/2010, (III) DCIT VS. ABDUL SALAM MIR IN ITA NO.115(ASR)/ 2013 (IV) THE MATTEWAL CO-OPERATIVE L/C HOUSING SOCITY VS. ACIT IN ITA NO.450(ASR)/2012 4. AS REGARDS THE OTHER ADDITION OF RS.3,00,000/-, THE LEARNED AR SUBMITTED THAT THE JCB WAS USED BY ASSESSEE FOR HIS OWN CONTRACT WORK AND THEREFORE, NO SEPARATE INCOME WAS GENERATED FRO M JCB AND ASSESSEE HAD NOT GIVEN THE JCB MACHINE ON HIRE AND MOREOVER , IT WAS SUBMITTED THAT ONCE THE INCOME OF THE ASSESSEE IS ESTIMATED N O FURTHER ADDITION CAN BE MADE. 5. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE LEARNED CIT(A) ALREADY ALLOWED SUBSTANTIAL RELIEF TO THE AS SESSEE AND APPLICATION OF 8% OF NET PROFIT TO GROSS RECEIPTS IS ALSO IN LI NE WITH THE PROVISIONS OF SEC.44AD OF THE ACT, THEREFORE, THIS GROUND OF APPE AL OF ASSESSEE SHOULD BE DISMISSED. 6. AS REGARDS THE OTHER ADDITION OF RS.3,00,000/- C ONFIRMED BY LEARNED CIT(A), HE ARGUED THAT THE LEARNED CIT(A) H AS ALREADY ALLOWED SUBSTANTIAL RELIEF TO THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSING O FFICER WHILE REJECTING ITA NO.113 (ASR)/2015 ASST. YE AR: 2009-10 3 THE BOOKS OF ACCOUNT OF THE ASSESSEE APPLIED 10% OF NET PROFIT TO RECEIPTS WHEREAS THE LEARNED CIT(A) REDUCED THE RATE FROM 10 % TO 8%. BOTH AUTHORITIES BELOW HAS NOT CONSIDERED THE PAST HISTO RY OF THE ASSESSEE AND OTHER PARAMETERS WHILE ARRIVING AT THE APPLICATION OF RATES. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF TELILIN KS VS. CIT, BATHINDA ( ITA NO.269 OF 2014), HAS LAID DOWN THE FOLLOWING PARAMETERS FOR ESTIMATION OF INCOME IN THE CASE OF CIVIL CONTRACT ORS IN CASES WHERE BOOKS OF ACCOUNT ARE REJECTED. (I) PAST TAX HISTORY OF THE ASSESSEE. (II) ASSESSMENT ORDERS PASSED BY AND ACCEPTED BY T HE DEPARTMENT. (III) THE NATURE OF ASSESSEES BUSINESS. (IV) AN APPRAISAL OF THE VALUE OF THE CONTRACT. (V) PREVAILING ECONOMIC CONDITIONS VIS--VIS THE A SSESSEES BUSINESS. (VI) THE PRICE OF RAW MATERIAL AND LABOURS ETC. (VII) THE RISE IN PRICE INDEX AS NOTIFIED BY THE CE NTRAL GOVERNMENT FROM TIME TO TIME. (VIII) ASSESSMENTS OF OTHER ASSESSEES ENGAGED IN SI MILAR BUSINESS. THEREFORE FOLLOWING THE ABOVE JUDGMENT OF THE HONB LE COURT, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE TO THE OFFICE OF AS SESSING OFFICER WHO SHOULD DECIDE AFRESH IN VIEW OF THE VARIOUS PARAMET ERS SET OUT BY THE HONBLE PUNJAB & HARYANA HIGH COURT. 8. AS REGARDS THE OTHER ISSUE OF RS.3,00,000/- CON FIRMED BY LEARNED CIT(A), WE FIND THAT ASSESSING OFFICER HAD MADE THE ADDITION ONLY ON THE BASIS OF ESTIMATION AND LEARNED CIT(A) HAS ALSO ALL OWED PARTIAL RELIEF ON THE BASIS OF ESTIMATION ONLY. THE ARGUMENT OF LEARN ED AR IS THAT SINCE ITA NO.113 (ASR)/2015 ASST. YE AR: 2009-10 4 THE INCOME OF ASSESSEE HAS BEEN ESTIMATED ON PERCEN TAGE BASIS, THEREFORE, THE INCOME FROM JCB IS DEEMED TO HAVE BE EN INCLUDED IN THE SUCH ESTIMATION. THE AUTHORITIES BELOW HAS NOT EXAM INED THE ISSUE FROM THE ANGLE AS TO WHETHER THE ASSESSEE HAD GIVEN THIS MACHINE TO OUTSIDE PARTIES ON HIRE OR ONLY USED IN HIS OWN BUSINESS. T HE REASON GIVEN BY THE AUTHORITIES BELOW THAT SINCE LABOUR CHARGES HAD DEC REASED MARGINALLY THEREFORE, ASSESSEE MUST NOT HAVE USED THE MACHINER Y FOR HIS OWN BUSINESS AND MUST HAVE USED OUTSIDE OF HIS BUSINESS IS NOT BASED UPON ANY MATERIAL. THEREFORE, IN VIEW OF THE ABOVE, WE D EEM IT APPROPRIATE TO REMIT THIS ISSUE ALSO TO OFFICE OF ASSESSING OFFICE R, WHO SHOULD DECIDE THE ISSUE AFRESH KEEPING IN VIEW THE ARGUMENTS OF ASSES SEE AND RELEVANT MATERIAL. 9. IN VIEW OF THE ABOVE, THE APPEAL FILED BY A SSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1.08.2016. SD/- SD/- (A.D. JAIN) (T . S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 01.08.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER