M/s. Parida Labour Suppliers, Khurda V. ITO, Khurda

ITA 115/CTK/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3789 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B N DAS
• Assessee Lawyers: P C SETHI
• Keywords: Period of limitation

Judgement Text

1 ITA NO.115/CTK/2013 ASSESSMENT YEAR :2008 - 09 IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 115/CTK/2013 ASSESSMENT YEAR : 2008 - 09 M/S. PANDA LABOUR SUPPLIERS, BANPUR ODAGAON, GAMBHARIMUNDA, DIST: KHURDA VS. ITO, KHURDA WARD, KHURDA PAN/GIR NO. AAFFP 0815 K (APPELLANT ) .. ( RESPONDENT ) ASSESS EE BY : SHRI P.C SETHI , AR REVENUE BY : SHRI B.N.DAS, DR DATE OF HEARING : 07 /06 / 2017 DATE OF PRONOUNCEMENT : /06 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - II, BHUBANESWAR, DATED 6.11.2012 FOR THE ASSESSMENT YEAR 20 08 - 09. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THAT, THE ORDER OF THE LEARNED CIT (A) IS ILLEGAL, ARBITRARY, UNJUST AND IS CLEAR VIOLATION TO THE PROVISIONS OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED AS 'THE I.T. ACT') AND FOR WHICH THE ORDER OF ASSESSMENT ALONGWITH APPELLATE ORDER OF LEARNED CIT(A) IS LIABLE TO BE QUASHED. 2. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUAS HING THE ASSESSMENT ORDER WHICH HAS BEEN PASSED WITHOUT SERVING NOTICE U/S 143(2) OF THE I.T. ACT ON THE APPELLANT. 2 ITA NO.115/CTK/2013 ASSESSMENT YEAR :2008 - 09 3. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ASSESSMENT ORDER WHICH HAS BEEN PASSED WITHOUT PROCESSING THE R ETURN U/S 143(1) OF THE I.T. ACT. 4. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ASSESSMENT ORDER WHICH HAS BEEN PASSED WITHOUT TAKING COGNIZANCE TO THE PRAYER MADE BY THE APPELLANT U/S 144A OF THE I.T. ACT. 5. THAT, THE LEA RNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ORDER OF ASSESSMENT WHICH HAS BEEN SERVED 45 DAYS BEYOND THE PERIOD OF LIMITATION AND FOR THAT MATTER THE SAID ASSESSMENT ORDER IS LIABLE TO BE QUASHED 6. THAT, THE LEARNED CI T (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ASSESSMENT ORDER AS THERE IS NO COGENT REASON UNDER THE IT. ACT IN ISSUING NOTICE U/S 143(2) OF THE I.T. ACT. 7. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT DELETING THE ADDITION WHICH HAS BEEN ESTIMATED @ 8% OF THE GROSS TURNOVER WITHOUT HAVING ANY COMPARABLE CASE. 8 THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT ALLOWING THE INTEREST OF PARTNERS AND SALARY WHICH IS LIABLE TO BE ALLOWED AND FOR WHICH ORDER OF THE LEARNE D CIT(A) IS SUFFERS FROM SERIOUS LEGAL INFIRMITIES. 9. THAT, THE APPELLANT MAY ADD. ALTER, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL WITH THE LEAVE OF THE HON'BLE ITAT. 3. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING GROUND NOS.1 TO 6 OF THE APPEAL. HENCE, THESE GROUNDS ARE DISMISSED FOR WANT OF PROSECUTION. 4. GROUND NOS. 8 & 9 OF THE APPEALS ARE GENERAL IN NATURE AND HENCE, REQUIRES NO SEPARATE ADJUDICATION BY ME. 3 ITA NO.115/CTK/2013 ASSESSMENT YEAR :2008 - 09 5. THE ONLY GROUND WHICH REMAINS TO BE ADJUDICATED IS GROUND NO.7 OF THE APPEAL, WHEREIN, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN ESTIMATING THE INCOME @ 8% OF THE TURNOVER. 6. I HAVE HEARD THE RIVAL SUBMI SSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT IN ABSENCE OF REGULAR SET OF BOOKS OF ACCOUNT/ BILLS OR VOUCHERS, IT WAS DIFFICULT TO DERIVE THE CORRECT PROFIT, THEREFORE, HE HELD THAT THE CORRECTNESS AND COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE IS NOT SATISFACTORY WITHIN THE MEANING OF SECTI ON 145(3) OF THE ACT. HENCE , HE PROCEEDED TO MAKE THE ASSESSMENT U/S.144 OF THE ACT. THE ASSESSING OFFICER DETERMINED THE INCOME OF THE ASSESSEE BY APPLYING THE RATE OF 8% TO THE GROSS CONTRACT RECEIPTS OF RS.39,72,277/ - AND ARRIVED AT THE INCOME OF THE ASSESSEE AT RS.3,17,782/ - . 7. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 8. BEFORE ME, THE SUBMISSION OF THE LD A.R. OF THE ASSESSEE IS THAT FROM THE INCOME ESTIMATED BY THE ASSESSING OFFICER BY APPLYING THE RATE OF 8% TO GROSS CONTRACT RECEIPTS , THE ASSESSEE SHOULD BE ALLOWED DEDUCTION FOR INTEREST AND REMUNERATION PAID TO THE PA RTNERS OF RS.1,08, 656/ - AND RS.76,704/, RESPECTIVELY. 9. LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 4 ITA NO.115/CTK/2013 ASSESSMENT YEAR :2008 - 09 10. I FIND THAT HYDERABAD BENCHES OF THE TRIBUNAL IN THE CASE OF ACIT, CIRCLE - 10 (1) , HYDERABAD VS M/S. GOPAL KRI SHNA BUILDERS, IN ITA NO.601/HYD/2011, ASSESSMENT YEAR 2008 - 09 ORDER DATED 24.1.2013 HAS HELD THAT THE ASSESSING OFFICER SHOULD ALLOW DEDUCTION TOWARDS I NTEREST AND REMUNERATION PAID TO PARTNERS FROM THE INCOME ESTIMATED BY HIM AT 10% OF THE RECEIPTS, RELYING ON THE FOLLOWING D ECISIONS: I) RAM J H ANWARLAL V/S. ITO (321 ITR 400) (RAJ) II) BHARAT CONSTRUCTION CO. V/S. CIT 258 ITR 140 (RAJ) III) CIT V/S. JAIN CONSTRUCTIONS CO. (245 ITR 527) (RAJ) HENCE, RESPECTFULLY FOLLOWING THE DECISION OF THE HYDERABAD BENCHES OF THE TRIBUNAL IN THE CASE OF GOPAL KRISHNA BUILDERS (SUPRA), I DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION TOWARDS I NTEREST AND REMUNERATION PAID TO PARTNERS FROM THE ESTIMATED INCOME OF 8% OF GROSS CONTRACT RECEIPTS AFTER VERIFYING THE PARTNERSHIP DEED AND IN ACCORDANCE WITH SECTION 40(B) OF THE AC T. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON - 7 /06 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 07 /0 6 /2017 5 ITA NO.115/CTK/2013 ASSESSMENT YEAR :2008 - 09 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. PANDA LABOUR SUPPLIERS, BANPUR ODAGAON, GAMBHARIMUNDA, DIST: KHURDA 2. THE RESPONDENT. ITO, KHURDA WARD, KHURDA 3. THE CIT(A) II, BHUBANESWAR 4. PR.CIT - II, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//