The ITO, Ward-2(1), Baroda V. Shri Mansinh Bhimsinh Gohil, Baroda

ITA 1166/AHD/2008

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6886 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 28-11-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 03-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N DIVATIA
• Assessee Lawyers: JAMES KURAIR
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 44AD; 68

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD .., .. , ! BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.K.GARODIA, HONBLE ACCOUNTANT MEMBER ITA NO.1166 & 1301/AHD/2008 ASSESSMENT YEAR:2001-02 INCOME TAX OFFICER, WARD-2(1), 1 ST FLOOR, AAYKAR BHAVAN, BARODA SHRI MANSINH BHIMSINH GOHIL, PROP: GOHIL ENTRPRISE, 30/! KSHATRIYA UVAK MANDAL CO.OP.SOCIETY, KARODIYA, BARODA PAN NO.AFSPG9645A V/S. V/S. MANSINH BHIMSINH GOHIL PROP OF GOHIL ENTEPRISE, GIDC 30/A KSHATRIYA UVAK MANDAL, CO-OP SOCIETY, KARODIYA, BARODA INCOME TAX OFFICER, WARD-2(2), BARODA (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI JAMES KURAIR, DR REVENUE BY:- SHRI S.N.DIVATIA, AR DATE OF HEARING 28-11-2011 DATE OF PRONOUNCEMENT 09-12-2011 ' ' ' ' /O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER:- THESE ARE CROSS-APPEALS FILED BY THE REVENUE AND A SSESSEE WHICH ARE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME-TAX (APPEALS)-II, BARODA DATED 25-01-2008 FOR ASSESSMENT YEAR 2001-02. 2. THE GROUND NO.1 OF REVENUES APPEAL AND GROUND N O.1 OF ASSESSEES ARE INTER-CONNECTED, WHICH ARE AS UNDER:- ITA NO.1166/AHD/2008 OF REVENUES APPEAL ITA NO.1166 & 1301/AHD/2008 A.Y. 2001-02 ITO WD-2(1) BRD V. MANSINH B GOHIL PAGE 2 1. THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.1 0,00,000/- ON ACCOUNT OF OPENING CAPITAL BALANCE. ITA NO.1301/AHD/2008 OF ASSESSEES APPEAL 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING ONLY 50% OF RS.20,60,57/- BEING MADE BY THE LD. A.O IN RESPECT OF THE OPENING CAPITAL SHOWN BY THE APPELLANT BASED ON BENEFIT OF DOUBT IN STEAD OF DELETING THE ENTIRE ADDITION ON DISALLOWANCE. THE SAME MAY KINDL Y BE ALLOWED NOW, BASED ON THE FACTS OF THE CASE. 3. BRIEF FACTS REGARDING THE COMMON ISSUE ARE THAT THE ASSESSEE HAS FURNISHED BALANCE-SHEET AND PROFIT AND LOSS ACCOUNT AS ON 31- 03-2001 AND FOR THE YEAR ENDED PERIOD FROM 01-04-2000 TO 31-03-2001 RESPECTIVELY. ASSESSING OFFICER HAS NOTED THAT ON PERUSAL OF BALANCE-SHEET, IT IS SEEN THAT UNDER THE HEAD CAPITAL ACCOUNT, AMOUNT OF RS.27,75,363/- HAS BEEN REFLECTED. HE FURTHER NO TED THAT OPENING BALANCE IN CAPITAL ACCOUNT WAS SHOWN AT RS.21,18,727/-. THE AO RAISED A QUERY AS TO HOW THERE IS ACCRETION TO THE CAPITAL ACCOUNT OF THE ASSESSEE AND IN SUPPORT OF THIS, HE ASKED THE ASSESSEE TO FURNISH COPY OF CAPITAL ACCOUNT OF THE ASSESSEE FOR EARLIER YEARS ALONG WITH BALANCE-SHEET OF EARLIER YEARS. THE AO N OTED THAT ASSESSEE COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE TO THE EFFECT OF D EPICTING SUCH BUILD-UP OF CAPITAL. THE AO FURTHER NOTED THAT ASSESSEE HAS SIMPLY STATE D THAT OPENING CAPITAL BALANCE IS ACCUMULATION OF PAST INCOME AND OTHER RECEIPTS OF C APITAL NATURE BUT THE ASSESSEE COULD NOT FURNISH ANY DOCUMENT IN SUPPORT OF THIS C ONTENTION. ON THIS, AO HELD THAT OPENING CAPITAL BALANCE IS NOT EXPLAINED. HE ALLOWE D CREDIT TO THE ASSESSEE ON ACCOUNT OF INCOME OF THE ASSESSEE FOR THE PRECEDING ASSESSMENT YEAR @ 8% OF TOTAL CONTRACTUAL RECEIPTS FOR THAT YEAR ENDING ON 31 ST MARCH, 2002, WHICH WAS WORKED OUT BY HIM AT RS.1,16,312/- AND AFTER DEDUCTING HOUSEHO LD EXPENDITURE THERE FROM TO THE EXTENT OF 50% OF SUCH INCOME, HE ALLOWED RELIEF TO THE ASSESSEE OF RS.58,156/- AND HELD THAT THE BALANCE AMOUNT OF OPENING CAPITAL OF RS.20,60,571/- IS UNEXPLAINED CASH CREDIT. BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A), WHO HAS HELD THAT SINCE THE ASSESSEE HAS BU SINESS ACTIVITY FOR PAST MANY YEARS AND HENCE THE ASSESSEE WAS HAVING BUSINESS AS SETS FOR SEVERAL YEARS AND THEREFORE, HE HELD THAT TO THE EXTENT OF RS.10 LAKH , OPENING CAPITAL REPRESENTED BY VARIOUS ASSETS ACQUIRED IN EARLIER YEARS OUT OF EAR LIER YEARS INCOME AND THEREFORE, HE UPHELD THE ADDITION ON THIS ACCOUNT TO THE EXTENT O F RS.10,60,571/- AND ALLOWED RELIEF TO THE ASSESSEE FOR RS.10 LAKH. NOW, THE REVENUE IS IN APPEAL FOR THE RELIEF ALLOWED ITA NO.1166 & 1301/AHD/2008 A.Y. 2001-02 ITO WD-2(1) BRD V. MANSINH B GOHIL PAGE 3 BY LD. CIT(A), WHEREAS ASSESSEE IS IN APPEAL FOR TH E ADDITION PARTLY CONFIRMED BY LD. CIT(A). 4. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER WHEREAS IT IS SUBMITTED BY LD. AR OF THE ASSESSEE THAT PAGE NO.28 OF THE PAPER BOOK IS TRIAL BALANCE FOR THE CURRENT YEAR AND AS PER THIS, THERE IS OPENING BALANCE OF VARIOUS ASSETS OF RS.13.51 LAKH ON ACCOUNT OF FIXED ASSETS AND RS.9.96 LAKH ON ACCOUNT OF CURRENT ASSETS AND THEREFORE, THE ENTIRE OPENING CA PITAL IS REPRESENTED BY OPENING BALANCE OF ASSETS AND HENCE, NO ADDITION IS CALLED FOR ON THIS ACCOUNT. HE ALSO DRAWN OUR ATTENTION TO PARA-1.02 OF THE WRITTEN SUBMISSIO N FURNISHED BY THE ASSESSEE TO LD. CIT(A) WHICH IS AVAILABLE ON PAGE 24 OF THE PB. IT WAS SUBMITTED THAT OUT OF TOTAL ASSET OF RS.23.47 LAKH, IT WAS FINANCED BY LOANS AN D CURRENT LIABILITY TO THE EXTENT OF RS.1.28 LAKH AND THE BALANCE AMOUNT OF RS.21.17 LAK H FINANCED OUT OF ASSESSEES CAPITAL AND THEREFORE, LD. CIT(A) WAS NOT JUSTIFIED TO RESTRICT THE RELIEF TO THE ASSESSEE TO THE EXTENT OF RS.10 LAKH ONLY. LD. AR OF THE ASS ESSEE ALSO PLACED RELIANCE ON THE FOLLOWING JUDGMENTS:- A) CIT V. PARMASHWAR BOHARA 301 ITR 404 (RAJ) B) CIT V. USHA STUD AGRL. FARM LTD. 301 ITR 384 (D EL) 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIALS ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BEL OW AND THE JUDGMENTS CITED BY LD. AR OF THE ASSESSEE. WE FIND THAT ASSESSEE HAS F URNISHED BALANCE-SHEET FOR THE PRESENT YEAR BUT NO BALANCE-SHEET OR TRIAL BALANCE OF ANY EARLIER YEAR WAS FURNISHED BY THE ASSESSEE AND THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF YEAR-WISE ACQUISITION OF FIXED ASSETS/CURRENT ASSETS ALONG WI TH SOURCES THEREOF. IN THE ABSENCE OF ANY SUCH SUPPORTING EVIDENCE, IT CANNOT BE SAID THAT WHATEVER OPENING BALANCE HAS BEEN SHOWN BY THE ASSESSEE IN THE CAPITAL ACCOU NT OR IN THE ASSETS ACCOUNT IS BOUND TO BE ACCEPTED. THE ASSESSEE HAS ALSO NOT FUR NISHED AS TO HOW MUCH INCOME WAS DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOM E IN THE EARLIER YEARS AFTER THE START OF THE ASSESSEES BUSINESS AND HOW MUCH WAS D RAWING FOR EACH YEAR AND HOW MUCH CAN BE THE ACCUMULATION OF INCOME IN EACH OF S UCH YEARS. IN THE ABSENCE OF ANY SUCH DETAILS OR EVIDENCE, WE FEEL THAT THE CRED IT ALLOWED BY THE ASSESSING OFFICER ON ACCOUNT OF OPENING CAPITAL OF RS.58,156/- WHICH IS FURTHER INCREASED BY THE LD. CIT(A) BY RS.10 LAKH IS REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT ITA NO.1166 & 1301/AHD/2008 A.Y. 2001-02 ITO WD-2(1) BRD V. MANSINH B GOHIL PAGE 4 CASE, WHERE THE ASSESSEE COULD NOT BRING ON RECORD ANY EVIDENCE REGARDING HIS SAVINGS IN EARLIER YEARS. WE THEREFORE FEEL THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. HENCE, GROUND NO.1 OF ASSESSEES APPEAL AS WELL AS GROUND NO.1 OF REVENUES APPEAL ARE REJECTED. 6. REGARDING THE JUDGMENTS CITED BY LD. AR OF THE A SSESSEE, WE FIND THAT THESE ARE NOT APPLICABLE BECAUSE FACTS ARE DIFFERENT. IN THE CASE OF PARMASHWAR BOHARA (SUPRA), THE ASSESSEE WAS MAINTAINING BOOKS FOR EAR LIER YEARS ALSO AND THE AMOUNT IN DISPUTE WAS SHOWN INVESTED AS ON 31-03-1992 WHER EAS ADDITION WAS MADE IN A.Y. 1993-94 U/S 68. IN THE PRESENT CASE, NO ACCOUNTS WA S MAINTAINED BY THE ASSESSEE UP TO 31-03-2000 AND HENCE, FOR THE FIRST TIME, IT WAS CREDITED IN THE BOOKS ON 01-04- 2000 WITHOUT BRINGING ANY EVIDENCE TO SHOW THAT THE ASSETS WERE ACQUIRED IN EARLIER YEARS OUT OF DISCLOSED INCOME. HENCE, THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE. SIMILARLY, THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF USHA STUD AGRL. FARM LTD. (SUPRA) IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE FACTS IN THAT CASE ARE ALSO DIFFERENT. IN THAT CASE , THE CREDIT BALANCE OF RS.15 LAKH IN DISPUTE WAS FOUND TO BE GETTING REFLECTED IN THE AC COUNTS OF THE ASSESSEE OVER PAST FOUR TO FIVE YEARS AND ADDITION WAS MADE THEREAFTER U/S 68 AND HENCE, IT WAS NOT A FRESH CREDIT IN THE RELEVANT YEAR. WE HAVE ALREADY DISCUSSED THAT IN THE PRESENT CASE, THE ASSESSEE WAS NOT MAINTAINING BOOKS IN EARLIER Y EARS AND NO OTHER EVIDENCE EXCEPT TRIAL BALANCE AND BALANCE-SHEET OF THE PRESE NT YEAR IS BROUGHT ON RECORD TO SHOW THAT CAPITAL OR ASSETS WERE ACQUIRED IN EARLIE R YEARS OUT OF DISCLOSED SOURCE. 7. THE GROUND NO.2 OF REVENUES APPEAL AND GROUND N O.2 OF ASSESSEES ARE INTER-CONNECTED, WHICH ARE AS UNDER:- ITA NO.1166/AHD/2008 OF REVENUES APPEAL 1. THE LD. CIT(A) ERRED IN ALLOWING RELIEF ON ACCO UNT OF ADDITION MADE IN RESPECT OF CURRENT LIABILITIES AMOUNTING TO RS.22,3 0,887/-. ITA NO.1301/AHD/2008 OF ASSESSEES APPEAL 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN WIT H-HOLDING THE ADDITION OF RS.1,14,650/- BEING THE DIFFERENCE BETWEEN RS.23,45 ,537/- AND RS.22,30,887/-. HE LD. CIT(A) ALLOWED THE ENTIRE AD DITION MADE BY THE LD. A.O BASES ON THE FACTS. THE SAME MAY KINDLY BE ALLO WED NOW. ITA NO.1166 & 1301/AHD/2008 A.Y. 2001-02 ITO WD-2(1) BRD V. MANSINH B GOHIL PAGE 5 8. BRIEF FACTS ABOUT THIS COMMON ISSUE ARE THAT IT IS NOTED BY ASSESSING OFFICER IN ASSESSMENT ORDER THAT BALANCE-SHEET OF THE ASSESSEE REFLECT CURRENT LIABILITIES AT RS.23,45,537/-. HE FURTHER NOTED THAT ASSESSEE WAS ASKED TO FURNISH NAMES AND ADDRESS OF THE CREDITORS AND THE DETAILS OF TRANSAC TION WHICH HAVE LED TO THE CURRENT LIABILITIES AND OTHER RELEVANT DOCUMENTS TO EXPLAIN THE CREDITORS REFLECTED IN THE BALANCE-SHEET BUT ASSESSEE WAS UNABLE TO FURNISH AN Y EVIDENCE WITH REGARD TO THEM. HE ALSO NOTED THAT ASSESSEE COULD NOT FURNISH AS TO WHETHER THE LIABILITY IN QUESTION WAS INCURRED DURING THIS YEAR OR ARE BROUGHT FORWAR D FROM THE EARLIER YEARS. THE AO HELD THAT ENTIRE SUCH LIABILITY IS UNEXPLAINED AND HE MADE THE ADDITION OF THE SAME. BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO HAS HELD THAT OUT OF SUCH LIABILITY OF RS.23,45,537/-, ADDITION T O THE EXTENT OF RS.22,30,887/- IS NOT JUSTIFIED AND HE DELETED THE SAME BUT CONFIRMED THE BALANCE ADDITION OF RS.1,14,650/-. NOW, REVENUE IS IN APPEAL FOR THE AD DITION DELETED BY LD. CIT(A) AND ASSESSEE IS IN APPEAL FOR THE ADDITION CONFIRMED BY LD. CIT(A). 9. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER WHEREAS IT IS SUBMITTED BY LD. AR OF THE ASSESSEE THAT LD.CIT(A) HAS CONFIRMED THE LIABILITY IN RESPECT OF THREE PARTIES OUT OF WHICH THE BALANCE O F TWO PARTIES IS BROUGHT FORWARD BALANCE AND IN CASE OF ONE PARTY, IT IS OUTSTANDING OF THIS YEAR. IT WAS HIS SUBMISSION THAT WHEN THE BOOKS ARE REJECTED AND INCOME IS ASSE SSED ON ESTIMATE, NO SEPARATE ADDITION OF CURRENT LIABILITY IS JUSTIFIED. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION, PERUSE D THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. W E FIND THAT TRIAL BALANCE IS APPEARING ON PAGE NO.28 OF THE PB AND OUT OF TOTAL CREDITS OF RS.23,45,537/- AS ON 31-03-2001, ONLY TWO CREDITORS I.E. CEEVEECON ENTER PRISE OF RS.56,150/-AND RS.5,500/- OF MIDEST PIPELINE PRODUCTS TOTAL RS.61, 650/- IS ON ACCOUNT OF OPENING BALANCE AND THE REST OF THE CREDITORS ARE IN RESPEC T OF CREDITORS OF THE PRESENT YEAR. SINCE THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT OF THE PRESENT YEAR AND ASSESSED THE INCOME OF THE ASSESSEE ON THE BASI S OF ESTIMATE, WE ARE OF THE CONSIDERED OPINION THAT NO SEPARATE ADDITION ON ACC OUNT OF CREDITORS OF THE PRESENT YEAR IS CALLED FOR. WE, THEREFORE, CONFIRM THE ADDI TION TO THE EXTENT OF RS.61,650/- WHICH IS CLAIMED TO BE B/F FROM EARLIER YEAR WITHOU T BRINGING ANY EVIDENCE IN SUPPORT ITA NO.1166 & 1301/AHD/2008 A.Y. 2001-02 ITO WD-2(1) BRD V. MANSINH B GOHIL PAGE 6 AND THE BALANCE ADDITION IS DELETED. ACCORDINGLY, G ROUND NO.2 OF REVENUES APPEAL IS REJECTED AND GROUND NO.2 OF ASSESSEES APPEAL IS PARTLY ALLOWED. 11. NOW WE TAKE UP THE REMAINING GROUND I.E. GROUND NO.3 OF ASSESSEES APPEAL, WHICH IS AS UNDER:- 3. THE LD. C.I.T(A) FURTHER ERRED IN ESTIMATING TH E PROFIT AT10% ON TOTAL RECEIPTS OF RS.1,00,94,572/- THEREBY FOLLOWING THE VIEW TAKEN BY THE LD. A.O WITHOUT PERUSING THE APPLICATION OF SECTION 44AD AN D THE ACUTE COMPETITION IN THE LINE OF BUSINESS. THE SAME MAY BE RESTRICTED TO 8%. 12. BRIEF FACTS TILL THE ASSESSMENT STAGE ARE NOTED BY LD. CIT(A) IN PARA-5.1 OF HIS ORDER, WHICH IS REPRODUCED BELOW:- 5.1 THE ASSESSING OFFICER HAS BEEN DISCUSSED IN DE TAIL IN PARA-7(III) OF ASSESSMENT ORDER. THE ASSESSING OFFICER ESTIMATE IN COME @ 10% AT RS.10,09,457/-. THE RELEVANT PORTION IS REPRODUCED AS UNDER: AS STATED ABOVE THE ASSESSEE HAS FAILED TO PRODUCE THE BOOKS OF ACCOUNTS OR EVEN FURNISH AUDITED ACCOUNTS OF HIS BU SINESS DURING THE COURSE OF PROCEEDINGS IN SPITE OF BEING FAVOURED WI TH SEVERAL OPPORTUNITIES TO EXPLAIN HIS ACCOUNTS WITH REFERENC E TO THESE ESSENTIAL DOCUMENTS. THE ASSESSEE HAS RECEIVED A SUM OF RS.1, 00,97,572/- OUT OF CONTRACTUAL RECEIPTS AGAINST WHICH SEVERAL EXPEN SES TOTALING IN THE SUM OF RS.92,84,137/- HAVE BEEN CLAIMED. THE ABSENC E OF BOOKS OF ACCOUNTS OF THE ASSESSEE PRECLUDES ANY EFFORT FOR V ERIFYING THE CORRECTNESS OF SUCH EXPENSES AND THE VERACITY THERE OF. WHENEVER EXPENSES ARE CLAIMED BY THE ASSESSEE THE ONUS IS ON THE ASSESSEE TO DISCHARGE BY PROVING THAT THE EXPENSES CLAIMED BY H IM ARE CORRECT AND THAT THEY DO NOT DEFY ANY VERIFICATION WHICH MAY HA VE TO BE CARRIED OUT FOR THE PURPOSE OF ESTABLISHING VERACITY THEREOF. I N THE CIRCUMSTANCES THEREFORE A SITUATION HAS RISEN BY WHICH NECESSARIL Y THE MANDATE OF THE PROVISIONS OF SEC. 145(3) HAS TO BE INVOKED TO ARRI VE AT THE CORRECT INCOME OF THE ASSESSEE. HAVING REGARD TO THE NATURE OF BUSINESS WHICH IS AKIN TO CIVIL CONSTRUCTION IT WOULD BE REASONABL E TO ESTIMATE THE INCOME OF THE ASSESSEE AT 10% OF THE CONTRACTUAL RE CEIPTS REFLECTED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE IN THE WAKE OF THE ASSESSEES INABILITY TO REBUT THE PRESUMPTION OF TH E REVENUE THAT THE ACCOUNTS OF ASSESSEE BEING IMPROPER AND INCORRECT M ERIT REJECTION. IN THE CIRCUMSTANCES A SUM OF RS.10,09,457/- IS CONSID ERED TO BE THE NET PROFIT OF ASSESSEE EXIGIBLE TO TAX FOR THE YEAR UND ER ASSESSEE. BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A). LD. CIT(A) HAS DECIDED THE ISSUE ON THIS BASIS THAT ALTHOUGH THE A RGUMENT OF THE ASSESSEE IS THAT 8% SHOULD BE APPLIED AS PER THE PROVISION OF SEC.44 AD OF THE ACT BUT THIS IS NOT VALID BECAUSE SECTION 44AD IS APPLICABLE WHERE THE TURNOV ER IS BELOW RS.40 LAKH BUT IN ITA NO.1166 & 1301/AHD/2008 A.Y. 2001-02 ITO WD-2(1) BRD V. MANSINH B GOHIL PAGE 7 THE PRESENT CASE, THE TURNOVER IS MUCH MORE THAN TH IS. HE CONFIRMED THE ASSESSMENT ORDER AT THIS ISSUE AND NOW THE ASSESSEE IS IN APPE AL BEFORE US. 13. IT IS SUBMITTED BY LD. AR OF THE ASSESSEE THAT SINCE 8% RATE IS PRESCRIBED IN SECTION 44AD IF THE ASSESSEE IS HAVING TURNOVER UP TO RS.40 LAKH, BUT IN THOSE CASES, WHERE THE TURNOVER IS MORE, THE RATE SHOULD BE LOWER BUT AT THE WORST, MAXIMUM 8% CAN BE APPLIED. HE ALSO SUBMITTED THAT O N PAGES 35-38 OF THE PB IS THE COPY OF ASSESSMENT ORDER IN ASSESSEES OWN CASE , FOR A.Y 2002-03 AND IN THAT YEAR, THE ASSESSING OFFICER HIMSELF HAS APPLIED THE RATE OF 8% AND THEREFORE, IN THE PRESENT YEAR ALSO, THE SAME RATE OF 8% SHOULD BE AP PLIED. AS AGAINST THIS, IT WAS SUBMITTED BY LD. DR OF THE REVENUE THAT IN NEXT YEA R I.E. A.Y. 2002-03, THE GROSS RECEIPT WAS AT RS.5,81,142/- AND THEREFORE, THE PRO VISIONS OF SECTION 44AD WERE INVOKED BY THE ASSESSING OFFICER AND 8% WAS APPLIED BUT IN THE PRESENT YEAR, SECTION 44AD IS NOT APPLICABLE AND HENCE, ORDER OF AO SHOULD BE CONFIRMED. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. F IRST, WE DECIDE REGARDING THIS CONTENTION OF LD.AR OF THE ASSESSEE THAT SINCE THE ASSESSING OFFICER HIMSELF HAS APPLIED 8% RATE IN THE NEXT YEAR, IN THE PRESENT YE AR ALSO, THE SAME RATE SHOULD BE APPLIED. IN THIS REGARD, WE FIND THAT IN NEXT YEAR, TURNOVER WAS BELOW RS.6 LAKH AND HENCE SECTION 44AD WAS APPLICABLE AND THEREFORE, 8% WAS APPLIED BY THE AO IN THAT YEAR AS PER THE PROVISION OF SECTION 44AD BUT IN TH E PRESENT YEAR THE TURNOVER IS RS.100.94 LAKH AND HENCE, SECTION 44AD IS NOT APPLI CABLE AND THEREFORE, THIS ARGUMENT OF LD. AR OF THE ASSESSEE FAILS. WE ALSO F IND THAT IT IS NOTED BY AO IN PARA- 7.(III) OF THE ASSESSMENT ORDER THAT THE ASSESSEE H AS RECEIVED A SUM OF RS.100.93 LAKH OUT OF CONTRACTUAL RECEIPT AGAINST WHICH, EXPE NSES TOTALING TO RS.92,84,137/- HAS BEEN CLAIMED BUT IN THE ABSENCE OF BOOKS OF ACCOUNT OF THE ASSESSEE, IT IS NOT POSSIBLE TO VERIFY THE CORRECTNESS OF SUCH EXPENSES AND THE VERACITY THEREOF. IT IS ALSO STATED BY THE AO THAT ONUS IS ON THE ASSESSEE TO DI SCHARGE BY PROVING THAT EXPENSES CLAIMED BY HIM ARE CORRECT BUT BEFORE LD. CIT(A) AL SO, THE BOOKS OF ACCOUNT WERE NOT PRODUCED. NO OTHER EVIDENCE IS BROUGHT ON RECORD TO JUSTIFY THE CLAIM OF THE ASSESSEE THAT INCOME IS ONLY RS.810435.23 AGAINST GROSS RECE IPT AT RS.10,94,527/- AS PER PROFIT AND LOSS ACCOUNT APPEARING ON PAGE-5 OF THE PB. OUT OF TOTAL EXPENDITURE CLAIMED OF RS.92.84 LAKH, RS.60.36 LAKHS IS STATED TO BE ON ACCOUNT OF JOB-WORK ITA NO.1166 & 1301/AHD/2008 A.Y. 2001-02 ITO WD-2(1) BRD V. MANSINH B GOHIL PAGE 8 EXPENSES AND RS.14.23 LAKH IS ON ACCOUNT OF LABOUR CHARGES. IN THE PAPER BOOK, NO DETAILS OF THESE EXPENSES ARE FURNISHED. NO PROFIT AND LOSS ACCOUNT OF ANY PRIOR PERIOD OR SUBSEQUENT PERIOD HAS BEEN FURNISHED TO C OMPARE THE EXPENSES CLAIMED BY THE ASSESSEE IN THE PRESENT YEAR. NO COMPARABLE CASE HAS BEEN CITED BEFORE THE AUTHORITIES BELOW OR BEFORE US OF A SIMILAR ASSESSE E HAVING SIMILAR TYPE OF BUSINESS AND HAVING SIMILAR TYPE OF RECEIPT AND EXPENSES. IN THE ABSENCE OF ANY EVIDENCE IN THIS REGARD, WE FEEL THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) BECAUSE EVEN IN THE ABSENCE OF BOOKS, THE ADDITION MADE BY THE ASSESSING OFFICER IS OF ONLY RS.1,99,022/- (RS.10,09,457/- - RS.810,4 35/-) WHICH IS VERY SMALL WHEN THE UNVERIFIABLE EXPENSES ARE OF RS.92.84 LAKHS. GROUND NO.3 OF ASSESSEES APPEAL IS REJECTED. 15. IN THE RESULT, REVENUES APPEAL IS DISMISSED WHEREA S APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09/12/2011 # ' $ %& '() 09 / 12 / 2011 !+ , $ - . SD/- SD/- ( .. ) ( .. ) (D.K.TYAGI) (A.K. GARODIA) ( ) ( ! ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, *DKP '()- 09/12/2011 . ' ' ' ' $ $$ $ 012 012 012 012 32&1 32&1 32&1 32&1 / COPY OF ORDER FORWARDED TO:- 1. 56 / APPELLANT 2. 056 / RESPONDENT 3. (( 1 +9 / CONCERNED CIT 4. +9- / CIT (A) 5. 2<= 01' , , / DR, ITAT, AHMEDABAD 6. ? @# / GUARD FILE. BY ORDER/ ' , /TRUE COPY/ A/ (B , .