M/s Bijay Kumar Mohapatra, Bhadrak V. ITO, Bhadrak

ITA 120/CTK/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4631 (ITAT-CUTTACK)
• Duration Of Justice: 5 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2014
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURY
• Assessee Lawyers: B R PANDA
• Section: 44AD; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK [ , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO. 120 /CTK/201 4 ( [ [ / ASSESSMENT YEAR S : 20 09 - 20 10 ) M R. BIJAY KUMAR MOHAPATRA, AT/PO: RANDIA, DISTRICT BHADRAK, VS. ITO WARD BHADRAK, BHADRAK ./ ./ PAN/GIR NO. : A ADFB 8748 D ( / APPELLANT ) .. ( / RESPONDENT ) [ /ASSESSEE BY : SHRI B.R.PANDA /REVENUE BY : SHRI RA B IN CHOUDHURY / DATE OF HEARING : 2 7 TH MAY , 201 5 / DATE OF PRONOUNCEMENT 29 TH MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV (J.M) : TH IS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A ) - I, BHUBANESWAR, DATED 30 - 1 - 2014 FOR THE ASSESSMENT YEAR 20 09 - 2010, INTER ALIA , ON THE FOLLOWING GROUNDS : - A . FOR THAT IN THE FACTS AND CIRCUMSTANCE OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF ASSESSMENT PASSED ESTIMATING THE NET PROFIT @8% AFTER REJECTING THE BOOKS OF ACCOUNTS AND IGNORING THE MAJOR EXPENSES INCURRED FOR EXECUTION OF THE WORKS. SO APPRECIATION OF THE NATURE OF WORKS, THE PROFIT RATE SHOWN IS TO BE ACCEPTED. B . FOR THAT , THE LD. AO AS WELL AS THE LD. CIT(A) WERE FAILED TO JUSTIFY IN DETERMINATION OF PROFIT RATE ADOPTED IN THIS LINE OF BUSINESS CARRIED ON. MOREOVER, NO SUCH COMPARATIVE CASES POINTED OUT WHIC H COULD SUBSTANTIATE THAT, TO DISCLOSE CORRECT INCOME. C . FOR THAT, THE ESTIMATION OF PROFIT RATE SHOULD NOT HAVE BEEN TAKEN UP IN ARBITRARY MANNER BY INVOKING SEC.145(3) OF THE ACT. FURTHER IN CASE OF GROSS RECEIPTS EXCEEDS ITA NO.120/14 2 RS.40,00,000/ - , NO SUCH RATE H AS BEEN LAID DOWN AND WHAT PERCENTAGE OF PROFIT CAN BE DERIVED AND PROFIT RATE COULD BE REDUCED ACCORDING TO THE VOLUME OF THE GROSS RECEIPT SHOULD BE APPRECIATED AND THE PROFIT RATE DETERMINED IS TO BE REDUCED SINCE THIS HONBLE FORUM HAS ALREADY BEEN DET ERMINED THE PROFIT RATE. D. FOR THAT THIS HONBLE FORUM IN THE APPELLANT CASE FOR THE IMMEDIATE SUCCEEDING YEAR HAS TAKEN THE PROFIT RATE @4% ON THE GROSS RECEIPT AMOUNT. SINCE THE NATURE OF WORKS ARE SAME FOR BOTH THE YEARS, THE ADOPTION OF THE PROFIT R ATE IN THE APPELLANT CASE HAS TO BE ACCEPTED. 2. DURING THE COURSE OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE AO HAS ESTIMATED THE PROFIT RATE AT 8% AFTER REJECTING THE BOOKS OF ACCOUNTS ON ACCOUNT OF ITS NON - PRODUCTION. THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND DID NOT FIND FAVOUR WITH HIM. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT IN ASSESSMENT YEAR 2010 - 2011, THE T RIBUNAL HAS ESTIMATED THE NET INCOME AT 4.5% OF THE GROSS RECEIPTS. THEREFORE, THE SAME MAY BE ADOPTED IN THE IMPUGNED ASSESSMENT YEAR. 3. LD. DR PLACED RELIANCE UPON THE ORDER S OF LOWER AUTHORITIES. 4 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES AND IN THE LIGHT OF THE RIVAL SUBMISSI ON, WE FIND THAT THE TOTAL TURN OVER OF THE ASSESSEE IS MORE THAN RS.1 CRORE, THEREFORE, PROVISIONS OF SECTION 44AD CANNOT BE APPLIED BUT THE AO HAS ESTIMATED THE NET PROFIT AT 8% IN THE LIGHT OF THE PROVISIONS OF SECTION 44AD OF THE ACT WITHOUT BRINGING ANY MATERIAL ON RECORD ON THE BASIS OF WHICH THE ESTIMATION WAS DONE. THE CIT(A) HAS CONFIRMED THE SAME. WE ALSO FIND THAT THE ESTIMATION WAS ALSO DONE BY THE TRIBUNAL IN THE ASSESSMEN T YEAR 2010 - 2011 IN THE ASSESSEES ITA NO.120/14 3 OWN CASE AT 4.5% OF THE GROSS RECEIPTS. COPY OF THE ORDER OF THE TRIBUNAL IS PLACED ON RECORD. NO OTHER MATERIAL IS PLACED BEFORE US EITHER BY THE ASSESSEE OR BY THE REVENUE IN ORDER TO DETERMINE THE CORRECT ESTIMATION O F THE NET PROFIT IN THE IMPUGNED ASSESSMENT YEAR. SINCE THE TRIBUNAL HAS ESTIMATED THE NET PROFIT RATE AT 4.5% IN THE ASSESSMENT YEAR 2010 - 2011, WE ARE OF THE VIEW THAT THE SAME SHOULD ALSO BE ADOPTED IN THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, WE SET AS IDE THE ORDER OF CIT(A) AND DIRECT THE AO TO ADOPT THE NET PROFIT RATE AT 4.5% OF THE TOTAL GROSS RECEIPTS AND COMPUTE THE INCOME OF THE ASSESSEE ACCORDINGLY. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCE D IN THE OPEN COURT ON THIS 29 / 05 / 201 5 . SD/ - SD/ - ( . . ) (B. P. JAIN) ( ) (SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 29 /0 5 / 201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , CUTTACK 6. [ / GUAR D FILE. //TRUE COPY//