The ITO,Vapi Ward-1, Vapi V. M/s. A-One Construction Co., Vapi

ITA 1205/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1992 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-02-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 19-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Business income; TDS
• Section: 234B; 40(a)(ia); 194C

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M INCOME-TAX OFFICER, WARD- 1, VAPI. VS. M/S A. ONE CONSTRUCTION CO., 7, RAJHANS COMPLEX, 1 ST FLOOR, NEAR CHAR RASTA, GIDC, VAPI. PAN-AAPFA 1907 G (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI K. MADHUSUDAN, SR. D.R. RESPONDENT BY:- SHRI RAJESH M. UPADHYAY, AR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THESE TWO APPEALS ARE FILED BY THE REVENUE AND THE CROSS OBJECTIONS ARE FILED BY THE ASSESSEE IN RESPONSE TO SUCH APPEALS OF THE REVENUE. ASST. YEAR 2005-06 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN REDU CING THE ADDITION MADE U/S 40(A)(IA) OF IT ACT BY RS.1,50,00 0/- EVEN ITA NO.1205/AHD/2010 ALONG WITH CO NO.2/AHD/2011 & ITA NO.1206/AHD/2010 ALONG WITH CO NO.3/AHD/2011 ASST. YEARS ASST. YEAR 2005-06 & 2006-07 ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 2 THOUGH THE ADDITION WAS MADE AFTER VERIFICATION DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. (2) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN REDU CING THE ADDITION MADE ON ACCOUNT OF LOW GP FROM 23.225 TO 1 5% EVEN THOUGH ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS DURING ASSESSMENT PROCEEDINGS AND DID NOT FURNISH ANY ADDI TIONAL EVIDENCE DURING APPELLATE PROCEEDINGS. CROSS OBJECTION 3. ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CRO SS OBJECTION:- (1) THE LD. AO HAS ERRED IN LAW AND ON FACTS TO HOLD TH AT AMOUNT OF RS.3,37,480/- PAYMENTS TO THE SUB CONTRACTORS IS DI SALLOWABLE APPLYING PROVISION OF SECTION 40A(IA) AND CIT(A) HA S ALSO ERRED IN LAW AND ON FACTS TO HOLD PAYMENTS OF RS.2,02,488 /- ARE EXIGIBLE TO TDS AND TDS PROVISIONS BEING NOT COMPLI ED, SUCH PAYMENTS ATTRACT PROVISION OF SEC.40A(IA) AND CONSE QUENTLY DISALLOWED. (2) WHEN ALL THE BUSINESS RECEIPTS ARE FROM CIVIL CONST RUCTION CONTRACT WORK ON WHICH TDS BEING DEDUCTED, INTEREST U/S 234B IS NOT CHARGEABLE. (3) LD. CIT(A) HAS ERRED IN LAW AND ON FACTS TO RAISE G P BY MORE THAN 2.4% WHEN GP DISCLOSED IS MORE 8% IN CASE OF C IVIL CONSTRUCTION CONTRACT. REVENUES APPEAL 4. THE ASSESSEE FIRM IS ENGAGED IN CIVIL CONTRACT W ORK. THE FIRST ISSUE IN DISPUTE RELATES TO ADDITION ON ACCOUNT OF DISALL OWANCE U/S 40A(IA) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E AO FOUND THAT ASSESSEE HAS NOT DEDUCTED TDS ON THE PAYMENTS AMOUN TING TO RS.3,37,488/-. THE AO ADDED THEM U/S 40A(IA). THE L D. CIT(A) EXAMINED THE PAYMENTS AND FOUND THAT SUM OF RS.1,45,000/- WA S BEYOND THE PURVIEW OF SUCH SECTION 40A(IA) AS THE SAME PERTAIN ED TO MATERIAL SUPPLIED AND ALSO PAYMENTS OF EACH BILL IS BELOW RS.20,000/- ON WHICH NO TDS ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 3 WAS REQUIRED. THE LD. CIT(A) EXAMINED THE TOTAL PAY MENTS AS UNDER, WHICH WERE DISPUTED BY THE AO :- SL. NO. NAME OF THE CONTRACTOR AMOUNT (RS.) 1 BASRAJ CHANBDRAPPA 30000 2 PANDIT 29000 3 RAM NARESH 105000 4 JOGIBHAI PATEL 48000 5 NILESHBHAI 24488 6 JAWAHAR PANCHAL 50000 7 VIYAJAN 25000 8 AKSAR 26000 TOTAL 3,37,488/- HE FOUND THAT INDIVIDUAL PAYMENTS MADE TO SIX CONTR ACTORS ARE MORE THAN RS.20,000/- AND THEREFORE, PROVISIONS OF SECTION 19 4C WOULD BE APPLICABLE. HE ALSO FOUND THAT A SUM OF RS.1,05,000 /- WAS PAID FOR PURCHASE OF SAND ON WHICH PROVISIONS OF SECTION 194 C WOULD NOT BE APPLICABLE. IN ADDITION TO ABOVE HE FOUND THAT A SU M OF RS.40,000/- WAS PAID TO LABOUR CONTRACTOR BALRAJ CHANDRAPPA AND IT WOULD NOT BE HIT BY SECTION 194C. HE ACCORDINGLY ALLOWED A RELIEF OF RS .1,45,000/- OUT OF TOTAL DISALLOWANCE OF RS.3,35,488/-. 5. THE LD. DR SUBMITTED THAT THERE IS NO BASIS FOR LD. CIT(A) FOR HOLDING THAT PROVISIONS OF SECTION 40A(IA) WOULD NO T BE APPLICABLE ON PAYMENT MADE TO THE PARTY FROM WHOM SAND WAS PURCHA SED. IN ANY CASE, ACCORDING TO THE LD. DR ALL THE PAYMENTS WERE ABOVE RS.20,000/- THEREFORE, THEY ARE HIT BY PROVISIONS OF SECTION 19 4C. 6. THE LD. AR ON THE OTHER HAND SUBMITTED THAT LD. CIT(A) HAS VERIFIED EVERY PAYMENT AND THEREAFTER HE HAD COME T O THE CONCLUSION THAT PAYMENTS TOTALING TO RS.40,000/- WERE LESS THAN RS. 20,000/- IN EACH CASE. HE REFERRED TO PAGES 4, 5 & 6 OF HIS PAPER BOOK WHE RE THE PAYMENTS TO ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 4 INDIVIDUAL CONTRACTORS WERE SHOWN ON ACCOUNT OF LAB OUR CHARGES AND THEY WERE NOT MORE THAN RS.20,000/-. 7. WE HAVE HEARD THE PARTIES. THE LD. CIT(A) HAD EX AMINED THE FACTS AND HAS FOUND THAT PAYMENTS APPROXIMATELY OF RS.40, 000/- WERE LESS THAN RS.20,000/- IN EACH CASE AND SECONDLY RS.1,05,000/- FOR PURCHASE OF SAND. HE WAS LEGALLY CORRECT IN HOLDING THAT PROVISIONS O F SECTION 194C WOULD NOT BE APPLICABLE. FOR THE SAKE OF CONVENIENCE SECT ION 194C IS REPRODUCED BELOW: 194C. PAYMENTS TO CONTRACTORS AND SUB-CONTRACTORS.- -(1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS S ECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABO UR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND- - (A) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT ; OR (B) ANY LOCAL AUTHORITY ; OR (C) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTR AL, STATE OR PROVINCIAL ACT ; OR (D) ANY COMPANY, OR (E) ANY CO-OPERATIVE SOCIETY ; OR (F) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDE R ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLANNING, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOWNS AND VILLAGES, OR FOR BOTH ; OR (G) ANY SOCIETY REGISTERED UNDER THE SOCIETIES REG ISTRATION ACT, 1860 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING TO THAT ACT I N FORCE IN ANY PART OF INDIA ; OR (H) ANY TRUST ; OR (I) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY OR UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956), OR (J) ANY FIRM, ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 5 SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO-- (I) ONE PER CENT. IN CASE OF ADVERTISING, (II) IN ANY OTHER CASE TWO PER CENT. OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY), RESPONSIBLE FOR PAYING ANY SUM TO ANY RESI DENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB-CONTRACTOR) IN PURSUANCE OF A CONTRACT WITH THE SUB-CONTRACTOR FOR CARRYING OUT, OR FOR THE SUPPLY OF LABOUR FOR C ARRYING OUT, THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CONTRACTOR OR FOR SUPPLY ING WHETHER WHOLLY OR PARTLY ANY LABOUR WHICH THE CONTRACTOR HAS UNDERTAKEN TO SUPPL Y SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE SUB-CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTH ER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ONE PER CENT. OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN. *PROVIDED THAT AN INDIVIDUAL OR A HINDU UNDIVIDED F AMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSIO N CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUS E (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE SUB-CONTRACTOR, SHALL BE LIABLE TO DEDUCT INCOME-TAX UNDER THIS SUB-SECTION. EXPLANATION I.--FOR THE PURPOSES OF SUB-SECTION (2) , THE EXPRESSION 'CONTRACTOR' SHALL ALSO INCLUDE A CONTRACTOR WHO IS CARRYING OUT ANY W ORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRA CT BETWEEN THE CONTRACTOR AND THE GOVERNMENT OF A FOREIGN STATE OR A FOREIGN ENTERPRI SE OR ANY ASSOCIATION OR BODY ESTABLISHED OUTSIDE INDIA. EXPLANATION II.--FOR THE PURPOSES OF THIS SECTION, WHERE ANY SUM REFERRED TO IN SUB- SECTION (1) OR SUB-SECTION (2) IS CREDITED TO ANY A CCOUNT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER OTHER NAME, IN THE BOOKS O F ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIONS OF THIS SEC TION SHALL APPLY ACCORDINGLY. EXPLANATION III.--FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'WORK' SHALL ALSO INCLUDE-- (A) ADVERTISING ; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCT ION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING ; (C) CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE O F TRANSPORT OTHER THAN BY RAILWAYS ; ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 6 (D)CATERING. (3) NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION(1) OR SUB-SECTION (2) FROM-- (I) ANY SUM CREDITED OR PAID IN PURSUANCE OF ANY C ONTRACT THE CONSIDERATION FOR WHICH DOES NOT EXCEED TWENTY THOUSAND RUPEES ; OR (II) ANY SUM CREDITED OR PAID BEFORE THE 1ST DAY O F JUNE, 1972 ; OR (III) ANY SUM CREDITED OR PAID BEFORE THE 1ST DAY OF JUNE, 1973, IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A CO-OPERATIV E SOCIETY OR IN PURSUANCE OF A CONTRACT BETWEEN SUCH CONTRACTOR AND THE SUB-CONTRA CTOR IN RELATION TO ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK) UNDERTAKEN BY THE CONTRACTOR FOR THE CO-OPERATIVE SOCIETY. (4) WHERE THE ASSESSING OFFICER IS SATISFIED THAT T HE TOTAL INCOME OF THE CONTRACTOR OR THE SUB-CONTRACTOR JUSTIFIES THE DEDUCTION OF INCOM E-TAX AT ANY LOWER RATE OR NO DEDUCTION OF INCOME-TAX, AS THE CASE MAY BE, THE AS SESSING OFFICER SHALL, ON AN APPLICATION MADE BY THE CONTRACTOR OR THE SUB-CONTR ACTOR IN THIS BEHALF, GIVE TO HIM SUCH CERTIFICATE AS MAY BE APPROPRIATE. (5) WHERE ANY SUCH CERTIFICATE IS GIVEN, THE PERSON RESPONSIBLE FOR PAYING THE SUM REFERRED TO IN SUB-SECTION (1) OR SUB-SECTION (2) S HALL, UNTIL SUCH CERTIFICATE IS CANCELLED BY THE ASSESSING OFFICER, DEDUCT INCOME-T AX AT THE RATES SPECIFIED IN SUCH CERTIFICATE OR DEDUCT NO TAX, AS THE CASE MAY BE. 8. FROM THE CAREFUL STUDY OF ABOVE PROVISIONS ONE F INDS THAT IF PAYMENT IS NOT MADE FOR SUPPLY OF LABOUR OF CARRYIN G OUT THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CONTRACTOR OR FO R SUPPLY OF LABOUR THEN PROVISIONS OF SUB-SECTION(2) OF SECTION 194C WILL N OT BE APPLICABLE. HERE THE PAYMENT IS MADE BY THE ASSESSEE FOR PURCHASE OF MATERIAL I.E. SAND, THE ASSESSEE IS NOT DUTY BOUND TO DEDUCT TAX ON THE PAY MENT FOR SAND. IT IS NEITHER FOR SUPPLY OF LABOUR NOR ANY PAYMENT TO ANY SUCH CONTRACTOR FOR CARRYING OUT ANY WORK. 9. SIMILARLY, ANY BILL BELOW RS.20,000/- IN EACH CA SE IS ALSO BEYOND THE APPLICABILITY OF PROVISIONS. ACCORDINGLY, ONCE LD. CIT(A) HAS FOUND EACH PAYMENT WAS LESS THAN RS.20,000/- AND TOTALING TO RS.40,000/- THEN TAX DEDUCTION WAS NOT NEEDED. ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 7 10. WE ACCORDINGLY, UPHOLD THE ORDER OF LD. CIT(A) ON THIS ISSUE AND REJECT THE GROUND RAISED BY THE REVENUE. 11. THE NEXT ISSUE IS ABOUT G.P. ADDITION. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE BOOKS OF ACCOUNTS OF ASSESSEE ARE DEFECTIVE. HE DID NOT PRODUCE COMPLETE BOOKS AND ENTIRE SET OF BILLS AND VOUCHERS OF EXPENDITURE. A SUM OF RS.2 8,16,890/- REMAINED UNSUPPORTED WITH VOUCHERS. HE ACCORDINGLY DID NOT R ELY ON THE BOOKS AND PROCEEDED TO ESTIMATE THE PROFITS. HE APPLIED GP RA TE OF 23.22% AS SHOWN BY THE ASSESSEE IN THE PRECEDING YEAR AND PRO POSED AN ADDITION OF RS.7,94,537/-. 12. THE LD. CIT(A) FOUND THAT THE ADDITION MADE BY THE AO IS ON HIGHER SIDE. GP SHOWN BY THE ASSESSEE IN THIS YEAR IS 12.96%. THE TURNOVER OF THE ASSESSEE HAS SUBSTANTIALLY INCREASE D TO RS.76.97 LACS AS COMPARED TO RS.20.11 LACS IN THE IMMEDIATELY PRECED ING YEAR. THE INCREASED TURNOVER HAS RESULTED IN LOWER PROFITS. C ONSIDERING THESE FACTS LD. CIT(A) DIRECTED TO APPLY GP RATE OF 15% AND ALL OWED RESULTING RELIEF TO THE ASSESSEE. 13. THE LD. DR SUBMITTED THAT LD. CIT(A) HAS FAILED TO APPRECIATE THAT ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS AT THE T IME OF ORIGINAL ASSESSMENT PROCEEDINGS THOUGH SUFFICIENT OPPORTUNIT IES WERE GRANTED. THE ONUS WOULD LIE ON THE ASSESSEE TO JUSTIFY THAT EXPE NSES WERE INCURRED FOR BUSINESS PURPOSES. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE DO NOT FIND ANY CASE FOR INTERFERENCE IN THE ORDER OF LD. CIT(A) TH OUGH APPARENTLY GP RATE OF 15% APPLIED BY THE LD. CIT(A) IS LOWER AS COMPAR ED TO HIGHER GP IN ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 8 THE IMMEDIATELY PRECEDING YEAR, WE CANNOT IGNORE TH E FACT THAT ADDITION MADE UNDER SECTION 40A(IA) TO THE EXTENT OF RS.1,92 ,488/- (RS.3,37,488/- RS.1,45,000/- RELIEF ALLOWED BY LD. CIT(A) HAS BEEN SUSTAINED BY US.. IF THIS ADDITION IS ALSO CONSIDERED THEN GP WOULD BE H IGHER. HOWEVER, ADDITION UNDER SECTION 40A(IA) IS SUBJECT TO DEDUCT ION OF ANY PAYMENT TO TAX IN SUBSEQUENT YEAR AND, THEREFORE, THIS ADDITIO N AS SUCH IS NOT CONSEQUENTIAL PART OF TRADING ADDITION. WE HOLD THA T GP RATE OF 15% APPLIED BY LD. CIT(A) IS REASONABLE AND IS THEREFOR E, CONFIRMED. THE APPEAL FILED BY THE REVENUE IS DISMISSED. 15. IN THE CO FILED BY THE ASSESSEE THE FIRST ISSUE IS REGARDING SUSTAINING ADDITION UNDER SECTION 40A(IA). IN THE D EPARTMENTAL APPEAL WE HAVE HELD THAT LD. CIT(A) WAS JUSTIFIED IN CONFIRMI NG THE ADDITION AND GIVING THE RELIEF TO THE EXTENT HE HAS GIVEN. SINCE THERE IS NO MATERIAL CHANGE IN FACTS WITH RESPECT TO THE C.O., WE CONFIR M THE ORDER OF LD. CIT(A) IN THIS REGARD. 16. THE THIRD GROUND RELATES TO GP ADDITION. WHILE DISPOSING OF THE DEPARTMENTAL APPEAL WE HAVE HELD THAT APPLICATION O F 15% GP RATE IS REASONABLE, THERE IS NO CASE TO MAKE ANY INTERFEREN CE IN THE ORDER OF LD. CIT(A), THEREFORE, FOLLOWING OUR DECISION IN THE DE PARTMENTAL APPEAL, WE DISMISS THIS GROUND OF ASSESSEE. 17. THE SECOND GROUND RELATES TO THE ISSUE WHETHER INTEREST UNDER SECTION 234 IS CHARGEABLE IF ENTIRE RECEIPTS ON WHI CH TDS IS MADE IS FROM CIVIL CONSTRUCTION. 18. WE HAVE HEARD THE PARTIES. IN OUR CONSIDERED VI EW THERE IS NO CASE FOR INTERFERENCE. IT IS BECAUSE CHARGING OF INTERES T UNDER SECTION 234B IS MANDATORY AND IT IS CHARGED ON ASSESSED INCOME. IF ASSESSED INCOME TAXED ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 9 IS MORE THAN THE TAX PAID BY THE ASSESSEE BY WAY OF ADVANCE TAX OR TDS INTEREST UNDER SECTION 234B WOULD BE LEVIABLE. THIS GROUND IS REJECTED. AS A RESULT, BOTH THE APPEAL OF REVENUE AND THE CROSS OBJECTION OF ASSESSEE ARE DISMISSED. ASST. YEAR 2006-07 19. IN THIS YEAR THE REVENUE HAS RAISED FOLLOWING G ROUND:- (1) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN REDU CING THE ADDITION MADE ON ACCOUNT OF LOW GP FROM 23.225 TO 1 5% EVEN THOUGH ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS DURING ASSESSMENT PROCEEDINGS AND DID NOT FURNISH ANY ADDI TIONAL EVIDENCE DURING THE APPELLATE PROCEEDINGS. 20. THE ASSESSEE HAS RAISED FOLLOWING GROUND IN ITS CROSS OBJECTION :- (1) LD. CIT(A) HAS ERRED IN LAW AND ON FACTS TO SUSTAIN GP 15% WHEN ASSESSEE HAS SHOWN GP NEARLY 12%. 21. IN SHORT THE ISSUE RELATES TO CONFIRMING THE AD DITION BY APPLYING GP RATE OF 15% ON CIVIL CONTRACT WORK. THE AO HAD APPL IED GP OF 23.22% WHICH WAS REDUCED BY LD. CIT(A) TO 15%.. 22. THE DEPARTMENT IS IN APPEAL AGAINST THE REDUCTI ON MADE BY LD. CIT(A) WHEREAS ASSESSEE HAS FILED CROSS OBJECTION A GAINST SUSTAINING PART OF THE ADDITION. 23. THE FACTS RELATING TO THIS YEAR ARE ALSO THE SA ME AS IN ASST. YEAR 2005-06. THE ASSESSEE HAS SHOWN TURNOVER OF RS.1,59 ,60,369/- ON WHICH IT HAS SHOWN GP RATE OF 12.76%. THE ASSESSEE DID NO T PRODUCE THE BOOKS OF ACCOUNT, BILLS AND VOUCHERS. THE AO RESORTED TO ESTIMATION AFTER NOT RELYING ON THE BOOKS. HE APPLIED GP RATE OF 23.22% REJECTING THE GP RATE AT 11.7% SHOWN BY THE ASSESSEE RESULTING IN AN ADDI TION OF RS.18,29,137/- . ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 10 24. THE LD. CIT(A) REDUCED THE GP RATE TO 15%. 25. WE HAVE HEARD THE PARTIES. THE FACTS RELATING T O THIS YEAR ARE THE SAME AS IN ASST. YEAR 2005-06. THEREFORE, WE CONFIR M THE APPLICATION OF GP RATE OF 15% WHICH IS REASONABLE LOOKING TO THE C ONDUCT OF THE ASSESSEE IN NOT SUPPORTING THE EXPENDITURE INCURRED BY IT AND NOT PRODUCING ENTIRE SET OF BOOKS BEFORE THE AO FOR HIS EXAMINATION. AS A RESULT, BOTH THE APPEAL AND THE C.O. ARE DISMISSED. 26. IN THE RESULT, THE APPEALS OF THE REVENUE AND T HE CROSS OBJECTIONS FILED BY THE ASSESSEE ALL ARE DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 11/2/11. SD/- SD/- (BHAVNESH SAINI) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 11/2/11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NOS.1205 & 1206/AHD/2010 WITH CO NOS.2 & 3/AHD/ 2011 ASST. YEARS 2005-06 & 2006-07 11 1.DATE OF DICTATION 7/2/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 8/2/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..