ACIT, Jaipur V. GANGA SINGH, Jaipur

ITA 130/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5286 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 01-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RAJIV SOGANI; ROHAN SOGANI CA DH
• Keywords: Sale consideration of property below Jantri Value; Depreciation
• Section: 143(3); 50C; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI T.R.MEENA, AM VK;DJ VIHY LA -@ ITA NO. 130/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2005-06 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. CUKE VS. GANGA SINGH, PROP. M/S VRINDAVAN CONSTRUCTION, 287/390, JADON NAGAR, OPPOSITE DURGAPURA RAILWAY STATION, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ALZPS 6304 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 131/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. CUKE VS. GANGA SINGH, PROP. M/S VRINDAVAN CONSTRUCTION, 287/390, JADON NAGAR, OPPOSITE DURGAPURA RAILWAY STATION, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ALZPS 6304 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 11/JP/2013 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 131/JP/2013) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 GANGA SINGH, PROP. M/S VRINDAVAN CONSTRUCTION, 287/390, JADON NAGAR, OPPOSITE DURGAPURA RAILWAY STATION, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA- @ PAN/GIR NO.: ALZPS 6304 H IZR;K{KSID @ OBJECTOR IZR;FKHZ @ RESPONDENT ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 2 JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL (DCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJIV SOGANI & SHRI ROHAN SOGANI (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/04/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/05/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THE APPEALS FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARISE AGAINST THE ORDERS DATED 21/11/2012 AND 22/11/2012 PASSED BY THE LD. CIT(A)-II, JAIPUR FOR THE ASSESSME NT YEAR 2005-06 AND 2009-10 WHEREIN THE REVENUE AS WELL AS THE ASSESSEE RAISED FOLLOWING GROUNDS:- GROUND OF ITA NO. 130/JP/2013 REVENUES APPEAL (A.Y . 2005-06) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN: (I) HOLDING THE REOPENING THE CASE U/S 147 OF THE I T ACT, 1961, BAD IN LAW. (II) DELETING THE ADDITION MADE U/S 40(A)(IA) OF TH E IT ACT ON ACCOUNT OF LATE DEPOSIT OF TDS IN THE A.Y. 2005-0 6. GROUND OF ITA NO. 131/JP/2013 REVENUES APPEAL (A.Y . 2009-10) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN: (I) RESTRICTING THE TRADING ADDITION TO RS. 6,18,43 0/- INSTEAD OF RS. 42,32,926/- MADE BY THE A.O. IN RESP ECT ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 3 OF CONSTRUCTION BUSINESS BY INVOKING THE PROVISIONS OF 145(3) AND APPLYING N.P. RATE AT 8%. (II) RESTRICTING THE TRADING ADDITION TO RS. 35,000 /- INSTEAD OF RS. 2,55,523/- MADE BY THE A.O. IN RESPECT OF WIN E BUSINESS BY INVOKING THE PROVISIONS OF 145(3) AND APPLYING G.P. AT 24% GROUND OF ASSESSEES C.O. NO. 24/JP/2013 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ID CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE ID AO IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE BY INVOKING THE PROVISION OF SECTION 145(3 ) AND THEREAFTER CONFIRMING THE TRADING ADDITION OF RS.6,18,430/- OUT OF THE TOTAL TRADING ADDITION OF RS. 42,32,926/- OF CONSTRUCTION BUSINESS MADE BY THE ID . AO . THE ACTION OF THE ID. CIT (A) IS ILLEGAL, UNJUST IFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE REJECTION OF BOOK S AND DELETING THE TRADING ADDITION OF RS.6,18,430/- 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE ID CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE ID AO IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE BY INVOKING THE PROVISION OF SECTION 145(3 ) AND THEREAFTER CONFIRMING THE TRADING ADDITION OF R S. 35,000/- OUT OF THE TOTAL TRADING ADDITION OF RS. 2,55,523/- OF LIQUOR BUSINESS MADE BY THE ID. AO . THE ACTION OF THE ID. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEAS E BE GRANTED BY QUASHING THE REJECTION OF BOOKS AND DELETING THE TRADING ADDITION OF RS.35,000/- ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 4 2. BOTH THE APPEALS OF THE REVENUE AND C.O. OF THE ASSESSEE ARE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, COM MON ORDER IS BEING PASSED IN ALL THE THREE CASES. 3. FIRST WE TAKE ITA NO. 130/JP/2013 FOR THE A.Y. 20 05-06. THE ASSESSEE DERIVED INCOME FROM TAKING CIVIL CONTRACT WORK. HE FILED HIS RETURN FOR A.Y. 2005-06 ON 31/10/2005 DECLARING TOT AL INCOME OF RS. 23,08,975/-. IN THIS CASE, THE SCRUTINY WAS COMPLET ED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) BY THE LD AS SESSING OFFICER AT RS. 32,55,867/- VIDE ORDER DATED 13/12/2007. THE LD ASSESSING OFFICER MADE ADDITION OF RS. 8,96,223/- BY APPLYING NP RATE @ 8% AND ADDITION OF RS. 50,669/- U/S 50C OF THE ACT. THE LD ASSESSING OFFICER OBSERVED THAT IN FORM NO. 3CD, THE ASSESSEE HAD MADE PAYMENT OF RS. 61,97,059/- TO SUB-CONTRACTORS DURING THE MONTH OF JULY 2004 TO JANUARY, 2005 AND TAX HAD BEEN DEDUCTED AT RS. 63,2 10/- PAYABLE IN DIFFERENT MONTHS BEFORE MARCH, 2005 BUT DEPOSITED O N 07/4/2005. ACCORDINGLY, THE LD ASSESSING OFFICER RECORDED THE SATISFACTION U/S 147 OF THE ACT ON THE GROUND THAT TDS DEDUCTED ON AMOUNT OF RS. 61,97,059/- WAS PAID IN APRIL, 2005, ACCORDINGLY, SAME IS NOT AL LOWABLE U/S 40(A)(IA) OF THE ACT. THESE FACTS WERE NOT SCRUTINIZED BY THE ASSESSING OFFICER IN ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 5 ORIGINAL ASSESSMENT U/S 143(3) IN ORDER DATED 13/12 /2007, THEREFORE, THE LD ASSESSING OFFICER ISSUED NOTICE U/S 148 OF T HE ACT. THE ASSESSEE OBJECTED THE REOPENING OF THE ASSESSMENT BEFORE THE LD ASSESSING OFFICER AND RAISED VARIOUS OBJECTIONS ON REOPENING. THE LD A SSESSING OFFICER DISPOSED OF THE OBJECTIONS MADE BY THE ASSESSEE. HE FURTHER HELD THAT THE ASSESSEE RELIED ON AMENDMENT MADE U/S 40(A)(IA) BY THE FINANCE ACT, 2010 W.E.F. 01/4/2010. FINALLY HE HELD THAT NOT ICE U/S 148 OF THE ACT IS VALID AS THE PAYMENTS MADE OF TDS DEDUCTION IN TH E MONTH OF APRIL, 2005. ACCORDINGLY, HE DISALLOWED RS. 61,97,060/- U/S 40(A)(IA) OF THE ACT. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE ON BOTH THE GROUN DS I.E. TECHNICAL AS WELL AS ON MERIT ALSO. HE HELD THAT REOPENING U/S 14 7 IS BAD IN LAW. THERE IS NO OMISSION ON THE PART OF APPELLANT IN DIS CLOSING THE FACT. AS ALL THE FACTS WERE NARRATED IN THE AUDIT REPORT AND ASSE SSING OFFICER HAD SCRUTINIZED THE CASE U/S 143(3) OF THE ACT AND REOP ENING WAS AFTER FOUR YEARS FROM THE RELEVANT ASSESSMENT YEAR. ON MERIT, HE HAS CONSIDERED THE HONBLE CALCUTTA HIGH COURT DECISION IN THE CAS E OF CIT VS VIRGIN ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 6 CREATIONS ITA NO. 302 OF 2011, GA NO. 3200/2011. THE TDS HAS BEEN DEPOSITED BEFORE DUE DATE OF RETURN. THE AMENDMENT M ADE IN SECTION 40(A)(IA) BY THE FINANCE ACT, 2010 IS CLARIFICATORY . 5. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER ON BOT H THE ISSUES. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SUPPORTED THE ORDER OF THE LD CIT(A) AND PRAYED TO UPHOLD THE ORDER PASSED BY HIM. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN TH IS CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 13 /12/2007. NOTICE U/S 148 OF THE ACT WAS ISSUED ON 25/3/2011 FOR A.Y. 2005-06, WHICH IS AFTER FOUR YEARS FROM THE END OF THE ASSESSMENT YEA R. AS THE ASSESSEE HAS DISCLOSED ALL THE PARTICULARS OF INCOME IN THE RETURN AS WELL AS AUDIT REPORT AND THERE IS NO FAILURE ON THE PART OF THE A SSESSEE IN DISCLOSING FULL AND TRUE ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THEREFORE, WE U PHOLD THE ORDER OF THE LD. CIT(A) ON GROUND NO.1. ON MERIT IN GROUND NO . 2 OF THE APPEAL, THE LD CIT(A) HAD GIVEN DETAILS FINDINGS BY CONSIDE RING THE AMENDED PROVISIONS OF SECTION 40(A)(IA) AND THE HONBLE CAL CUTTA HIGH COURT ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 7 DECISION IN THE CASE OF CIT VS. VIRGIN CREATIONS (SU PRA). THE ASSESSEE HAD PAID TDS DEDUCTED ON DUE DATE OF RETURN, ACCORDI NGLY, WE UPHOLD THE ORDER OF THE LD CIT(A). HENCE, THE REVENUES APP EALS FOR THE A.Y. 2005-06 IS DISMISSED. 7. NOW WE TAKE ITA NO. 131/JP/2013 AND C.O. 11/JP/201 3. GROUND NO.1 OF THE REVENUES APPEAL IS AGAINST RESTRICTING THE TRADING ADDITION TO RS. 6,18,430/- INSTEAD OF RS. 42,32,926/- AND GROUN D NO. 1 OF THE ASSESSEES C.O. IS AGAINST CONFIRMING THE ADDITION OF RS. 6,18,430/-. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN TOTAL GROSS CONTRACT RECEIPT OF RS. 13,27,87,152/- FOR THE YEAR UNDER CONSIDERATION AFTER INCLUDING INTEREST ON FDRS OF RS. 20,89,308/ -, NET DISCOUNT RS. 13,161/- INTEREST ON NSC MATURED RS. 78,080/- AND S ALE TAX REFUND RS. 60,936/-, NET PROFIT RS. 83,87,701/- HAD BEEN DECLA RED BY THE ASSESSEE. THE LD ASSESSING OFFICER AFTER REDUCING THE INTEREST INCOME AND DEPRECIATION FROM THE GROSS INCOME, THE NET PROFIT RATE HAD BEEN WORKED OUT @ 4.63%. THE TOTAL CONTRACT RECEIPTS ALSO INCLUDE D SUB-CONTRACT RECEIPTS OF RS. 4,82,75,732/-. THERE WAS NO AGREEMENT BETWEEN THE SUB-CONTRACTOR AND THE ASSESSEE. THE ASSESSEE HAD D EDUCTED TDS ON SUB-CONTRACT PAYMENTS, BUT WORK CARRIED OUT THROUGH SUB-CONTRACTOR IS ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 8 NOT VERIFIABLE. MOST OF PAYMENTS WERE MADE IN CASH S UCH AS SHATTERING CHARGES, PAYMENT TO LABOUR AND WAGES, FREIGHT AND CA RTAGE, CRANE CHARGES, WATER CHARGES ETC. STATEMENT TO EXPENSES AR E CASH PAID TO VARDHMAN CRANE SERVICE FOR CRANE CHARGE FOR 24 HOUR S @ RS. 250 PER HOUR. HE ALSO GAVE THE EXAMPLE OF CASH PAYMENT TO L ABOUR CHARGES, SHATTERING CHARGES AND WATER SUPPLIER. THE ASSESSEE H AD CLAIMED THESE EXPENSES ON SELF MADE VOUCHERS. THE OPENING AND CLOS ING STOCK WERE SHOWN BY THE ASSESSEE ON ESTIMATE BASIS. THE ASSESSEE S CASE HAS BEEN AUDITED U/S 44AB BUT THE AUDITOR HAD NOT POINTED OU T WHETHER EXPENSES ARE SUPPORTED WITH THE VOUCHERS AND THE BALANCE OF C REDITORS AND DEBTORS ARE CONFIRMED. AGE WISE DEBTORS AND CREDITOR S LIMIT HAD NOT BEEN MENTIONED IN AUDIT REPORT. THE ASSESSEE HAD NOT MAINTAINED STOCK REGISTER BUT THE METHOD OF VALUATION AND QUANTIFICA TION OF STOCK HAD BEEN MENTIONED AS FIFO. THEREFORE, THE LD ASSESSING OFFICER PROPOSED TO REJECT THE BOOKS OF ACCOUNT U/S 145(3). IT IS FURTH ER HELD THAT THE ASSESSEE HAS LIQUOR BUSINESS, THERE IS NO SALE VOUC HER TO VERIFY THE SALE VALUE. ACCORDINGLY, HE PROPOSED TO APPLY PROVISIONS OF SECTION 145(3) OF THE ACT ON LIQUOR BUSINESS ALSO. THE ASSESSEE REPLIE D VIDE LETTER DATED 25/11/2011 BY CONSIDERING THE ASSESSEES REPLY, THE LD ASSESSING OFFICER HELD THAT IN A.Y. 2007-08, THE LD CIT(A) CONFIRMED T HE APPLICATION OF NET ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 9 PROFIT RATE @ 8% ON GROSS CONTRACT RECEIPTS SUBJECT TO DEDUCTION OF FINANCIAL CHARGES AND DEPRECIATION. BY CONSIDERING THE HONBLE ITAT DECISION IN THE CASE OF VED PRAKASH PAREEK VS. ITO 3 9 TAX WORLD 176 AND SANTOSH KUMAR RAWAT VS. ITO WARD 5(1), JAIPUR IN ITA NO. 631/JP/2006 WHEREIN NET PROFIT RATE OF 8% AND 10% RE SPECTIVELY HAD BEEN UPHELD. THE LD ASSESSING OFFICER APPLIED THE PR OVISIONS OF SECTION 145(3) OF THE ACT ON THE BASIS OF DEFECTS POINTED O UT BY HIM AND ACCORDINGLY, NET PROFIT RATE @ 8% APPLIED ON CONTRAC T RECEIPTS SUBJECT TO BANK CHARGES AND DEPRECIATION. HE FURTHER APPLIED P ROVISIONS OF SECTION 145(3) ON LIQUOR BUSINESS, APPLIED GP RATE @ 24% AND MADE ADDITION OF RS.14,000/- UNDER THIS HEAD. FINALLY THE LD ASSESSI NG OFFICER DECIDED THE INCOME ON CIVIL CONTRACT BUSINESS AT RS. 1,04,53,23 9/- AND RS. 14,000/- IN THE WINE BUSINESS. 8. THESE ADDITIONS WERE CHALLENGED BEFORE THE LD CIT( A), WHO HAD ALLOWED THE APPEAL PARTLY. THE HONBLE ITAT HAS CONFIR MED A LUMP SUM ADDITION IN A.Y. 2005-06 AND 2006-07 FOR RS. 50,000 /- EACH. THEREAFTER HE ADOPTED THE METHODOLOGY BY ADDING INCREASED NET PROFIT RATE @ 2.26% AND CALCULATED AND APPLIED NP RATE @ 14.61% FO R THE YEAR UNDER CONSIDERATION ON TRADING ADDITION OF RS. 42,32,926/ -. THUS, HE CONFIRMED ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 10 THE ADDITION OF RS. 6,18,430/- AND REMAINING ADDITI ON OF RS. 36,14,496/- HAS BEEN DELETED. 9. NOW THE REVENUE AS WELL THE ASSESSEE ARE IN APPEAL AND C.O. BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE O RDER OF THE ASSESSING OFFICER AND ARGUED THAT THE BOOKS OF ACCO UNT HAS BEEN REJECTED BY THE ASSESSING OFFICER BY POINTING OUT VARIOUS DEFECTS, WHICH HAS BEEN ACCEPTED BY THE ASSESSEE AS SAME HAS NOT B EEN CHALLENGED BEFORE THE LD CIT(A). THE NP RATE APPLIED BY THE ASSE SSING OFFICER @ 8% IS REASONABLE IN THE BUSINESS OF CONTRACT RECEIPTS. FURTHER THERE IS NO SALE BILL IN CASE OF LIQUOR BUSINESS, THEREFORE, HE PRAYED TO REVERSE THE ORDER OF THE LD CIT(A). 10. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SU BMITTED THAT THE METHODOLOGY APPLIED BY THE LD CIT(A) IS NOT ACCEPTA BLE AS THE HONBLE ITAT HAS CONFIRMED THE ADDITION IN ASSESSEES OWN CA SE IN A.Y. 2005-06 AND 2006-07 BY CONFIRMING LUMP SUM ADDITION OF RS. 50,000/- EACH FOR BOTH THE YEARS. HE HAS FURTHER DRAWN OUR ATTENTION O N WORKING OF NP RATE AND ARGUED THAT THE ASSESSEE SALE DURING THE YEAR HAS INCREASED BY 31% COMPARED TO IMMEDIATE PRECEDING YEAR AND 133% C OMPARED TO A.Y. 2007-08 AND ON WHICH NET PROFIT RATE HAS BEEN D ECLARED BY THE ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 11 ASSESSEE AFTER DEPRECIATION AND INTEREST @ 6.31% WHIC H WAS 6.13% IN IMMEDIATE PRECEDING YEAR BUT IN A.Y. 2007-08, THE N P RATE WAS 6.73% COMPARED TO PRECEDING YEAR THE NP RATE HAS INCREASE D ON CONTRACT RECEIPTS, THEREFORE, NO ADDITION CAN BE MADE BY THE ASSESSING OFFICER AND CANNOT BE SUSTAINED BY THE LD CIT(A). IT IS A FA CT THAT A.Y. 2008-09 HAS NOT BEEN SCRUTINIZED. HE FURTHER RELIED ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF INANI MARB LES (P) LTD. (2009) 316 ITR 125 (RAJ) AND HONBLE DELHI HIGH COURT DECISION IN THE CASE OF ACTION ELECTRICALS (2002) 258 ITR 188 (DEL) WHEREIN IT HAS BEEN HELD THAT PAST HISTORY OF THE ASSESSEE WOULD BE ONE OF THE RELIABLE GUIDELINE TO MAKE OR NOT TO MAKE ANY ADDITION. HE FURTHER CALCULATED THE AVERAGE NET PROFIT RATE DISCLOSED ON THE BASIS OF A.Y. 2005-06 TO 2008 -09 I.E. @ 6.17%. THE ASSESSEE HAD DISCLOSED NP RATE @ 6.31% IF THE AD DITION CONFIRMED BY THE LD CIT(A), THE NET PROFIT RATE IS WORKED OUT @ 6.78%, WHICH IS TOTALLY UNJUSTIFIED. THEREFORE, HE PRAYED TO ALLOW T HE C.O., DELETE THE ADDITION CONFIRMED BY THE LD CIT(A) AND DISMISSED TH E REVENUES APPEAL. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE AS SESSEE HAS NOT CHALLENGED THE REJECTION OF BOOKS OF ACCOUNT BEFORE THE LD CIT(A) AND ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 12 ALSO BEFORE US, THEREFORE, IT IS ADMITTED FACT THAT THE ASSESSEES BOOKS ARE NOT RELIABLE. IN PAST, THE ASSESSEE IN A.Y. 200 7-08 HAS BEEN DISCLOSED NP RATE @ 7.17% ON TURNOVER OF RS. 5.7 CR ORES. IN A.Y. 2008- 09, THE ASSESSEE HAS DISCLOSED NP RATE @ 6.13% ON TU RNOVER OF RS. 10.00 CRORES. NOW TURNOVER HAS GONE UP TO RS. 13.26 CRORES ON WHICH THE ASSESSEE HAS DISCLOSED NP RATE @ 6.31%, WHICH IS BETTER THAN NP DISCLOSED IN IMMEDIATE PRECEDING YEAR BUT LOWER THAN A.Y. 2007-08. THEREFORE, UNDER THIS HEAD, WE CONFIRM A LUMP SUM ADD ITION OF RS. 5.00 LACS IN THE INTEREST OF JUSTICE. 12. UNDER THE LIQUOR BUSINESS, THE ASSESSEE HAD SHO WN LOSS OF RS. 2,41,519/- WHICH HAS BEEN ASSESSED BY THE ASSESSING OFFICER AS POSITIVE INCOME BY MAKING ADDITION OF RS. 2,55,519/-. THUS T OTAL ADDITION WAS MADE BY THE ASSESSING OFFICER AT RS. 2,55,519/- ON SALE OF RS. 40.07 LACS BY APPLYING THE GP RATE OF 24%. 12.1 THE LD CIT(A) FOLLOWED THE HONBLE ITAT JAIPUR B ENCH DECISION IN ASSESSEES OWN CASE FOR A.Y. 2006-07 WHERE ADDITION H AS BEEN RESTRICTED TO RS. 35,000/-. 12.2 THE LD AR REITERATED THE ARGUMENTS MADE BEFORE THE LD CIT(A) AND FURTHER SUBMITTED THAT THE HONBLE ITAT HAD DECIDE D THE ASSESSEES OWN ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 13 CASE BY ADDING LUMP SUM ADDITION OF RS. 30,000/- IN A.Y. 2006-07. WHEREAS IN A.Y. 2007-08, THE LD CIT(A) APPLIED NP RA TE @ 3.3% ON THE BASIS OF PREVIOUS YEAR. THE ASSESSEE HAS NOT CLARIFI ED THAT THE APPEAL OF FOR A.Y. 2007-08 HAS BEEN DECIDED OR NOT. THEREFORE, HE PRAYED TO DELETE THE ADDITION. 12.3 THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND ARGUED THAT IN LIQUOR BUSINESS NO ONE C AN RUN BUSINESS ON LOSSES, THEREFORE, THE LD ASSESSING OFFICER RIGHTLY ASSESSED THE ASSESSEES INCOME UNDER THIS HEAD. 13. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS UNDISPUTED FACT THAT IN LIQUOR BUSINESS, THE ASSESSEE HAS SHOWN POSITIVE IN COME IN A.Y. 2007-08 AND 2008-09. HOWEVER, IN A.Y. 2009-10, THE ASSESSEE HAD DISCLOSED NET LOSS AT RS. 2,41,520/- AND THE GP RATE COMPARED TO A.Y. 2006-07 HAS GONE DOWN WHEREAS SALES ARE MORE OR LESS SAME. IN A.Y . 2008-09, THE ASSESSEE HAD SHOWN TOTAL SALE OF RS. 82.01 LACS ON WH ICH THE ASSESSEE HAS SHOWN GP RATE @ 14.94%. THE NP RATE ALSO GONE IN M INUS COMPARED TO PRECEDING YEAR EVEN NP RATE OF PRECEDIN G YEAR IS APPLIED, THE ADDITION GOES MUCH MORE THAN MADE BY THE ASSESS ING OFFICER, ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013 ACIT VS GANGA SINGH 14 THEREFORE, WE REVERSE THE ORDER OF THE LD CIT(A) AND ORDER OF THE LD ASSESSING OFFICER IS CONFIRMED. HENCE, REVENUES AP PEAL ON THIS GROUND IS ALLOWED. 14. IN THE RESULT, APPEAL OF REVENUE AS WELL AS ASSE SSEES C.O. ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/05/2016. SD/- SD/- DQYHKKJR VH-VKJ-EHUK (KUL BHARAT) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH MAY, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-6, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- SHRI GANGA SINGH, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 130 & 131/JP/2013 & CO 11/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR