The Assistant Commissioner of Income Tax, Srinagar V. M/s G.R.G. Construction Co., Srinagar

ITA 137/ASR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9319 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-05-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAGAT

Judgement Text

IN THE INCOME TAX APPELLA TE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.S.SAINI, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.137(ASR)/2017 ASSESSMENT YEAR:200 9-10 ASST. CIT, CIRCLE-3, SRINAGAR. VS. M/S. G.R.G CONSTRUCTION CO. DABTAL ZAINA KADAL, SRINAGAR, KASHMIR. [ [PAN:AAGFG 2677K] (APPELLANT) (RESPONDENT) APPELLANT BY: SH. CHARAN DASS (LD. DR) RESPONDENT BY: SH. M.R. B HAGAT DATE OF HEARING: 21.05.2019 DATE OF PRONOUNCEMENT: 21.06.2019 ORDER PER N.K.CHOUDHRY, JM: THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE DEPAR TMENT AGAINST THE ORDER DATED 09/11/2016 PASSED BY THE LD. CIT(A), J&K, JAMMU U/S 250(6) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS T HE ACT) WHEREIN THE LD. CIT(A) PARTLY UPHELD THE ASSESSMENT ORDER. 2. THE BRIEF FACTS ARE ALREADY ON RECORD, HENCE, FOR THE SA KE OF CONVENIENCE AND BREVITY ARE NOT REPRODUCED HEREIN. 3. THE REVENUE DEPARTMENT IS AGGRIEVED AGAINST THE N.P RATE @ 4% OF THE GROSS RECEIPTS SUBJECT TO ALLOWANCE OF SALARY AND INTE REST TO PARTNERS AS APPLIED BY THE LD. CIT(A) AGAINST THE N.P. RATE @ 1 0% ON GROSS RECEIPT/ TURN OVER APPLIED BY THE ASSESSING OFFICER. ITA NO.137 /ASR/2017 (A.Y.2009-10) ACIT VS. M/S. G.R.G CONSTRUCTION CO. 2 4. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER IN THE ASSESSMENT MADE U/S 14 3(3) OF THE ACT DETERMINED THE INCOME OF THE ASSESSEE AT RS.94,63,464/ -BY APPLYING A NET PROFIT RATE OF 10% ON THE GROSS RECEIPTS, WHILE FO LLOWING THE ORDER PASSED IN M/S. SHIVAM CONSTRUCTION CO. VS. CIT, BY THE ITAT BE NCH AT CHANDIGARH. AGAINST WHICH THE ASSESSEE PREFERRED THE APPEAL BEFORE TH E LD. CIT(A) WHILE OBSERVING THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND EXECU TED A CONSTRUCTION WORK IN REMOTE AREA OF KASHMIR. THE LD. CIT(A) HIMSEL F APPLYING A NET PROFIT RATE OF 7% ON GROSS CONTRACT RECEIPTS IN ALL SUCH CASES OF CON TRACTORS WORKING IN THAT AREA BY FOLLOWING ORDER PASSED BY JURISDICTIO NAL TRIBUNAL (ITAT BENCH, AMRITSAR) IN THE CASE OF M/S. CONSTRUCTION ENGINEERS, SRIN AGAR (ITA NO.493/ASR/2010 DATED 11/05/2012. THUS, IN ORDER TO T AKE A CONSISTENT VIEW AND BY FOLLOWING JUDICIAL DISCIPLINE A NET PROFIT RAT E OF 7% OF THE GROSS CONTRACT RECEIPT SHOULD BE APPLIED IN THE CASE ALSO. HOWEVE R, AS THE ASSESSEE IS A SUB-CONTRACTOR AND HAS RECEIVED A NET PAYMENT OF 4% OF THE GROSS CONTRACT RECEIPT AS PER AGREEMENT EXECUTED BETWEEN THE A SSESSEE AND THE MAIN CONTRACTOR. THUS, A NET PROFIT RATE OF 4% OF THE GROSS CONTRACT RECEIPT IS FOUND TO BE REASONABLE SUBJECT TO ALLOWANCE OF SALARY AN D INTEREST TO THE PARTNERS, BEING A PARTNERSHIP FIRM. ACCORDINGLY, A NET PROFIT OF RS.37,85,385/- IS WORKED OUT IN THE CASE OF THE APPELL ANT. IN OUR CONSIDERED VIEW THE ISSUE DECIDED BY THE LD. CIT (A) WHILE APPLYING A NET PROFIT RATE @ 4% BY FOLLOWING THE J UDGMENT OF THE JURISDICTIONAL BENCH IN THE CASE OF M/S CONSTRUCTION ENGINE ERS, SRINAGAR (SUPRA), HENCE, WE DO NOT FIND ANY CONTRARY MATERIAL/V IEW/JUDGMENT AGAINST THE ASSESSEE IN ORDER TO SUSTAIN NET PROFIT RATE @ 10% AS APPLIED BY THE ASSESSING OFFICER. THEREFORE, THE ORDER UNDER CHALLENGE DOES NOT SUFFER FROM ANY PERVERSITY, ILLEGALITY AND IMPROPRIETY, HENCE, TH E SAME IS DOES NOT REQUIRE ANY INTERFERENCE. ITA NO.137 /ASR/2017 (A.Y.2009-10) ACIT VS. M/S. G.R.G CONSTRUCTION CO. 3 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE DEPA RTMENT STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.2019. SD/- SD/- (N.S.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 21.06.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S. G.R.G CONSTRUCTION CO., DABTAL ZAINA KADAL, SRINAGAR, KASHMIR. (2) THE ASST. CIT, CENTRAL CIRCLE-3, SRINAGAR. (3) THE CIT(A)-J&K, JAMMU (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER