Chandrakant Maruti Nalawade, Sangli V. Jt. CIT, Sangli

ITA 1398/PUN/2013

• Counselvise Citation: 139824514 RSA 2013
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1398 / P N/ 20 1 3 ASSESSMENT YEAR : 200 6 - 07 CHANDRAKANT MARUTI NALAWADE, A/P. LINGNUR, TAL. MIRAJ, SANGLI VS. JT. CIT, RANGE 1, SANGLI (APPELLANT) (RESPONDENT) PAN NO. AALPN4420E APPELLANT BY: SHRI C.H. NANIWADEKAR RESPONDENT BY: SHRI S.P. WALIMBE DATE OF HEARING : 30 - 0 4 - 2014 DATE OF PRONOUNCEMENT : 26 - 05 - 2014 ORDER PER R.S . PADVEKAR , JM : - THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IM PUGNED ORDER OF THE LD. CIT(A) , KOLHAPUR DATED 23 - 05 - 2013 FOR THE A.Y. 200 6 - 07. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUND IN THE APPEAL. 1. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING ADDITION OF RS.3,74,903 TO THE GROSS PROFIT. HE FAILED TO APPRECIATE PAST HISTORY OF G.P. PERCENTAGE AS ALSO THE EVIDENCE LED AND ARGUMENTS ADVANCED IN THIS BEHALF. 2. THE FACTS WHICH ARE REVEALED FORM THE RECORD AS UNDER. THE ASSESSEE IS ENGAGED IN CIVIL CONTRACT WORKS OF ROADS, CANAL AND PIPELINES. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS SHOWN THE CONTRACT RECEIPT S OF RS.478.17 LA CS ON WHICH HE DECLARED THE GROSS PROFIT OF RS.200 LACS WH ICH WAS 53.89% OF THE CONTRACT RECEIPTS. AS NOTED BY THE ASSESSING OFFICER , THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF CONTRACT RECEIPTS VIS - - VIS GROSS PROFIT, GROSS PROFIT PERCENTAGE TO CONTRACT 2 ITA NO. 1398/PN/2013, CHANDRAKANT MARUTI NALAWADE, SANGLI RECEIPTS, NET PROFIT, NET PROFIT PERCENTAGE TO CONTR ACT RECEIPTS ETC. FOR A.Y. 2006 - 07 AND IMMEDIATELY PRECEDING TWO YEARS. IT APPEARS THAT THE ASSESSEE FILED THE DETAILS WHICH ARE REPRODUCED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IN THE TABULAR FORM. 2.1. AS NOTED BY THE ASSESSING OFFICER , TH E ASSESSEE HAS DEBITED VARIOUS EXPENSES TO THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT MANY OF THE EXPENSES WERE SUPPORTED BY SELF - MADE VOUCHERS. THE ASSESSEE HAD CLAIMED EXPENSES TOWARDS THE SUB - CONTRACT PAYMENTS TO THE EXTENT OF RS.1,06,97,936/ - AS COMPARED TO RS.60,58,102/ - FROM EARLIER YEAR. IN THE OPINION OF THE ASSESSING OFFICER , IN THE CONTRACT WORKS IN MOST OF THE CASES THE NET PROFIT IS DISCLOSED MORE THAN @ 5% BUT THE ASSESSEE HAS MERELY DECLARED NET PROFIT AT 3 .99%. THE ASSESSING OFFICER HAS NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AR OF THE ASSESSEE WAS CONFRONTED THAT MANY OF THE EXPENSES HAVE BEEN SUPPORTED BY SELF - MADE VOUCHERS WHICH ARE NOT PROPERLY PREPARED AND ALSO DO NOT REFLECT PROPER LY , EITHER THE NAME OF THE PAYEES/RECIPIENTS AND SIGNATURE OF THE ISSUING AUTHORITY. IT APPEARS THAT THE ASSESSING OFFICER DISCUSSED ABOUT THE ISSUE OF THE NET PROFIT WITH AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT OTHER THAN THE PAYMENT TO THE SUB - CO NTRACT OF RS.1,06,97,936/ - THE 5% FOR THE WORKING OF THE NET PROFIT SHOULD BE APPLIED ON THE BALANCE AMOUNT OF RS.3,71,19,188/ - WHICH WORKED OUT 1.01% (5% - 3.99%). THE ASSESSING OFFICER, THEREFORE, MADE THE ADDITION OF RS.3,74,903/ - AS AGREED BY THE ASSE SSEES AR . 3. IN SUM AND SUBSTANCE AS NOTED BY THE ASSESSING OFFICER THE AUTHORIZED REPRESENTATIVE AGREED F OR THE SAID ADDITION. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD. CIT(A) BUT LD. CIT(A) DID NOT ADJUDICATE THE ISSUE AND HENCE, FOR T HE FIRST ROUND OF APPEAL BEFORE THE TRIBUNAL IT WAS PLEADED BY THE ASSESSEE THAT THE SAID ISSUE MAY BE 3 ITA NO. 1398/PN/2013, CHANDRAKANT MARUTI NALAWADE, SANGLI RESTORED TO THE FILE OF THE CIT(A) AS THE RELEVANT GROUND WAS NOT ADJUDICATED. THE TRIBUNAL RESTORED THE ISSUE TO THE FILE OF THE LD. CIT(A) WITHOUT EXP RESSING ANYTHING ON THE MERIT. THE LD. CIT(A) ADJUDICATED THE SAID ISSUE AND CONFIRMED THE ADDITION. IT WAS PLEADED BEFORE THE LD. CIT(A) THAT UNDER MISTAKEN BELIEF OF FACTS AND LAW, THE AUTHORIZED REPRESENTATIVE AGREED FOR THE SAID ADDITION. THE OPERAT IVE PART OF FINDING OF THE LD. CIT(A) ARE AS UNDER: 5. I HAVE CONSIDERED THE APPELLANT'S SUBMISSIONS AS ABOVE AND GONE THROUGH THE ASSESSMENT ORDER. IT IS A FACT THAT MANY OF THE EXPENSES HAVE BEEN SUPPORTED BY SELF - MADE VOUCHERS WHICH WERE NOT PROPERLY PR EPARED AND WHICH DO NOT PROPERLY REFLECT EITHER THE NAME OF PAYEES AND SIGNATURE OF THE ISSUING PERSON. IN VIEW OF THIS FACT, THE APPELLANT AND HIS AUTHORIZED REPRESENTATIVE, SHRI GORE AGREED FOR THE ADDITION SINCE THE NET PROFIT WAS TOO LOW. THE ADDITION MADE IS VERY NOMINAL. NOW THE APPELLANT DOES NOT AGREE WITH THE ASSESSING OFFICER. COPY OF CERTAIN VOUCHERS AND BILLS WERE FURNISHED. THE BILLS HAVE NO SERIAL NUMBERS AND ALSO THERE ARE NO DATES ON THESE BILLS. IN RESPECT OF VOUCHERS, ALTHOUGH DATES ARE ME NTIONED BUT THE SERIAL NUMBERS ARE MISSING. THE APPELLANT HAS SHOWN NET PROFIT OF 3.99% WHICH IS TOO LOW. APPELLANT'S CONTENTION THAT SINCE THE NET PROFIT IS MORE THAN THE NET PROFIT IN THE LAST YEAR THEREFORE, NO ADDITION SHOULD BE MADE CANNOT BE ACCEPTED IN VIEW OF THE ABOVE OBSERVATION REGARDING BILLS AND VOUCHERS. THEREFORE, THE GROUND IS REJECTED AND THE ADDITION IS SUSTAINED. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE LD. COUNSEL RELIED O N THE DECISION IN THE CASE OF BAMBINO INVESTMENT & TRADING CO. LTD. VS. DY. CIT 2 SOT 585 (MUMBAI) IN SUPPORT OF HIS CONTENTION THAT EVEN IF THE CONCESSION IS GIVEN BY THE ASSESSEE UNDER THE MISTAKEN BELIEF OF LAW THAT IS NOT BINDING AND THE ASSESSEE CAN C ONTEST THE SAME BEFORE HIGHER AUTH O R I TY . IN OUR HUMBLE OPINION, THE DECISION IS NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IT IS NOT DISPUTED 4 ITA NO. 1398/PN/2013, CHANDRAKANT MARUTI NALAWADE, SANGLI ABOUT THE FACT THAT THE ASSESSEE S AUTHORIZED REPRESENTATIVE AGREED FOR THE ADDITIONS BEFORE THE ASSESS ING OFFICER . IN OUR OPINION THE WORKING OF THE NET PROFIT IS A QUESTION OF FACT AND NO LAW IS INVOLVE . WE FIND NO MERIT IN THE APPEAL FILED BY THE ASSESSEE. ACCORDINGLY, THE GROUND TAKEN BY THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, THE ASSESSEES AP PEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 26 - 05 - 20 1 4 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 26 TH MAY, 20 1 4 COPY TO 1 ASSESSEE 2 DEPAR TMENT 3 THE CIT(A) , KOLHAPUR 4 THE CIT, KOLHAPUR 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE