ITO, CHENNAI V. Shandong Builders Pvt. Ltd., CHENNAI

ITA 1472/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68768 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 01-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI IRS
• Keywords: Rejection of books of accounts
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1472/(MDS)/2013 ASSESSMENT YEAR : 2008-09 THE INCOME-TAX OFFICER, COMPANY WARD-VI(1), CHENNAI 600 034. VS. M/S. SHANDONG BUILDERS PVT. LTD. TIMES PARTNER NO.58, PERAMBUR BARRACKS ROAD, VEPERY, CHENNAI 600 007. PAN AALCS7201F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N.BETGER I, IRS, JCIT RESPONDENT BY : NONE DATE OF HEARING : 30 TH SEPTEMBER, 2013 DATE OF PRONOUNCEMENT : 30 TH SEPTEMBER, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL FILED BY THE REVENUE RELATES TO THE ASSESSMENT YEAR 2008-09. THE APPEAL IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS )-V AT ITA 1472/13 :- 2 -: CHENNAI, DATED 15-3-2013. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3), READ WIT H SECTION 144 OF THE INCOME-TAX ACT, 1961. 2. IN THE PRESENT CASE THE ASSESSEE HAS FILED ITS RETURN OF INCOME ADMITTING A TOTAL INCOME OF ` 3,554/-. THE ASSESSING AUTHORITY REJECTED THE BOOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE ACT AND COMPLETED THE ASSESSM ENT UNDER SECTION 144, TO THE BEST OF HIS JUDGMENT. TH E ASSESSEE WAS EXECUTING LABOUR CONTRACT IN FAVOUR OF M/S.PACL INDIA LIMITED, FOR WHICH THE ASSESSEE-COMP ANY HAD COLLECTED A GROSS RECEIPT OF ` 1,94,10,000/- DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSING OFFICER ESTIMATED THE INCOME OF THE A SSESSEE AT 10 PER CENT OF THE ABOVE STATED GROSS COLLECTION AND DETERMINED THE INCOME OF THE ASSESSEE AT ` 19,41,000/-. 3. IN FIRST APPEAL, THE COMMISSIONER OF INCOME- TAX(APPEALS), RELYING ON THE ORDER OF THE INCOME-TA X APPELLATE TRIBUNAL, DELHI BENCH-F, PASSED IN THE CASE RUPA PR OMOTERS PVT. LTD., RISHIKESH PROPERTIES PVT. LTD., RSM CONS TRUCTIONS PVT. LTD., AND RISHIKESH BUILDCON PVT. LTD. IN ITA NOS.2640, 2641, 2642 & 2643/DEL/2011, MODIFIED THE INCOME AT 2.24 ITA 1472/13 :- 3 -: PER CENT OF THE GROSS RECEIPTS OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. 4. THE REVENUE IS AGGRIEVED AND, THEREFORE, THIS SECOND APPEAL BEFORE US. 5. THE GROUNDS RAISED BY THE REVENUE IN THE PRESENT APPEAL READ AS BELOW:- 2.1 THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO RESTRICT THE INCOME OF THE ASSESSEE COMPANY TO THE EXTENT OF 2.24% OF THE GROSS RECEIPTS AS AGAINST 10% OF GROSS RECEIPTS ASSESSED IN THE ASSESSMENT ORDER. 2.2. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT FOR SUCH A HUGE CLAIM OF PAYMENT OF WAGES, THE ASSESSEE COULD NOT SUBSTANTIATE THE EXPENDITURE WITH BILLS/VOUCHERS. 2.3 THE LD. CIT(A) OUGHT TO HAVE NOTED THAT TO CLAIM THAT THE ENTIRE PAYMENT OF WAGES WAS MADE BY CASH, THERE WAS NO CORRESPONDING CASH WITHDRAWAL FROM THE BANK ACCOUNT OF THE ASSESSEE COMPANY. ITA 1472/13 :- 4 -: 2.4 THE LD. CIT(A) OUGHT TO HAVE APPRECIATE THE FACT THAT THE BANK ACCOUNT OF THE ASSESSEE COMPANY ONLY SHOWED CHEQUES ISSUED TO SOME OTHER COMPANIES WHICH INDICATED THAT THE ASSESSEE COMPANY HAD MADE SOME SUB- CONTRACT PAYMENTS BUT DID NOT DEDUCT TAX. 3.1. THE LD. CIT(A) RELIED ON THE ORDER OF THE ITAT, DELHI IN COMMON ORDER IN ITA NOS. 2640, 2641, 2642 & 2643/DEL/2011 IN THE ASSESSEES SISTER CONCERNS IN THE CASES OF M/S RUPA PROMOTERS P. LTD, RISHIKESH PROPERTIES LTD, RSM CONSTRUCTIONS P. LTD, RISHIKESH BUILDCON LTD FOR THE A.Y. 2008-09. 3.2 IT IS SUBMITTED THAT THE CIT(A)S ORDER RELIED UPON THE ITATS ORDER IN THE ABOVE MENTIONED CASE IS NOT BINDING SINCE THE JURISDICTION HIGH COURT IN THE CASE OF M/S VISVAS PROMOTERS P. LTD (323 ITR 114) HELD THAT OTHER JURISDICTIONAL TRIBUNALS/COURTS ARE NOT BINDING. 6. WHEN THE MATTER WAS CALLED ON FOR HEARING, NOBODY WAS PRESENT FOR THE RESPONDENT-ASSESSEE, INS PITE OF ITA 1472/13 :- 5 -: SERVICE OF NOTICE. THEREFORE, WE PROCEED TO DISPOS E OF THIS APPEAL EX-PARTE, QUA THE ASSESSEE. WE HEARD SHRI T.N.BETGERI, THE LEARNED JOINT COMMISSIONER OF INCO ME-TAX APPEARING FOR THE REVENUE. 7. THE FACTS AND CIRCUMSTANCES AND THE GROUNDS RAISED IN THE PRESENT APPEAL ARE EXACTLY SIMILAR TO THOSE IN THE APPEAL CONSIDERED BY US THROUGH OUR ORDER OF EVEN D ATE IN ITA NO.1474(MDS)/2013 IN THE CASE OF M/S. SANFORD B UILDERS PVT. LTD. THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE REASONS LEADING TO THE ORDER HAVE BEEN DISCUSSED BY US IN DETAIL IN THE SAID LEADING ORDER. AS EVERYTHING RE LEVANT IN THE PRESENT APPEAL IS EXACTLY THE SAME AS REFLECTED IN THE LEADING ORDER, IT IS NOT NECESSARY ON OUR PART TO REPEAT AL L THOSE DISCUSSIONS ONCE AGAIN IN THE PRESENT ORDER. TO MA KE IT SHORT, WE RELY ON OUR OWN ORDER IN ITA NO.1474(MDS) /2013 OF EVEN DATE, PASSED IN THE CASE OF M/S.SANFORD BUILDE RS PVT. LTD., CHENNAI AND HOLD THAT THE COMMISSIONER OF INC OME- TAX(APPEALS) IS NOT JUSTIFIED IN INTERFERING IN THE PROFIT ESTIMATED BY THE ASSESSING AUTHORITY IN HIS BEST JU DGMENT ASSESSMENT. ITA 1472/13 :- 6 -: 8. ACCORDINGLY, THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IS REVERSED AND THE ORDER OF TH E ASSESSING OFFICER, ESTIMATING THE INCOME AT 10 PER CENT OF THE GROSS RECEIPTS, IS RESTORED. 9. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY THE 30 TH OF SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 30 TH SEPTEMBER, 2013. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.