M/s Balwan Singh & Co., Rohtak V. ITO, Rohtak

ITA 1627/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3816 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 12-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Assessee Lawyers: RAJ KUMAR BATRA
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1627/DEL/2010 ASSESSMENT YEAR: 2006-07 BALWAN SINGH & CO., H.NO. 889/29, KAMAL COLONY, ROHTAK, NEW DELHI. AABFB3521A VS. ITO, WARD 1, ROHTAK (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJ KUMAR BATRA, ADV. RESPONDENT BY: J.P. CHANDRAKAR, SR. DR O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER OF CIT(A) DATED 18.01.2010 FOR A.Y. 2006-07. 2. THE ASSESSEE IS A CIVIL CONTRACTOR. FOR THE FAI LURE OF THE ASSESSEE TO ATTEND THE ASSESSMENT PROCEEDINGS, THE AO PASSED OR DER U/S 144 OF I.T. ACT, 1961, THEREBY ASSESSING NET PROFIT RATE OF 8% ON TH E TOTAL RECEIPTS OF RS. 3,09,97,806/- AS AGAINST RETURNED INCOME OF RS. 35, 640/-. AN APPEAL WAS FILED BEFORE CIT(A) WHO HAS ENHANCED THE NET PROFIT RATE FROM 8% TO 12% ON THE GROUND THAT ASSESSEE DID NOT PRODUCE BOOKS OF ACCOU NT DURING THE COURSE OF 2 ITA NO. 1627/DEL/2010 ASSESSMENT PROCEEDINGS AND ALSO DURING THE COURSE O F APPELLATE PROCEEDINGS. REFERRING TO THE DECISION OF HONBEL PUNJAB & HARYA NA HIGH COURT IN THE CASE OF M/S PRABHAT KUMAR, CONTRACTOR SIRSA, IN ITA NO. 293 OF 2008 DATED 14.11.08, WHEREIN NET PROFIT RATE OF 12% WAS HELD APPLICABLE, LD. CIT(A) HAS ENHANCED THE NET PROFIT RATE. THE ASSESSEE IS AGGRIEVED, HENCE IN APPEAL. 3. IT WAS SUBMITTED BY THE LD. AR THAT LD. CIT(A) I N ANOTHER CASE REFERRING TO THE AFOREMENTIONED DECISION IN THE CASE OF M/S PRAB HAT KUMAR, CONTRACTOR (SUPRA) HELD APPLIED THE RATE OF 12% AND THE MATTER WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF NASEEB SINGH, CONTRACTOR VI DE ORDER DATED 30 TH OCTOBER, 2009 AND THE MATTER WAS RESTORED BACK TO THE FILE O F AO IN ITA NO. 2926/DEL/09. HE INVITED OUR ATTENTION TOWARDS COPY OF ORDER PLAC ED AT PAGES 8 TO 9 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT ACCORDING TO THE HISTORY OF ASSESSEES CASE, IN EARLIER YEARS EVEN AS PER ORDERS PASSED U/ S 143(3), THE NET PROFIT RATE HAS BEEN ASSESSED AT 0.75 & 0.94 PER CENT. HE IN T HIS REGARD REFERRED TO THE CHART GIVEN IN THE WRITTEN SUBMISSIONS IN RESPECT O F EARLIER YEARS WHICH READ AS UNDER: - A.Y. GROSS RECEIPTS RETURNED INCOME ADDITION INCOME ASSESSED ORDER PASSED P ROFIT RATIO 01-02 8887313 24320 43000 67330 143(3) ITO, WARD 1, ROHTAK, PHOTOCOPY ORDER ATTACHED 0.75% 02-03 19633999 27687 - 27687 - 0.14% 03-04 - 23336 - 23336 - - 04-05 - 22437 - 22437 - - 05-06 14235059 24148 134485 134485 143(3), ITO, WARD 1, ROHTAK, PHOTOCOPY ORDER ATTACHED 0.94% 4. THUS, IT WAS PLEADED BY LD. AR THAT THE MATTER M AY BE RESTORED BACK TO THE FILE OF AO FOR DENOVO CONSIDERATION AS DURING T HE COURSE OF ASSESSMENT 3 ITA NO. 1627/DEL/2010 PROCEEDINGS ASSESSEE COULD NOT ATTEND AND, THEREFOR E, THE AO HAS PASSED AN EX-PARTE ORDER AND ASSESSEE COULD NOT GET THE OPPOR TUNITY OF HEARING. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF AO & CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. UNDER SIMILAR FACTS, TR IBUNAL HAS RESTORED THE ASSESSMENT TO THE FILE OF AO IN THE CASE OF NASEEB SINGH, CONTRACTOR (SUPRA). IN THE SAID CASE ONE OF US (J.M.) IS A PARTY. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL FROM THE SAID ORDER IS BEING REPRODUCED BE LOW: - 4. THE ASSESSEE PREFERRED FURTHER APPEAL BEFORE CI T(A). IT WAS CONTENDED THAT THE ASSESSEE WAS NOT AFFORDED REASONABLE OPPORTUNITY OF BEING HEARD. COMMISSIONE R (APPEALS) REJECTED SAID CONTENTION HAVING FOUND THA T SEVERAL OPPORTUNITIES WERE GIVEN. THE ASSESSEE ALS O CONTENDED THAT THOUGH BEST JUDGMENT, ASSESSMENT IS MADE, THE SAME CANNOT BE ARBITRARILY BE MADE AND PA ST HISTORY OF THE ASSESSEE SHOULD BE CONSIDERED. IT W AS ALSO CONTENDED THAT BOOKS OF ACCOUNTS ARE AUDITED. REPORT HAS BEEN FILED WITH THE RETURN. RELIANCE WA S PLACED ON THE DECISION OF TRIBUNAL IN THE CASE OF P URISONS AUTO FINANCE PVT. LTD. AS REPORTED IN 003 ITD 764. LD. CIT(A) HELD THAT FILING OF AUDIT REPORT IS NOT SUFF ICIENT, THE ASSESSEE IS ALSO DUTY BOUND TO PRODUCE BOOKS OF ACCOUNTS AND SUPPORTED BY VOUCHERS/BILLS. THE ASSE SSEE HAS NOT PRODUCED THE SAME. THEREFORE, REJECTION OF BOOKS IS JUSTIFIED. LD. COMMISSIONER (APPEALS) FOU ND THAT HONBLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF M/S PRABHAT KUMAR CONTRACTOR SIRSA IN ITA NO. 293 O F 2008 DATED 14.11.08 HAVE UPHELD THE NET PROFIT RATE OF 4 ITA NO. 1627/DEL/2010 12% ON CONTRACT RECEIPTS EXCLUDING COST OF MATERIAL SUPPLIED BY THE DEPARTMENT. APPLYING THE SAME DECI SION LD. COMMISSIONER (APPEALS) DIRECTED TO COMPUTE THE INCOME AT 12% OF THE CONTRACT RECEIPTS EXCLUDING TH E MATERIAL SUPPLIED BY THE DEPARTMENT. THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE AT TH E TIME OF HEARING. WE HAVE HEARD LD. DR WHO SUPPORTED THE ORDER OF LD. COMMISSIONER (APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, IT IS TRUE THAT THE ASSESSEE IS A CIVIL CONTRACTOR BUT WHETHER HE I S GOVT. CONTRACTOR OR NOT IS NOT MADE OUT. IT IS ALSO NOT MADE OUT AS TO WHETHER ANY MATERIAL WAS SUPPLIED BY THE CONTRACTORS OR NOT. THE COMMISSIONER (A) HAS ALSO FAILED TO CONSIDER THE PAST HISTORY OF THE ASSESSEE ITSELF , IT IS SETTLED LAW THAT EVEN IF THE ASSESSMENT IS MADE U/S 144 BASED ON BEST JUDGMENT SUCH JUDGMENT SHOULD NOT BE ARBITRARY AND WHICH IGNORES THE PAST HISTORY WITHOU T ASSIGNING SPECIFIC REASONS. THE DETAILS OF PAST HI STORY IS NOT AVAILABLE TO US ALSO. WE, THEREFORE, SET ASIDE THE ISSUE TO THE FILE OF AO TO EXAMINE THE PAST HISTORY AND THE PROFIT EARNED IN EARLIER YEARS AS ALSO TO EXAMINE W HETHER THE ASSESSEE IS GOVT. CONTRACTOR IN RESPECT OF WHOM THE MATERIAL IS SUPPLIED BY THE CONTRACTEE. THE ASSESS EE IS DIRECTED TO COOPERATE IN FRAMING FRESH ASSESSMENT A S OTHERWISE THE AO MAY DRAW ADVERSE INFERENCE. 7. FOR STATISTICAL PURPOSES, THE APPEAL IS TREATED AS ALLOWED. 7. IN THIS VIEW OF THE SITUATION, ACCEPTING THE REQ UEST OF LD. AR, WE RESTORE THE PRESENT ASSESSMENT TO THE FILE OF AO WITH SIMIL AR DIRECTIONS AS ARE GIVEN IN THE CASE OF NASEEB SINGH, CONTRACTOR. WE DIRECT AC CORDINGLY. 5 ITA NO. 1627/DEL/2010 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.6.2010 (SHAMIM YAHYA) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: 11.6.2010 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR