M/s. Ram Sevak Shaw, Durgapur V. ACIT, Circle - 2, Durgapur, Durgapur

ITA 1646/KOL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70445 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 29-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S M SURANA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1646 / KOL / 2011 ASSESSMENT YEAR :2008-09 M/S. RAM SEVAK SHAW ELECTRIC SUB-STATION NO.3, MAMC, DVC MORE, DURGAPURE 713 216 [ PAN NO.ALAPS 0042 F ] V/S . ACIT, CIRCLE-2, DURGAPURE / APPELLANT .. / RESPONDENT) /BY APPELLANT SHRI S.M. SURANA, AR /BY RESPONDENT NONE /DATE OF HEARING 26-12-2013 /DATE OF PRONOUNCEMENT 26-12-2013 / // / O R D E R PER SHAMIM YAHYA, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-DURGAPUR DATED 06-09-2011 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. AT THE OUTSET, IT IS NOTED THAT LD. DR IN THIS C ASE HAS SOUGHT ADJOURNMENT FOR THE REASON THAT HE IS ON C.L. HOWEV ER, WE ARE NOT INCLINED TO ACCEPT THE REVENUES ADJOURNMENT REQUEST AS NECESSA RY ALTERNATIVE ARRANGEMENT SHOULD HAVE BEEN DONE. ACCORDINGLY, WE REJECT THE SAME. ITA NO.1646/KOL2011 A.Y.2008-09 M/S RAM SEVAK SHAW V. ACIT CIR-2 DGP PAGE 2 3. THE ASSESSEE HAS SEVERAL GROUND, HOWEVER, ONLY F OLLOWING GROUNDS HAVE BEEN PRESSED:- (1) THAT CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.30 LAKH ON ACCOUNT OF THE CONTRACT BUSINESS. (2) THAT CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,09,250/- AS INTEREST OF FIXED DEPOSIT. 4. APROPOS THE ADDITION OF RS.30 LAKHS:- ON THIS IS SUE, ASSESSING OFFICER NOTED THAT ASSESSEE IS BASICALLY AN ELECTRICAL CONT RACTOR AND GROSS CONTRACTUAL RECEIPTS CAME TO RS.1.10 CRORES. IN RESPECT OF THIS INCOME, ASSESSEE INCURRED AN EXPENSES OF RS.1.34 CRORES UNDER THE HEAD WAGES . THIS IN AOS OPINION WAS TOO MUCH. FURTHER, AO OBSERVED THAT IT IS APPAR ENT FROM THE LEDGER ACCOUNT OF THE CREDITORS THAT THEY ARE NOT MEN OF M EANS AND HENCE THEY CANNOT WAIT FOR SUCH A LONG TIME FOR PAYMENT. AO HA S OPINED THAT IN ORDER TO SUPPRESS REAL INCOME, ASSESSEE HAS INTRODUCED FAKE EXPENSES AND FAKE CREDITORS. AO PROCEEDED TO ESTIMATE THE INCOME FROM CONTRACT BUSINESS AS AT RS.30 LAKH. 5. UPON ASSESSEES APPEAL CIT(A) CONFIRMED THE AOS ORDER. AGAINST ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD LD. COUNSEL FOR THE ASSESSEE AND P ERUSED THE RECORDS. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AO HAS ESTIMATED GROSS PROFIT @ 21%. THIS HE SUBMITTED THAT IT IS VERY EXCESSIVE AN D THE SAME IS NOT SUSTAINABLE FROM ANY POINT OF VIEW. HE FURTHER SUBM ITTED THAT AO HAS MADE NO EFFORT TO FIND COMPARABLE RATES. HE FURTHER SUBMITT ED THAT PROFIT MAY BE ESTIMATED @ 6%. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION. UND ER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN OUR CONSIDERED OPI NION, ESTIMATE ON ACCOUNT OF PROFIT @ 8% OF THE CONTRACTUAL RECEIPT WILL SERV E THE ENDS OF JUSTICE. ITA NO.1646/KOL2011 A.Y.2008-09 M/S RAM SEVAK SHAW V. ACIT CIR-2 DGP PAGE 3 ACCORDINGLY, WE DIRECT THAT PROFIT @ 8% OF CONTRACT UAL RECEIPTS MAY BE ESTIMATED AND ADDITION ACCORDINGLY MADE. 8. APROPOS THE ISSUE OF ADDITION OF RS.2,09,250/-. 9. ON THIS ISSUE, AO MADE ADDITION AS INTEREST INCO ME UNDISCLOSED AMOUNTING TO RS.2,09,250/-. UPON ASSESSEES APPEAL, CIT(A) HAS CONFIRMED THE ADDITION. BEFORE US LD. COUNSEL FOR THE ASSESSE E HAS SUBMITTED THAT AO HAS HIMSELF OBSERVED THAT THERE IS NO INSTANCE OF F IXED DEPOSIT HENCE HE PLEADED THAT ADDITION ON ACCOUNT OF INTEREST CANNOT BE MADE. 10. UPON CAREFUL CONSIDERATION, WE FIND THAT WHEN T HE AO HAS HIMSELF MENTIONED THAT FIXED DEPOSITS ARE NON-EXISTENT, THE ADDITION FOR INTEREST THEREON CANNOT BE MADE. MOREOVER, WHEN THE INCOME H AS BEEN ESTIMATED AS A PERCENTAGE OF RECEIPT, ANY OTHER ADDITION IN THIS REGARD IS NOT SUSTAINABLE. UNDER THE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF CIT(A) AND DELETE THE ADDITION. 11. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AS THE ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 6/12/2013 SD/- SD/- (MAHAVIR SINGH) (SHAMIM YAHYA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 26/12/2013 , , , , -, -, -, -, / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. 1 / CONCERNED CIT 4. 1- / CIT (A) ITA NO.1646/KOL2011 A.Y.2008-09 M/S RAM SEVAK SHAW V. ACIT CIR-2 DGP PAGE 4 5. , , , / DR, ITAT, KOLKATA 6. 8 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,