Keshav Kr. Narsaria, Ranchi V. DCIT,

ITA 167/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0333 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAON
• Assessee Lawyers: R K GARODIA
• Keywords: Source of fund

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL: CIRCUIT BENCH : RANCHI [BEFORE HONBLE S/SHRI N. S. SAINI, AM AND GEORGE M ATHAN, JM] ITA NO. 167/RAN/2014 ASSESSMENT YEAR: 2007-08 KESHAV KUMAR NARSARIA, C/O. M/S. R. K. GARODIA & CO., CHARTERED ACCOUNTANTS, 202, SAI APARTMENTS, (BEHIND ORIENTAL BANK OF COMMERCE), KUTCHERY ROAD,RANCHI 834 001 PAN:ACAPN8881A VS THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, INCOME TAX BUILDING, MAIN ROAD, RANCHI (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. K. GARODIA, AD VOCATE RESPONDENT BY SHRI CHOUDHARY ORAON, DR DATE OF HEARING: 27-10-2015 DATE OF PRONOUNCEMENT: 27-10-2015 O R D E R PER GEORGE MATHAN, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A), RANCHI (JHARKHAND) IN APPEAL NO.123 /AN/OTH/09-10 DATED 26-02-2014 FOR THE ASSESSMENT YEAR 2007-08. 2. SHRI R. K. GARODIA, ADVOCATE REPRESENTED ON BEHA LF OF THE ASSESSEE AND SHRI CHOUDHARY ORAON, LEARNED DR REPRE SENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AR THAT THE ASSE SSEE IS AN INDIVIDUAL WHO IS DERIVING INCOME FROM CIVIL CONSTR UCTION. IT WAS A SUBMISSION THAT IN THE COURSE OF ASSESSMENT THE AO HAD REJECTED THE ASSESSEES BOOKS OF ACCOUNT AND HAD ESTIMATED THE I NCOME OF THE ITA NO.167/RAN/2014 (AY: 2007-08) 2 ASSESSEE AT 7.25% OF THE TOTAL CONTRACT RECEIPTS OF RS.8,62,75,290/- . IT WAS A SUBMISSION THAT THE ASSESSEE HAD DISCLOSED A NET PROFIT RATE OF 6.95% FOR THE RELEVANT ASSESSMENT YEAR. IT WAS A SU BMISSION THAT THE AO HAD ESTIMATED THE NET PROFIT OF THE ASSESSEE AT 7.25% BY TAKING INTO CONSIDERATION THE NET PROFIT FOR THE IMMEDIATE LY PRECEDING YEAR WHEN THE NET PROFIT RATE WAS 7.63%. IT WAS A SUBMIS SION THAT THE LEARNED CIT(A) ON APPEAL HAD REDUCED THE NET PROFIT TO 7.07%. IT WAS ALSO A SUBMISSION THAT THE NET PROFIT RATE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR WHICH HAD BEEN TAKEN AT 7 .63% WAS ON ACCOUNT OF THE INCOME UNDER THE HEAD CAPITAL GAINS AND INTEREST INCOME. IT WAS A SUBMISSION THAT DURING THE RELEVA NT ASSESSMENT YEAR THE SAID TWO SOURCES OF INCOME WERE NOT AVAILABLE. IT WAS A SUBMISSION THAT THE NET PROFIT RATE WAS LIABLE TO BE REDUCED A ND THE RETURNED INCOME ACCEPTED. 4. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDERS OF THE AO AND THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ORDER OF THE LEARNED CIT(A) AS ALSO THE AO SHOWS THAT THE TURNOVER FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR WAS ONLY RS.5 0,22,307/-; WHEREAS THE TURNOVER FOR THE RELEVANT ASSESSMENT YE AR IS RS.8,62,75,290/-. EVEN, ADMITTING THAT THE ASSESSEE HAD INCOME FROM OTHER SOURCES REPRESENTING INTEREST INCOME AND IN COME FROM CAPITAL GAINS FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEA R WHEREBY THE NET PROFIT RATE WAS 7.63%, STILL IT HAS TO BE RECOGNIZE D THAT WHEN THE TURNOVER GOES UP, THE FIXED COST SUBSTANTIALLY REMA IN THE SAME AND CONSEQUENTLY, THE NET PROFIT NORMALLY GOES UP. THIS HAS NOT BEEN CONSIDERED BY THE ASSESSEE OR THE LEARNED CIT(A). E VEN OTHERWISE, WHEN THE ASSESSEE WAS SPECIFICALLY ASKED FOR THE NE T PROFIT RATE FOR ITA NO.167/RAN/2014 (AY: 2007-08) 3 EARLIER FEW YEARS AND THE SUBSEQUENT YEAR, IT WAS S UBMITTED BY THE ASSESSEE THAT THE DATA WAS NOT IMMEDIATELY AVAILABL E. THE ASSESSEE, IN ANY CASE, HAS NOT BEEN ABLE TO POINT OUT ANY ERROR IN THE ASSESSMENT OF THE NET PROFIT RATE AT 7.07% AS ADOPTED BY THE L EARNED CIT(A) WHICH, IN ANY CASE HAS RESULTED IN ADDITION OF ONLY RS.1,02,316/-. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THERE IS NO ERROR IN THE ORDER OF THE LEARNED CIT(A) WHICH CALLS FOR ANY INT ERFERENCE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CLOSE OF HEARING ON 27-10-2015. (N.S. SAINI) ACCOUNTANT MEMBER (GEORGE MATHAN) JUDICIAL MEMBER DATE : 27.10.15 LK DEKA/SR.PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) - 5. THE DR, ITAT, RANCHI 6. GUARD FILE BY ORDER ITA NO.167/RAN/2014 (AY: 2007-08) 4 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 27.10.15 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 27.10.15 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 27.10.15 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 27.10. 15 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27.10.15 S R.PS 6. DATE OF PRONOUNCEMENT 27.10.15 SR.PS 7. FILE SENT TO THE BENCH CLERK 27.10.15 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER