ITO, Sonepat V. M/s. Bajrang Construction Co., Sonepat

ITA 1783/DEL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7024 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 12-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 30-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 144; 2

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-I: NEW DELHI BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER ITA NO.:- 1783/DEL /2015 ASSESSMENT YEAR: 2011-12 ITO WARD-1, SONEPAT VS. BAJRANG CONSTRUCTION CO. H.NO. 41, SEC-15 SONEPAT PAN AAHFB1947L (APPEL LANT) (RESPONDENT) O R D E R THIS APPEAL HAS BEEN FILED BY REVENUE AGAINS T THE ORDER OF THE LD. CIT(A) DATED 22.1.2015. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO DELETION OF THE ADDITION MADE BY THE AO BY ESTIMATI NG THE NET PROFIT @ 8% OF THE GROSS RECEIPT. 2. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. I NOTED THAT IN THIS CASE THE AO HAS INVOKED THE PROVISION OF DEPARTMENT BY : SHRI DEEPAK GARG, SR. DR ASSESSEE BY : SHRI GAUTAM JAIN, FCA DATE OF HEARING 12 /07 /2016 DATE OF PRONOUNCEMENT 12 /07 /2016 ITA NO. 1783/DEL/2015 2 SECTION 145(3) AND ESTIMATED THE NET PROFIT @ 8% OF THE GROSS RECEIPT. THE ASSESEE WENT IN APPEAL BEFORE THE LD. CIT(A). L D. CIT(A) DID NOT GIVEN ANY FINDING ON THE REJECTION OF THE BOOKS OF ACCOUNTS WHETHER THE ACTION OF THE AO WAS VALID OR INVALID. ALTHOUGH TH E LD. AR VEHEMENTLY CONTENDED BEFORE ME THAT FROM THE OBSERVATION BEING MADE IN PARA 3 IT CAN BE CONCLUDED THAT THE LD. CIT(A) HAS NOT APPROV ED THE ACTION OF THE AO REJECTING THE BOOKS OF ACCOUNTS. IN MY OPINION T HE LD. CIT(A) HAS NOT GIVEN ANY FINDING DISAPPROVING THE ACTION OF TH E AO FOR REJECTION OF THE BOOKS OF ACCOUNTS . THE ASSESSEE HAS NOT FILED ANY CROSS OBJECTION OR APPEAL BEFORE ME AGAINST THE ACTION OF THE LD. C IT(A) NOR DISAPPROVING THE ACTION OF THE AO INVOKING THE PROV ISION OF SECTION 145(3). IN VIEW OF THIS FACT THE AO IN MY OPINION I S BOUND TO DETERMINE THE INCOME OF THE ASSESSEE IN THE MANNER SPECIFIED U/S 144 OF THE INCOME TAX ACT. SECTION 144 IN MY VIEW DOES NOT GIV E THE AO ABSOLUTE POWER TO ESTIMATE THE INCOME OF THE ASSESEE AT A FI GURE AT WHICH HE MAY DEEM FIT. THE INCOME OF THE ASSESSEE HAS TO BE ESTIMATED ON THE BASIS OF THE MATERIAL BEING COLLECTED BY THE AO. IN THIS CASE I NOTED THAT THE ASSESSEE HAS DERIVED THE NET PROFIT IN THE ASST T. YEAR 2008-09 @ .41% WHILE IN THE IMPUGNED ASSTT. YEAR @ .38%. THE ASSESSEES RESULTS IN THE EARLIER YEAR IN MY VIEW IS THE BEST COMPARAT IVE INSTANCE. I NOTED THAT THE LD. CIT(A) HAS DELETED THE WHOLE OF THE AD DITION MADE BY THE ITA NO. 1783/DEL/2015 3 AO. THE ACTION OF THE LD. CIT(A) IN MY OPINION IS NOT IN ACCORDANCE WITH THE LAW. ONCE THE BOOKS OF ACCOUNTS STAND REJEC TED U/S 145(3) THE INCOME OF THE ASSESEE IS BOUND TO BE ESTIMATED. IN VIEW OF THIS FACT I AM OF THE VIEW THAT IT WILL MEET THE END OF THE JUST ICE IF THE INCOME OF THE ASSESEE IS ESTIMATED BY APPLYING THE NET PROFIT @ .41%. I ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO ESTIMATE THE INCOME OF THE ASSESSEE @ .41%. 4. IN THE RESULT APPEAL FILED BY THE REVENUE I S PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/07/2016. SD/- (P.K. BANSAL) ACCOUNTANT MEMBER DATED: 12/07/2016 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI