ITO, BARMER V. M/s. Shri Ram Traders, BARMER

ITA 183/JODH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82893 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: SHAILENDRA BARADIA
• Keywords: Rejection of books of accounts; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER I.T.A. NO. 183 / JODH /201 4 ASSTT. YEAR - 20 0 9 - 1 0 ITO, WARD, V S M/S. SHRI RAM TRADERS, BARMER. BHAGT O KI GALI, KALYANPURA, BARMER. PAN NO.ABMFS9929F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHAILENDRA BARADIA, DEPARTMENT BY : SHRI N.A. JOSHI , D.R. DATE OF HEARING : 01 /0 8 /201 4 DATE OF PRONOUNCEMENT : 07 /0 8 /2014 O R D E R P E R HARI OM MARATHA, J.M. : THIS APPEAL OF THE REVENUE FOR A.Y. 2009 - 10, IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), JODHPUR, DATED 06/01/2014. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM CONSISTING OF 5 PARTNERS HA VING EQUAL SHARE, VIZ., 20% EACH. THIS FIRM IS ENGAGED IN THE BUSINESS OF CARRYING OUT WORK TAKEN ON CONTRACT. 2 THUS, THE ASSESSEE - FIRM IS A CIVIL CONTRACTOR. DURING THIS YEAR THE ASSESSEE HAS DISCLOSED G.P. RATE 2.03%. THESE RATES HAVE BEEN FOUND TO BE SLI GHTLY ON LOWER SIDE AS COMPARED TO THE EARLIER YEAR. THE FOLLOWING CHART EXPLAINS THE COMPARATIVE POSITION OF RECEIPTS, GROSS PROFITS, GROSS PROFIT RATIO, NET PROFIT AND NET PROFIT RATIO FOR A.YRS. 2007 - 08, 2008 - 09 AND 2009 - 10. THIS CHART IS AS UNDER: - A. Y. NET RECEIPT GROSS PROFIT G.P. RATE NET PROFIT N.P. RATE 2007 - 08 12045423.00 1234655.00 10.25% 303912.00 2.52% 2008 - 09 34798839.00 2505516.00 7.20% 1019531.00 2.93% 2009 - 10 29299402.00 2098357.00 7.16% 595899.00 2.03% 2.1 THE A.O. EXAMINED AND TE ST CHECKED THE BOOKS OF ACCOUNTS PRODUCED BEFORE HIM AND NOTED THE FOLLOWING FLAWS IN THEM : - 1. THE ASSESSEE HAS NOT MAINTAINED THE STOCK REGISTER FOR THE MATERIAL CONSUMED ON DAY - TO - DAY BASIS. 2. FURTHER, NO PROPER VOUCHERS ARE MAINTAINED FOR WORK EXPENSES NOR THE HEADS ARE MENTIONED ON WHICH THE EXPENSES WERE MADE. 3 3. IN RESPECT OF LABOUR, REPAIRING, LOADING, & UNLOADING, DIESEL, OIL, PARTS, CAMP, OFFICE EXPENSES, MATERIAL, TRAVELLING ETC, THESE EXPENSES ARE NOT PROPERLY VOUCHED. 4. THE ASSESSEE HAS NOT MAINTA INED THE DETAILED EXPENDITURE ACCOUNTS OF SITE WISE WORK AND THEIR PROFITABILITY. 5. ON GOING THROUGH THE WHOLE BOOKS OF ACCOUNTS, IT IS FURTHER FOUND THAT THE ASSESSEE AS SUCH HAS NOT EVER MAINTAINED SALARY REGISTER, PAYMENT REGISTER, VOUCHER REGISTER, ATT ENDANCE REGISTER. 6. THE ASSESSEE HAS PREPARED MOSTLY SELF PREPARED VOUCHERS WHICH ARE NOT AMENDABLE TO VERIFICATION ALONG WITH PREPARATION O F CONSOLIDATED BOOKS PREPARED FOR WHOLE OF THE CONTRACT WORKS WHICH ARE NOT AT ALL OPEN TO VERIFICATION AT ALL. HE NCE, HE HAS REJECTED THE BOOKS OF ACCOUNTS U/S 145(3) OF THE I.T. ACT, 1961 (THE ACT FOR SHORT) AND THEREAFTER HE HAS ADOPTED N.P. RATE OF 12.5% WITH REFERENCE TO G.P. RATE OF 12.50% DISCLOSED IN A.Y. 2008 - 09. IN DOING SO HE HAS MADE AN ADDITION OF RS. 3 6,62,425/ - . HE HAS SUBJECTED THE NET PROFIT RATE OF 12.50% TO INTEREST PAID TO CREDITORS, DEPRECIATION, PARTNERS INTEREST AND REMUNERATION. 4 2.2 AGGRIEVED, THE ASSESSEE FILED APPEAL AND LD. CIT(A) HAS GIVEN PART RELIEF BY ADOPTING N.P. RATE OF 7.75% SUBJ ECT TO DEPRECIATION, INTEREST TO PARTNERS AND REMUNERATION PAID TO PARTNERS. THE REVENUE IS NOW AGGRIEVED BUT THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE CHALLENGED ORDER. 2.3 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF ITS APPEAL : - THE ASSE SSEE HAS NOT MAINTAINING OF VARIOUS DOCUMENTS EG. STOCK REGISTER, WORKS REGISTER, MUSTER ROLL, WAGE REGISTER, ATTENDANCE REGISTER, SALARY REGISTER ETC. IT DIFFICULT TO MAKE DETERMINE THE CORRECT CLAIM OF EXPENDITURE WHICH MAKE IT DIFFICULT TO ARRIVE AT COR RECT PROFIT. 2.4 WE HAVE HEARD RIVAL SUBMISSIONS. IN FACT THE GROUND RAISED BY THE REVENUE DOES NOT MAKE OUT ANY SENSE. HOWEVER, WHATEVER WE COULD GATHER FROM THE SUBMISSIONS OF LD. SR. D.R. WHO TRIED HIS LEVEL BEST TO DE F END THIS APPEAL, THAT THE REVENU E IS AGGRIEVED AGAINST THE FINDING OF LD. CIT(A). 2.5 WE HAVE FOUND THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE REJECTED BY THE A.O. U/S 145(3). THE LD. CIT(A) HAS ALSO UPHELD THE REJECTION OF THE BOOKS OF ACCOUNT. HOWEVER, HE HAS FOLLOWED THE 5 TRIBUN AL ORDER RENDERED IN THIS VERY ASSESSEES CASE FOR A.Y. 2008 - 09 I.E., THE IMMEDIATE PAST ASSESSMENT YEAR AND HAS INCORPORATED RELEVANT PORTION OF THAT ORDER AND HAS TAKEN HIS VIEW. IN THE FACTS AND THE CIRCUMSTANCES OF THIS CASE WE DONT FIND ANY MERIT IN THE GROUND RAISED BEFORE US, AS WELL AS THIS APPEAL AND DISMISS THE SAME. 3. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRON OUNCED IN THE COURT ON 7 TH AUGUST, 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 7 TH AUGUST, 2014 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SR. PRIVATE SECRETARY ITAT, JODHPUR