The Dy. Commissioner of Income Tax, Patan Circle, Patan V. M/s. Ranjit Buildcon Ltd., Unjha

ITA 1831/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8297 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business income
• Section: 143(3); 154

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.1831/AHD/2016 / ASSTT. YEAR: 2011-2012 DCIT, PATAN CIRCLE PATAN. VS. M/S.RANJIT BUILDCON LTD. 110, OLD MARKET YARD UNJHA 384 170. PAN : AADCR 4658 R. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI MUDIT NAGPAL, SR.DR ASSESSEE BY : SHRI S.N. SOPARKAR, ! / DATE OF HEARING : 08/03/2018 '#$ ! / DATE OF PRONOUNCEMENT: 15 /05/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF LD.CIT(A), GANDHINAGAR, AHMEDABAD DATED 28.4.2016 P ASSED FOR THE ASSTT.YEAR 2011-12. 2. SOLE SUBSTANTIAL GRIEVANCE OF THE REVENUE IS THA T THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.37,3 0,085/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 30.9.2011 DECLARING TOTAL INCOM E AT RS.17,19,43,640/-. ASSESSMENT ORDER WAS PASSED ON 31.1.2014. DISSATISFIED WITH THE ASSESSMENT ORDER, ASSESSEE CA RRIED THE ITA NO.1831/AHD/2016 2 MATTER BEFORE THE LD.CIT(A) WHO HAS DECIDED THE APP EAL OF THE ASSESSEE VIDE ORDER DATED 17.5.2014. THE LD.AO HAS PASSED THE FOLLOWING ORDER WHILE GIVING EFFECT TO THE CIT(A)S ORDER: NAME OF THE ASSESSEE : RANJIT BUILDCON LTD. NATWARLAL ISHWARLAL BUILDING, 110, OLD MARKET YARD, UNJHA STATUS : COMPANY PAN : AADCR4658R ASSESSMENT YEAR : 2011-12 ORDER GIVING EFFECT TO THE CIT(A)'S ORDER IN VIEW OF THE CIT (A)'S ORDER NO. CIT (A)/GMR/502/ 2013-14 DATED 17.05.2014, THE REVISED TOTAL INCOME OF THE ASSESSEE IS AS UNDER: INCOME AS PER ASSESSMENT U/S 143(3) RS. 35,74,69 ,027/- DATED 3 1 .0 1 .20 1 4 (TOTALING MISTAKE IN THE ASSESSMENT ORDER IT WAS WRITTEN AS RS. 35,26,8 0,691 LESS: RELIEF ALLOWED IN APPEAL /. DEDUCTION U/S. 80IA (4) (I) RS. 8,92,78 ,982/- 2. ADDITION FOR SUB-LET GROSS PROFIT RS . 4,90,87,830/- 3. ADDITION MADE FOR INCOME FROM TRADING ACTIVITIES RS. 21,67,337/- 4. ADDITION FOR BANK INTEREST RS. 4,36,82 ,499/- 5. INCOME FROM OTHER SOURCES * RS. 13,08,739/- RS. 18.55.25.387/ RS.17,19,43,640/- ADD: PROFIT ON OWN BUSINESS ADMITTED BEFORE LD. CIT(A) RS. 19,92,88,246/- LESS: DECLARED IN COMPUTATION OF INCOME RS. 19,55, 58, 162/- ADDITION IN VIEW OF CIT(A)'ORDER RS. 37,30,085/- ============== (REVISED TOTAL INCOME) RS. 17,56,73,725/- *IN VIEW OF APPELLATE ORDER INCOME FROM BANK INTERE ST WHICH WAS TREATED AS 'BUSINESS INCOME' BY THE ASSESSEE, THE SAME WILL BE TREATED A S 'INCOME FROM OTHER SOURCES' SINCE IT IS ALREADY OFFERED FOR TAXATION UNDER THE HEAD 'BUSINESS INCOME' THEREFORE ONLY THE HEAD OF INCOME NEEDED TO BE CHANGE ACCORDINGLY, RELIEF IS ALSO GRANTED TO EXTEND IT IS TREATED AS INCOME FROM OTHER SOURCES) ISSUE DEMAND NOTICE AND CHALLAN AND REFUND ORDER AS THE CASE MAY BE, GIVE CREDIT FOR PRE-PAID TAXES IF ANY. 4. DISSATISFIED WITH THE ADDITION OF RS.37,30,085/- THE ASSESSEE FILED AN APPLICATION UNDER SECTION 154 OF THE INCOM E TAX ACT FOR RECTIFICATION. THIS APPLICATION OF THE ASSESSEE HA S BEEN REJECTED BY THE AO VIDE ORDER DATED 22.2.2016. AGGRIEVED WITH THE ORDER OF ITA NO.1831/AHD/2016 3 THE AO THE ASSESSEE FILED AN APPEAL, AND THE LD.CIT (A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY WAY OF IMPUGNED ORDER . 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD. THE CONTROVERSY IS THAT THE AS SESSEE HAS SHOWN NET PROFIT BEFORE THE TAX FOR ALL ACTIVITY AT RS.25,05,43,112/-. IT HAS PROFIT FROM THREE ACTIVI TIES VIZ. FROM SELF EXECUTED WORK, SUB-CONTRACTOR AND TRADING ACTI VITY. ACCORDING TO THE AO PROFIT FROM SELF-EXECUTED WORK WAS OF RS. 19,92,88,246/- WHEREAS THE ASSESSEE HAS SHOWN AT RS.19,55,58,162/- . THUS, ACCORDING TO THE AO THE ASSESSEE HAS SHOWN LESS PRO FIT AS COMPARED TO THE AVAILABLE PROFIT IN THE ACCOUNTS. THE LD.CIT(A) HAS OBSERVED THAT FIGURES WHICH WERE GIVEN BEFORE T AX AND AFTER TAX ARE CORRECT FIGURE. THERE WAS NO DIRECTION FOR ENHANCEMENT OR TAKING FIGURE OF RS.19,92,88,246/-. ACCORDING TO T HE LD.CIT(A), AO HAS EXCEEDED HIS JURISDICTION WHILE GIVING EFFECT T O THE ORDER OF THELD.CIT(A). THELD.CIT(A) VERIFIED THESE DETAILS AND DELETED ADDITION MADE BY THE AO. FINDING RECORDED BY THE L D.CIT(A) READS AS UNDER: 4.3 I HAVE CONSIDERED THE FACTS OF THE CASE, O RDER PASSED BY THE AO AND SUBMISSION MADE BY THE APPELLANT. APP ELLANT HAS SHOWN NET PROFIT AFTER TAX IN AUDITED ANNUAL AC COUNTS AT RS.19,55,58,165/- AND FILED RETURNED INCOME CONSIDE RING THIS FIGURE. THE APPELLANT HAS SHOWN NET PROFIT BEFORE T AX FOR ALL ACTIVITIES AT RS.25,05,43,112/-. DURING THE COURSE OF APPELLATE PROCEEDINGS AGAINST QUANTUM ASSESSMENT OR DER DATED 31/01/2014, FILED BREAKUP OF NET PROFIT BEFOR E TAXS IN THREE ACTIVITIES I.E. (I) PROFIT FROM SELF-EXECUTED WORK AT RS.L9,K902,88,246/- (II) SUB-CONTRACT WORK - RS.4,90,87,829/- AND (III) TRADING ACTIVITY AT RS.2 1,67,336/-. WHILE GIVING EFFECT TO APPELLATE ORDER DATED 17/05/ 2014, AO HAS COMPARED NET PROFIT FROM SELF EXECUTED WORK (BE FORE TAX) OF RS.19,92,88,246/- WITH NET PROFIT AFTER TAX (ASS UMING IT AS NET PROFIT FROM SELF-EXECUTED WORK) OF RS.19,55,58, 162/- AND MADE ADDITION OF RS.37,30,085/-. APPLICATION FILED BY THE ITA NO.1831/AHD/2016 4 APPELLANT WAS REJECTED ON THE GROUND THAT ENHANCEME NT IS MADE ON THE BASIS OF EVIDENCES AVAILABLE ON RECORD AND FURNISHED BY APPELLANT IN APPELLATE PROCEEDINGS. THE FACTS DISCUSSED HEREINABOVE CLEARLY SUGGEST THA T CIT(A) WHILE PASSING APPELLATE ORDER HAS NOT MADE ANY ENHANCEMENT OR NOR GIVEN ANY DIRECTION HENCE AO HAS NO POWER TO ENHANCE INCOME OF THE APPELLANT IN ORDER G IVING EFFECT TO APPELLATE ORDER. EVEN AO HAS COMPARED NET PROFIT BEFORE TAX FROM SELF-EXECUTED WORK WITH NET PROFIT AFTER TAX OF ALL THREE ACTIVITIES WHICH ITSELF SHOWS THAT COM PARISON MADE BY THE AO IS FACTUALLY INCORRECT AND NO ADDITI ON OF RS.37,30,085/- IS JUSTIFIED. THE AO IS HEREBY DIREC TED TO REDUCE THE TAXABLE 'INCOME BY RS.37,30,085. RELEVAN T GROUNDS OF APPEAL ARE ALLOWED. 5. IN THE RESULT, APPEAL IS ALLOWED. 6. AFTER GOING THROUGH THE ABOVE FINDING, WE ARE OF THE VIEW THAT THE AO HAS ERRED IN MAKING ADDITION OF RS.37,3 0,085/-. THE LD.CIT(A) HAS NOWHERE GIVEN ANY SUCH DIRECTION IN I TS ORDER DATED 17.5.2014 AND THE AO HAS NO POWER TO ENHANCE THE IN COME WHILE GIVING EFFECT TO THE ORDER OF THE LD.CIT(A). THERE FORE, THE LD.CIT(A) HAS RIGHTLY DELETED THE ADDITION. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD.CIT(A). THIS APPEAL O F THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 15 TH MAY, 2018. SD/- SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15/05/2018