Sushil Kumar Swain, Cuttack V. ACIT, Circle-2(2), Cuttack, Cuttack

ITA 184/CTK/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81471 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI S.V.MEHROTRA (AM) AND GEORGE MATHAN (JM) I.T.A. NO.184/CTK/2013 ASSESSMENT YEAR: 2009-2010 SUSIL KUMAR SWAIN, KALYANI NAGAR, CUTTACK PA NO.AGLPS 3388 J VS ADDL. CIT (TDS), CUTTACK APPELLANT RESPONDENT FOR THE APPELLANT: SHRI SUNIL MISHRA FOR THE RESPONDENT: SHRI S.C. MOHANTY DATE OF HEARING: 16/10/.2014 DATE OF PRONOUNCEMENT: 22 /10/2014 ORDER PER S.V.MEHROTRA, AM THE ASSESSEE HAS FILED THIS APPEAL AGAINST ORDER DA TED 26.11.2012 OF LD CIT(A), CUTTACK FOR THE ASSESSMENT YEAR 2009-2010. 2. BRIEFLY STATED THE FACTS ARE THAT, THE ASSESSEE , AN INDIVIDUAL WAS ENGAGED IN LABOUR SUPPLY FOR C IVIL CONSTRUCTION WORK ON CONTRACT HE HAD FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.35,18,960/-. THE A SSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE I NCOME TAX ACT, 1961, DETERMINING TOTAL INCOME AT RS .43,95,380/-, INTER ALIA, ESTIMATING THE NET PROFIT @ 5% ON GROSS RECEI PT OF RS.8,,75,07,513/-. ON APPEAL, LD CIT(A) CONF IRMED THE ACTION OF THE AO FOLLOWING THE DECISION OF ITAT CHANDIGARH IN TH E CASE OF DEV RAJ VS ITO (ITA NO.536/CH/2004, WHER EIN, THE TRIBUNAL UPHELD THE NET PROFIT @ 5% ON GROSS SUB-CONTRACT RE CEIPTS IN THE CASE OF CIVIL CONTRACTOR . BEING AG GRIEVED, ASSESSEE IS IN FURTHER APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. FOR THAT THE ORDERS OF THE FORUMS BELOW ARE ILL EGAL, ARBITRARY AND EXCESSIVE JURISDICTION OF AUTHORITY AND AS SUCH LIABLE TO BE QUASHED IN ITS ENTIRETY. 2. FOR THAT THE ESTIMATION OF THE NET PROFIT @ 5 % ON THE SUB-CONTRACT WORK IS EXCESSIVE, SINCE THE SAME RECEIPT HAS BEEN TAXED IN THE HAND OF THE MAIN CONTRACTOR WHICH DISCLOSED NET PROFIT @ MORE THAN 1 0% AND BY ESTIMATING @ 5 % AMOUNTS TO MORE THAN 15 % IN TOTO BY VIOLATING THE SETTLED LAW AND AS SUCH THE SAME MAY BE REDUCED TO 2 % AS DECIDED BY THIS FORUM IN OTHER SIMILAR CASES. 3. FOR THAT THE ORDERS OF THE FORUMS BELOW ARE ARBI TRARY, SINCE THE LEARNED AO, WHILE 2 ESTIMATING THE NET PROFIT HAS NOT ALLOWED DEPRECIAT ION WHICH IS AN ALLOWABLE EXPENSES AS PER THE SETTLED LAW AND AS SUCH THE LEA RNED AO HAS VIOLATED THE SETTLED POSITION OF LAW AND THE SAME MAY KINDLY BE ALLOWED FOR THE INTEREST OF JUSTICE. 4. FOR THAT, THE ORDER IS ALSO BAD IN LAW, SINCE TH E LEARNED AO HAS NOT GIVEN CREDIT OF THE TDS AMOUNTING TO RS.9,91,460/- BEING SUPPORTED WITH THE TDS CERTIFICATE, THEREBY VIOLATED THE PROVISION OF SECTION 205 OF TH E INCOME TAX ACT. HENCE, THE CREDIT OF ENTIRE TDS MAY KINDLY BE ALLOWED. 3. GROUND NO.1 IS GENERAL IN NATURE. 4. AT THE TIME OF HEARING, LD A.R OF THE ASSESSEE D ID NOT PRESSED GROUND NOS.3 & 4, THEREFORE, SAME AR E DISMISSED AS NOT PRESSED. 5. APROPOS GROUND NO.2, LD COUNSEL SUBMITTED THAT E STIMATION BY THE AO @ 5% IS ON HIGHER SIDE AND, THE REFORE, THE SAME MAY BE REDUCED. LD COUNSEL SUBMITTED THAT A SSESSEE IS A SUB-CONTRACTOR. HE PRODUCED A COPY OF DECISION OF ITAT CUTTACK IN THE CASE OF SANATAN PARIDA VS. DCIT (ITA NO.509/CTK/2011) ORDER DATED 17.2.2012, WHEREIN AL SO, THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 AND THE INCOME ON THE BASIS OF GROSS RECEIPTS WAS ON ACCOUN T SUB-CONTRACT WORK. THE TRIBUNAL DIRECTED THE AO TO ADOPT THE RA TE OF NET INCOME AT 4% ON THE GROSS RECEIPTS OF SUB -CONTRACT WORKS. THEREFORE, LD COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IN THE CASE OF THE ASSESSEE THE NET PROFIT MAY BE ADOPTED @4% AS AGAINST 5% ADOPTED BY THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF PARTIES A ND PERUSED THE RECORD OF THE CASE. WE HAVE ALSO PE RUSED THE ORDER OF THE TRIBUNAL IN THE CASE OF SANATAN PARIDA (SUPRA), WHEREIN, UNDER SIMILAR FACTS, THE TRIBUNA L HAS DIRECTED THE AO TO ADOPT 4% OF NET PROFIT ON GROSS RECEIPTS ON ACCOUN T OF SUB-CONTRACT WORKS. RESPECTFULLY FOLLOWING T HE SAME , WE DIRECT THE AO TO ADOPT 4% NET PROFIT AS AGAINST 5%. WE ORDER ACCORDINGLY. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2014. SD/- SD/- ( GEORGE MATHAN) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK 22 /10/2014 B.K.PARIDA, SR. PS 3 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: SUSIL KUMAR SWAIN,KALYANI NAGAR, CUTTACK 2. THE RESPONDENT: ADDL. CIT (TDS), CUTTACK. 3. THE CIT, CUTTACK 4. THE CIT(A), CUTTACK 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER ASST. REGISTRAR, ITAT, CUTTACK