BN Parida & Co, Bhubaneswar V. ACIT, Cuttack

ITA 185/CTK/2014

• Counselvise Citation: 18522114 RSA 2014
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURI
• Assessee Lawyers: G N NAYAK
• Keywords: Business income; Depreciation; Opportunity of being heard; Revised return
• Section: 144

Judgement Text

1 ITA NO.185/CTK/2014 ASSESSMENT YEAR :2009-2010 , , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK B ENCH, CUTTACK , . . , BEFORE SHRI SUNIL KUMAR YADAV, JM & SHRI B.P.JAIN, AM ./ ITA NO.185/CTK/2014 ( ! ! ! ! / ASSESSMENT YEAR :2009-2010) B.N.PARIDA & CO., A/12, SURYANAGAR, BHUBANESWAR. VS. ACIT, CIRCLE-2(1), CUTTACK ' ./ # ./ PAN/GIR NO. AAEFB 1952 A ( '$ / APPELLANT ) .. ( %&'$ / RESPONDENT ) ( * * * * /ASSESSEE BY : SHRI G.N.NAYAK * * * * /REVENUE BY : SHRI RABIN CHOUDHURI + ( / DATE OF HEARING : 27 TH MAY, 2015 -.! ( / DATE OF PRONOUNCEMENT 29 TH MAY,2015 / / / / / O R D E R PER B.P.JAIN(AM) THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F THE LD CIT(A), CUTTACK DATED 10.2.2014 FOR THE ASSESSMENT YEAR 2009-2010. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. FOR THAT THE ORDER DT.10.2.2014 AS PASSED BY TH E LD CIT(A), CUTTACK IS FAR FROM JUST AND LEGAL ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE. 2. FOR THAT THE LD CIT(A) ERRED IN DIRECTING THE LD AO TO DEDUCT SALARY, INTEREST PAID TO PARTNER AND DEPRECIATION FROM GROS S CONTRACT RECEIPT 2 ITA NO.185/CTK/2014 ASSESSMENT YEAR :2009-2010 INSTEAD OF DEDUCTION FROM ESTIMATED NET PROFIT OF 8 % ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 3. FOR THAT THE LD CIT(A) SHOULD NOT HAVE CONFIRMED THE ACTION OF THE AO TREATING THE ENTIRE SALES TAX REFUND OF RS.4,12,139 /- AS BUSINESS INCOME INSTEAD OF ESTIMATING NET PROFIT @ 8% THEREON ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 4. FOR THAT THE ORDER OF THE LD CIT(A) IS OTHERWISE BAD IN LAW AND LIABLE TO BE QUASHED. 3. GROUND NOS.1 & 4 ARE GENERAL IN NATURE AND DO NO T REQUIRE ANY ADJUDICATION. 4. AS REGARDS GROUND NO.2, THE RELEVANT FACTS OF TH E CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO REQUISITIONED THE CA SH BOOK AND RELEVANT VOUCHERS IN SUPPORT OF ENTRIES MADE IN THE LEDGER. THOUGH THE ASSESSEE WAS GIVEN ADEQUATE OPPORTUNITIES THE CASH BOOK AND SUPPORTING BILLS & VOUCHERS COULD NOT BE PRODUCED BY THE ASSESSEE BEFORE THE AO. IN THE ABSENCE OF SUCH , THE AO REJECTED THE BOOK RESULTS AND NOT BEING SATISFIED WITH THE CORRECTNESS AND C OMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE, RESORTED TO PROVISIONS OF SECTION 145(3) OF THE ACT AND ESTIMATED THE INCOME OF THE ASSESSEE @ 8% ON GROSS RECEIPTS FROM CIVIL C ONTRACT WORKS. THE AO COMPLETED THE ASSESSMENT U/S.144 OF THE ACT AND DID NOT GIVE ANY DEDUCTIONS TOWARDS INTEREST, SALARY, BONUS, COMMISSION OR REMUNERATION, ETC. 5. THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESS ING OFFICER. 3 ITA NO.185/CTK/2014 ASSESSMENT YEAR :2009-2010 6. THE LD COUNSEL FOR THE ASSESSEE ARGUED THAT THE SALARY AND INTEREST TO PARTNERS AND ALSO DEPRECIATION SHOULD BE ALLOWED AFTER THE E STIMATION OF NET PROFIT @ 8% OF THE GROSS RECEIPTS. 7. THE LD D.R. ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE SECTION 184(5) AN D SECTION 144 OF THE ACT HEREINBELOW: SECTION 184(5): 5) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, WHERE, IN RESPECT OF ANY ASSESSMENT YEAR, THERE IS ON TH E PART OF A FIRM ANY SUCH FAILURE AS IS MENTIONED IN SECTION 144, THE FIRM SHALL SO B E SO ASSESSED THAT NO DEDUCTION BY WAY OF ANY SUCH FIRM TO ANY PARTNER O F SUCH FIRM SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PRO FITS AND GAINS OF BUSINESS OR PROFESSION AND SUCH INTEREST, SALARY, BONUS, CO MMISSION OR REMUNERATION SHALL NOT BE CHARGEABLE TO INCOME TAX UNDER CLAUSE (V) OF SECTION 28. SECTION 144: 1 ] IF ANY PERSON- (A) FAILS TO MAKE THE RETURN REQUIRED 2 UNDER SUB- SECTION (1) OF SECTION 139] AND HAS NOT MADE A RETURN OR A REVISED RETURN UNDER SUB SECTION (4) OR SUB- SECTION (5) OF THAT SECTION,] OR (B) FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISS UED UNDER SUBSECTION (1) OF SECTION 142 3 OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER S UB- SECTION (2A) OF THAT SECTION], OR (C) HAVING MADE A RETURN, FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB- SECTION (2) OF SECTION 143, THE ( ASSESSING] OFFICER, AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH THE [ ASSESSING] OFFICER HAS GATHERED, SHALL, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, MAKE THE ASSESSMENT] OF THE TOTAL INCOME OR LOSS TO THE BEST OF HIS JUDGMENT AND DETERMINE THE SUM PAYA BLE BY THE ASSESSEE ] ON THE BASIS OF SUCH ASSESSMENT 4 ITA NO.185/CTK/2014 ASSESSMENT YEAR :2009-2010 9. IN THE PRESENT CASE, THE ASSESSEE FAILED TO PROD UCE VOUCHERS AND BOOKS OF ACCOUNT BEFORE THE AO AND ALSO BEFORE THE LD CIT (A ). ALSO, THERE IS NO GROUND FOR INVOKING THE PROVISIONS OF SECTION 145(3) OF THE AC T BY THE AO AND CONFIRMATION BY THE LD CIT(A) IN THIS REGARD BEFORE US. THEREFORE, THE AS SESSEE ACCEPTS THE INVOCATION OF PROVISIONS OF SECTION 145(3) OF THE ACT AND THE COM PLETION OF ASSESSMENT U/S.144. ALSO, THERE IS NO LEGAL GROUND TAKEN BEFORE US WITH REGAR D TO COMPLETION OF ASSESSMENT U/S.144 OF THE ACT. THEREFORE, THE ASSESSEE ADMITS THAT IT DOES NOT HAVE ANY GRIEVANCE OF MAKING ASSESSMENT U/S.144 OF THE ACT, WHICH HAS RIGHTLY BEEN CONFIRMED BY THE LD CIT(A). ONCE HAVING CONFIRMED THE ASSESSMENT U/S.1 44 OF THE ACT, THE PROVISIONS OF SECTION 184(5) OF THE ACT ARE CLEARLY APPLICABLE AS REPRODUCED HEREINABOVE. THEREFORE, THE ASSESSEE CANNOT BE ALLOWED THE PAYMENT OF INTEREST, SALARY, BONUS, COMMISSION OR REMUNERATION, BY WHATEVER NAME CALLED , WHEN THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE AS MENTIONED IN SECTION 144.. THERE I S NO DISPUTE TO THE FACT AS REGARDS THE FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND VOUCHERS AND NOTHING HAS BEEN SUBSTANTIATED BEFORE US, WHERE SAID BOOKS OF ACCOUNT HAD AT ALL BEEN MAINTAINED OR NOT, SINCE THE SAME HAVE NOT BEE N PRODUCED BEFORE US, EVEN AFTER THE ASSESSMENT HAD BEEN COMPLETED ON 17.10.2011. T HEREFORE, IT APPEARS THAT THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT AND VOU CHERS WITH REGARD TO ITS BUSINESS. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASS ESSEE CANNOT BE ALLOWED ANY SALARY AND INTEREST TO THE PARTNERS AND, THEREFORE, THE LD CIT(A) HAS RIGHTLY CONFIRMED THE ACTION OF THE AO TO DEDUCT SALARY AND INTEREST TO PARTNERS AND THE DEPRECIATION OUT OF THE GROSS CONTRACT RECEIPTS OF THE ASSESSEE AND ESTIMATED THE NET PROFIT @ 8% THEREAFTER, MEANING THEREBY THE ASSESSEE CANNOT BE ALLOWED THE SALARY A ND INTEREST TO PARTNERS AND 5 ITA NO.185/CTK/2014 ASSESSMENT YEAR :2009-2010 DEPRECIATION OUT OF THE NET PROFIT RATE CALCULATED @ 8%. WE FIND NO INFIRMITY IN THE ORDER OF THE LD CIT(A). GROUND NO.2 OF THE ASSESSEE IS D ISMISSED. 10. AS REGARDS GROUND NO.3, BRIEF FACTS OF THE CASE ARE THAT THE AO FOUND THAT THE ASSESSEE HAD RECEIVED SALES TAX REFUND OF RS.4,12,1 39/- WHICH HE ADDED TO THE ESTIMATED INCOME OF THE ASSESSEE SEPARATELY. THE L D CIT(A) CONFIRMED THE ACTION OF THE AO. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD CIT(A), WHO DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE THAT 8% OF THE SALES TAX REFUND SHOULD HAV E BEEN SHOWN AS BUSINESS INCOME. SINCE THE ASSESSEE MUST HAVE PAID SALES TAX IN EARL IER YEARS AND MUST HAVE CLAIMED DEDUCTIONS OF THE ENTIRE AMOUNT IN THE PROFIT AND L OSS ACCOUNT OUT OF WHICH, A PART IS REFUNDED DURING THE YEAR, WHICH IS CLEARLY THE INCO ME OF THE ASSESSEE AND, ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF THE LD CIT(A). 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 / 05/2015. SD/- SD/- ( ) (SUNIL KUMAR YADAV) ( . . ) (B.P.JAIN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 29 /05/2015 B.K.PARIDA, SR. PS 1 11 1 6 ITA NO.185/CTK/2014 ASSESSMENT YEAR :2009-2010 / / / / %( %( %( %( 3!( 3!( 3!( 3!( / COPY OF THE ORDER FORWARDED TO : / / / / / BY ORDER, SR. PRIVATE SECRETARY, , / ITAT, CUTTACK 1. '$ / THE APPELLANT : B.N.PARIDA & CO., A/12, SURYANAGAR, BHUBANESWAR. 2. %&'$ / THE RESPONDENT.: ACIT, CIRCLE-2(1), CUTTACK 3. 4 ( ) / THE CIT(A), BHUBANESWAR 4. 4 / CIT , BHUBANESWAR. 5. 5 %( , / DR, ITAT, CUTTACK 6. 7 8+ / GUARD FILE. &( %( //TRUE COPY//