Shri Parshottamdas N.Deladia, Surat V. The ACIT.,Circle3, Surat

ITA 1881/AHD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9774 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHUBNESH KULSHRESTHA
• Assessee Lawyers: M K PATEL

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M SHRI PARSHOTTAM N. DELADIA, U-71, SANDHYA DARSHAN APPT., ADAJAN ROAD, SURAT. VS. ASSTT. CIT, CIRCLE-3, SURAT. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M. K. PATEL, AR RESPONDENT BY:- SHRI BHUBNESH KULSHRESTHA, DR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUND :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD. COMMISSIONER OF THE INCOME- TAX (APPEALS) HAS ERRED CONFIRMING THE ACTION OF THE AS SESSING OFFICER IN MAKING ADDITION OF RS.13,12,648/- ON ACC OUNT OF 10% DISALLOWANCE OUT OF LABOUR EXPENSES. 2. THE ASSESSEE IS AN ELECTRICAL CONTRACTOR. GROSS RECEIPT SHOWN BY THE ASSESSEE DURING THE YEAR IS RS.6,13,73,213/- ON WHI CH GP RATE OF 13.26% HAS BEEN DECLARED . HE CLAIMED LABOUR EXPENSES OF RS.1,55,50,138/-. THE AO FOUND THAT CLAIM OF LABOUR EXPENSES ARE NOT VER IFIABLE. AFTER MAKING CERTAIN ADJUSTMENTS HE WORKED OUT LABOUR EXPENSES A T RS.1,32,26,483/- AND DISALLOWED 10% THEREOF RESULTING IN AN ADDITION OF RS.13,12,648/-. 3. THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSES SEE HOLDING THAT ASSESSEE WAS NOT ABLE TO VERIFY THE CLAIM OF LABOUR EXPENSES. IT PRODUCED ITA NO.1881/AHD/2010 ASST. YEAR :2007-08 ITA NO.1881/AHD/2010 ASST. YEAR 2007-08 2 VOUCHERS WORTH RS.15,68,000/- ONLY OUT OF RS.1,31,2 6,483/-. ACCORDING TO HIM THE FINDING OF THE AO THAT VOUCHERS WERE BOGUS AND WERE SUBSEQUENTLY PREPARED AND ALSO NOT MADE BY THE ASSE SSEE WAS NOT CHALLENGED. EVEN THE SELF MADE VOUCHERS WERE INCOMP LETE AND REPRESENTED ONLY SMALL PART OF TOTAL EXPENDITURE. H E ACCORDINGLY UPHELD THE DISALLOWANCE @ 10% RESULTING IN AN ADDITION OF RS.13,12,648/-. 4. BEFORE US, THE LD. AR SUBMITTED THAT DISALLOWANC E IS EXCESSIVE. HE SUBMITTED THE FOLLOWING CHART OF GP RATE FOR 3 YEAR S. THERE WAS, HOWEVER, NO DISPUTE ON THE APPLICABILITY OF PROVISIONS OF SE CTION 145(3). HE SUBMITTED THAT SUITABLE RELIEF SHOULD BE GIVEN AS P ROFIT MARGIN GIVEN BY THE ASSESSEE IS QUITE HIGH. PARTICULARS ASST. YEAR 2007-08 ASST. YEAR 2006-07 ASST. YEAR 2005-06 TURNOVER 61373213 22607934 17984945 GROSS PROFIT AMT. 8139825 3801466 4026840 LABOUR EXP. 15550138 4575139 4019314 GROSS PROFIT RATIO 13.26% 16.81% 22.39% LABOUR EXP/TURNOVER 25.33% 20.24% 22.35% 5. THE LD. DR ON THE OTHER HAND, SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT ASSESSEE HAS NOT GIVEN ANY REA SON FOR NOT SUBMITTING BEFORE US ANY GP CHART SHOWING GP RATE FOR ASST. YE AR 2005-06 TO 2007- 08. IN ASST. YEAR 2005-06 GP RATE IS 22.39% WHEREAS IT IS SHOWN AT RS.13.26% THIS YEAR. CONSIDERING THE TOTALITY OF FA CTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT TO APPLY GP RATE OF 15%. THE AO WILL CALCULATE THE ITA NO.1881/AHD/2010 ASST. YEAR 2007-08 3 RESULTANT ADDITION AND ALLOW RELIEF TO THE ASSESSEE . THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 17/9/10. SD/- SD/- (BHAVNESH SAINI) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBE R AHMEDABAD, DATED : 17/9/10 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 27/8/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..