M/s. Dilip Kumar Das & Sons, Kolkata V. DCIT, Cir-I, Jalpaiguri, Jalpaiguri

ITA 1907/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5543 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 25-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts
• Section: 69C; 40A(3); 40(a)(ia)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NOS. 1907 & 1908/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2014-15 M/S. DILIP KUMAR DAS & SONS (PAN : AADFD 1492 L) VS. DCIT, CIR I, JALPAIGURI. APPELLANT RESPONDENT ORDER PER SHRI A.T.VARKEY, JM THESE ARE APPEALS FILED BY THE ASSESSEE COMPANY AGA INST THE ORDER OF THE CIT(A) JALPAIGURI, DATED 25.05.2017 FOR ASSESSMENT YEARS 2 011-12 AND 2014-15. 1A. AT THE OUTSET, WE FIND THAT THE APPEAL OF THE A SSESSEE IS TIME BARRED BY 20 DAYS AND A CONDONATION PETITION HAS BEEN FILED. AFTER HEARING BOTH THE SIDES, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 2. AT THE OUTSET ITSELF, WE NOTE THAT THE SOLE ISSU E RAISED BY THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A) IN REJECTING THE BOOKS OF ACCOUNTS AND ESTIMATING THE NET PROFIT OF THE ASSESSEE FOR BOTH THE YEARS AT 8%. 3. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A GOVERNMENT CONTRACTOR PERFORMING CIVIL JOBS VIZ. CONSTRUCTION OF ROADS, CULVERTS ETC . IN THE REMOTE AREAS OF NORTH BENGAL INCLUDING NATIONAL AND INTERNATIONAL BORDER AREAS. THE AO NOTED THAT FOR THE ASSESSMENT YEAR 2011-12, THE ASSESSEE FIRM HAS SHOWN NET PROFI T OF 5.48% FROM ITS CONTRACTUAL BUSINESS. THE AO NOTED THAT THERE WAS A SURVEY ON 3 1.07.2015 (I.E. AY 2016-17) CONDUCTED DATE OF HEARING 26.03.2019 DATE OF PRONOUNCEMENT 03.06.2019 FOR THE APPELLANT SHRI MIHIR BANDYOPADHYAY, AR FOR THE RESPONDENT SHRI ROBIN CHOUDHURY, ADDL. CIR, SR. DR ITA NOS. 1907 & 1908/KOL/2017 A.YS. 2011-12 & 2014-15 M/S. DILIP KUMAR DAS & SONS 2 IN THE ASSESSEES PREMISES AND AFTER ISSUING STATUT ORY NOTICES, THE ASSESSMENT WAS CARRIED OUT AGAINST THE ASSESSEE. THE AO NOTED THAT THERE WAS U NEXPLAINED EXPENDITURE SO, HE MADE ADDITION U/S 69C & ON THE BASIS OF VIOLATION OF SEC TION 40(A)(IA) AND SECTION 40A(3) FOR AY 2014-15 AN AMOUNT OF RS. 54,57,223/- & RS. 1,10,97, 600/- WAS DISALLOWED. SIMILARLY FOR AY 2011-12 DISALLOWANCE U/S 40A(3) RS. 52,62,039/- WAS MADE. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITIONS MADE U/S 69C, 40(A)(IA) & 40A (3) OF THE ACT AND THEREAFTER REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ESTIMATED INCOME[NP] AT 8% OF THE TURNOVER. AGGRIEVED THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE NOTE THAT ASSESSEE IS A CIVIL CONTRACTOR OF THE GOVERNMENT AND IS ENGAGED I N THE CONSTRUCTION OF ROADS AND OTHER CIVIL WORKS IN THE BORDER AREAS OF THE STATE/NATION AL & INTERNATIONAL BORDERS. IN THE ASSESSMENT YEAR 2011-12 & 2014-15, THE ASSESSEE HAD TIMELY FILED RETURN OF INCOME DISCLOSING AN INCOME OF RS. 1,57,40,468/- & RS. 1,7 7,85,850/- RESPECTIVELY FROM CONTRACTUAL BUSINESS OF NET PROFIT OF 5.48% AND 4.55% RESPECTIV ELY. THE AO AFTER SURVEY WAS CONDUCTED ON 31.07.2015 AFTER ISSUING 148 NOTICE HAS FRAMED, THE REASSESSMENT MAKING DISALLOWANCE AS NOTED ABOVE U/S 40(A)(IA) AND SECTION 40A(3) OF THE ACT AS WELL AS ADDITION U/S 69C OF THE ACT. ON APPEAL, THE LD. CIT(A) HAS DELETED THE ADDI TIONS MADE U/S 40(A)(IA), SEC. 40A(3) & SEC. 69C OF THE ACT AND THEREAFTER HAS REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ESTIMATED THE NET PROFIT AT 8%. THE MAIN PLEA OF TH E ASSESSEE IS THAT THE NET PROFIT OF 8% IS VERY HIGH AND RELIED ON CERTAIN DECISIONS OF THE TR IBUNAL WHEREIN LESSER NET PROFIT HAS BEEN ACCEPTED BY THE TRIBUNAL IN THE CASES OF CONTRACTOR S. WE NOTE THAT THE REVENUE HAS NOT CHALLENGED THE DECISION OF THE LD. CIT(A) AND ONLY THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ACTION OF THE LD. CIT(A). WE NOTE THAT THE ASSESSEE HAS NOT CHALLENGED ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNTS. THEREFOR E, THE ONLY ISSUE IS WHETHER THE ESTIMATION OF NET PROFIT BY THE LD. CIT(A) IS REASO NABLE OR NOT. WE NOTE THAT IN ORDER TO ARRIVE AT NET PROFIT OF 8% TO LD. CIT(A) HAS TAKEN INTO ACCOUNT, THE NET PROFIT PERCENTAGE OF ASSESSEE FROM A.Y. 2011-12 TO 2014-15. WE NOTE THAT FOR EASY UNDERSTANDING, WE REPRODUCE THE CHART OF NET PROFIT PERCENTAGE OF THE ASSESSEE FROM A.Y. 2011-12 TO 2014-15 WHICH IS AS UNDER: ITA NOS. 1907 & 1908/KOL/2017 A.YS. 2011-12 & 2014-15 M/S. DILIP KUMAR DAS & SONS 3 ASST. YEAR NET PROFIT AS PER ACCOUNTS OF THE APPELLANT ADJUSTMENTS AS PER TABLE-III ABOVE READ NET PROFIT DECLARED IN THE ACCOUNTS OF THE APPELLANT NET PROFIT PERCENTAGE A B C D(B+C) 2011-12 RS. 1,32,15,854* RS. 1,62,32,408 RS. 2,94,4 8,262 5.48% 2012-13 RS. 1,92,42,218** RS. 1,98,14,384 RS. 3,90, 56,602 6.04% 2013-14 RS. 1,69,87,042*** RS. 1,55,97,226 RS. 3,25 ,84,268 5.85% 2014-15 RS. 1,51,19,940**** RS. 1,74,73,941 RS. 3,2 5,93,881 4.55% 5. WE NOTE THAT THE LD. CIT(A) HAS GIVEN NOTICE TO THE ASSESSEE VIDE ORDER SHEET DATED 15.05.2017 WHEREIN HE CONVEYED HIS DESIRE TO REJECT THE BOOKS OF ACCOUNTS BASED ON THE DISCREPANCIES NOTED THEREIN AND HIS INTENTION TO ES TIMATE NET PROFIT AT 8%. PURSUANT TO WHICH, THE ASSESSEE PLEADED THAT THE ESTIMATE OF NET PROFI T SHOULD BE DETERMINED AT 5%. WE NOTE THAT THE LD. CIT(A) HAS ESTIMATED THE INCOME AT 8% INSTE AD OF 5.79% DECLARED BY THE ASSESSEE (EXCLUDING MATERIAL SUPPLIED BY THE GOVERNMENT) AND ALSO IT WAS MADE CLEAR BY THE LD. CIT(A) THAT ASSESSEE WILL GET DEDUCTION AT RS. 7,23 ,906/- AND RS. 53,543/- WHICH WERE ADDED BY THE AO THOUGH NOT CONTESTED BY THE ASSESSE E. WE NOTE THAT THE LD. CIT(A) HAS NOT TAKEN INTO CONSIDERATION ANY COMPARABLE CASES SIMIL AR TO THAT OF ASSESSEE TO DETERMINE NET PROFIT AT 8%. WE NOTE THAT FROM THE ASSESSEES OWN PERFORMANCE AND NET PROFIT DECLARED FROM A.Y. 2011-12 TO 2014-15, AN ESTIMATE OF 6.75% ON THE CONTRACTUAL TURNOVER OF THE ASSESSEE COULD BE JUST, FAIR AND REASONABLE AND WE ORDER ACCORDINGLY. LIKEWISE FOR A.Y. 2014-15, WE DIRECT THE ESTIMATION OF THE NET PROFIT AT 6.75% ON THE CONTRACTUAL TURNOVER OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.06.2019 SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3RD JUNE, 2019 BISWAJIT (SR.P.S.) ITA NOS. 1907 & 1908/KOL/2017 A.YS. 2011-12 & 2014-15 M/S. DILIP KUMAR DAS & SONS 4 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. DILIP KUMAR DAS & SONS., BELAKO BA, P.O. PRASANNANAGAR, DIST. - JALPAIGURI, PIN 735133 (W B) 2 RESPONDENT DCIT, CIR-I, JALPAIGURI. 3. THE CIT(A) 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR