Ambika Construction Company, Baripada V. DCIT, Balasore

ITA 191/CTK/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3815 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 22-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: D K SHETH
• Keywords: Business income; Depreciation
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ( CUTTACK BENCH, CUTTACK ) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH , JUDICIAL MEMBER I TA N O . 1 91 / CTK/2015 (ASSESSMENT YEAR : 20 1 1 - 1 2 ) M/S. AMBIKA CONSTRUCTION COMPANY, VS. DCIT, C/O MANGAL KUMAR BHAUMIK, BALASORE CIRCLE WARD NO.11, STATION BAZAR, BALASORE. BARIPADA 757 001. ( PAN : AAFFA2848B ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI D.K. SHETH , AR REVENUE BY : SHRI D.K. PRADHAN , DR D ATE OF HEARING : 2 7 . 0 4 .2017 DATE OF PRON OUNCEMENT : 29 . 0 5 .2017 O R D E R PER KULDIP SINGH , JUDICIAL MEMBER : THE APPELLANT, M/S. AMBIKA CONSTRUCTION COMPANY (HEREINAFTER REFERRED TO AS THE ASSESSEE ) BY FILING THE AFORESAID APPEAL SOUGHT TO SET ASIDE THE ORDER DATED 2 7 .0 2 .201 5 PASSED B Y THE COMMISSIONER OF INCOME - TAX (APPEALS) , CUTTACK QUA THE ASSESSMENT YEAR 20 1 1 - 1 2 ON THE GROUNDS INTER ALIA THAT : - 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ASSESSMENT AS MADE IS ARBITRARY AND UNJUSTIFIED. ITA NO . 1 91 / CTK ./2015 2 2. FOR THAT THE ORDE R OF ASSESSMENT AS MADE U/S.143(3) / 144 / 145(3) IS IMPROPER AND BAD - IN - LAW . 3. FOR THAT APPLICATION OF A RATE OF 6% ON GROSS RECEIPTS IS EXCESSIVE AND THE INCOME RETURNED BEING REASONABLE SHOULD HAVE BEEN ACCEPTED. 4. FOR THAT THE CLAIM OF DEPRECIAT ION SHOULD HAVE BEEN CONSIDERED SEPARATELY AFTER ESTIMATING THE NET PROFIT. 5. FOR THAT THE LEARNED COMMISSIONER FAILED TO APPRECIATE THE CONTENTIONS FURNISHED BY THE APPELLANT. 6. FOR THAT THE LEARNED COMMISSIONER IS NOT JUSTIFIED TO CONFIRM THE ASSES SMENT AND DISMISS THE APPEAL. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : THE ASSESSEE IS A CIVIL CONTRACTOR AND DURING SCRUTINY PROCEEDINGS, ASSESSEE WAS CALLED UPON TO FURNISH THE DETAILS OF SUNDRY CREDITORS AND VARIOUS EXPENSES DEBITED TO P&L ACCOUNT, CASH BOOK AND STOCK REGISTER, WHICH HE HAS FAILED TO PRODUCE AND CONSEQUENTLY , THE AO PROCEEDED UNDER SECTION 143(3)/ 144/145(3) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT) TO COMPLETE THE ASSESSMENT. 3. A O NOTICED THAT THE NET PROFIT DISCLOSED BY THE ASSESSEE @ 2.76% IS EXTREMELY LOW AND ESTIMATED THE SAME @ 6% OF THE TURNOVER AND ASSESSED THE INCOME AT RS.94,51,320/ - . ITA NO . 1 91 / CTK ./2015 3 4 . ASSESSEE CARRIED THE MATTER BY WAY OF FILING AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DISMISSED THE APPEAL . FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY FILING THE PRESENT APPEAL. 5 . WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LD. AR FOR THE ASSESSEE BY RELYING UPON THE DECISION RENDERED BY ITAT, CUTTACK IN CASE OF M/S. SANTOSH KUMAR KHANDELWAL VS. ACIT IN ITA NOS.70 & 71/CTK/2013 D ATED 22.02.2013 CONTENDED THAT THE AO HAS ESTIMATED THE NET PROFIT AT HIGHER RATE WHICH IS NOT FEASIBLE IN THE BUSINESS OF THE ASSESSEE. HOWEVER, KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEREIN THE ASSESSEE HAS SHOWN THE GROSS RECEIPT OF RS.1,32,41,345/ - AND THE FACT THAT HE HAS NOT PRODUCED EVEN A SINGLE DOCUMENT IN SUPPORT OF HIS CONTENTION AND EVEN IN THE DECISION RENDERED BY THE COORDINATE BENCH IN CASE OF M/S. SANTOSH KUMAR KHANDELWAL (SUPRA) , THE BUSINESS INCOME WAS ALLOWED TO BE EST IMATED AT 5%, T HE LD. CIT (A) IN THE IMPUGNED ORDER HAS THRASHED THE ISSUE THREADBARE AND HAS TAKEN NOTE OF THE FACT THAT IN MANY CASES, THE ITAT, CUTTACK HAS DIRECTED THE AO TO ESTIMATE THE ITA NO . 1 91 / CTK ./2015 4 NET PROFIT IN ABSENCE OF BOOKS OF ACCOUNT @ 8% OF THE GROSS TURN O VER NET DEPRECIATION, T HE GROSS PROFIT RATE ASSESSED @ 6% AFTER DEPRECIATION IS REASONABLE IN THE BUSINESS LINE OF THE ASSESSEE. SINCE, IN THE INSTANT CASE, THE AO ESTIMATED THE NET PROFIT @ 6% AFTER DEPRECIATION, WE FIND NO ILLEGALITY OR PERVERSITY IN TH E IMPUGNED ORDER PASSED BY THE LD. CIT (A), HENCE APPEAL FILED BY THE ASSESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF MAY , 201 7 . SD/ - SD/ - ( N.S. SAINI ) ( KULDIP SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF MAY , 201 7 TS COPY OF THE ORDER FORWARDED TO: 1.APPELLANT - M/S. AMBIKA CONSTRUCTION COMPANY, C/O MANGAL KUMAR BHAUMIK,WARD NO.11, STATION BAZAR, BARIPADA 757 001. 2.RESPONDENT - DCIT, BALASORE CIRC LE, BALASORE. 3.CIT , CUTTACK 4.CIT (A) , CUTTACK. 5.DR (ITAT), CUTTACK . 6. GUARD FILE //TRUE COPY// BY ORDER SR. PRIVATE SECRETARY , ITAT , CUTTACK