Income tax Officer ,Ward 8(1), Nagpur V. Shri Dilip Ladharam Madhwani, Nagpur

ITA 198/NAG/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3199 (ITAT-NAGPUR)
• Duration Of Justice: 6 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G L BAJAJ
• Section: 144

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 198 / N AG / 20 1 2 ( ASSESSMENT YEAR : 200 6 - 0 7 ) ITO, WARD - 8(1), NAGPUR - 440 006. VS. SHRI DILIP LADHARAM MADHWANI, 56, MUKUND SO C IETY, JARIPATAKA, NAGPUR - 440 014. PAN/GIR NO. : A A UPM 9089 P ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR. PRAKASH MANE /ASSESSEE BY : MR. G.L.BAJAJ DATE OF HEARING : 1 ST FEB ., 201 3 DATE OF PRONOUNCEMENT : 20 TH MARCH ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH IS APPEAL HA S BEEN PREFERRED BY THE DEPARTMENT BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) - I I , NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YEAR 200 6 - 0 7 , WHIC H HA S BEEN HEARD THROUGH E - COURT, MUMBAI . 2 . THE DEPARTMENT IS OBJECTING IN DELETING THE ADDITION OF RS .12,56,666/ - AND IN HOLDING THAT ESTIMATE OF 10% OF CONTRACT RECEIPT AS INCOME OF THE ASSESSEE FROM CONTRACT RECEIPT WILL MEET THE END OF JUSTICE. ITA NO . 198 /20 1 2 2 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND DERIVES INCOME FROM THE BUSINESS OF CIVIL CONSTRUCTION CONTRACTS FOR SEVERAL AUTHORITIES AND ORGANIZATIONS MAINLY NAGPUR MUNICIPAL CORPORATION, NAGPUR. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING INCOME OF RS.3,30,750/ - . NOTICE UNDER SECTION 143(2) WAS ISSUED, HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE. THE AO COMPLETED THE ASSESSMENT UNDER SECTION 144 BY DISALLOWING VARIOUS EXPENSES CLAIMED I N PROFIT AND LOSS ACCOUNT. TOTAL INCOME OF THE ASSESSEE WAS COMPUTED AT RS. 22,50,150/ - . 4 . THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND AFTER CONSIDERING THE SUBMISSION THE LEARNED CIT(A) FOUND THAT THE AO HAS NOT PASSED A REASONABLE ORDER AS HE D ISALLOWED VARIOUS EXPENSES ARBITRARILY. HE FURTHER NOTED THAT THE ASSESSEE IS A CONTRACTOR AND IF 8% OF NET PROFIT RA TE IS APPLIED ON CONTRACTORSHIP, THAT WILL MEET THE END OF JUSTICE. ACCORDINGLY, THE AO WAS DIRECTED TO RECOMPUTED THE INCOME OF THE ASSESS EE. AGAINST THE ORDER OF CIT(A), NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5 . LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. IT WAS FURTHER SUBMITTED THAT THERE WAS A LOAN OF RS. 12,56,666/ - , WHICH WAS DISALLOWED BY THE AO AND NO REASON HA S BEEN GIVEN BY THE CIT(A) IN DELETING THIS ADDITION. ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A) . ITA NO . 198 /20 1 2 3 6 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FIND NO INFIRMITY IN THE FINDING O F THE LEARNED CIT(A), WHO DIRECTED TO APPLY 8% NET PROFIT ON GROSS RECEIPT. THE ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 144, THEREFORE, THERE WAS NO REASON TO FILE ANY DETAIL BEFORE THE AO. ALL DETAILS WERE FILED BEFORE THE CIT(A) . REASON FOR N OT APPEARING BEFORE THE AO WAS ALSO EXPLAINED. AFTER CONSIDERING THE DETAILS AND TAKING INTO CONSIDERATION THAT THE ASSESSEE IS A CIVIL CONTRACTOR, LEARNED CIT(A) DIRECTED THE AO TO APPLY NET PROFIT RATE OF 8%. A SUBSTANTIAL ADDITION HAS ALREADY BEEN SUSTA INED BY APPLYING NP RATE. IT IS ALSO A SETTLED POSITION THAT WHERE THE NET PROFIT RATE IS APPLIED, NO OTHER ADDITION CAN BE MADE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES , WE ARE OF THE VIEW THAT THE CIT(A) WAS REASONABLE IN APPLYING NP RATE OF 8% AND THER EAFTER DELETING ALL OTHER ADDITIONS MADE BY THE AO. ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT(A) . 7 . IN THE RESULT , APPEAL OF THE DEPAR T MENT IS DISMISSED . ORDER PRONOUNCED IN THE E - COURT ON THIS 2 0 TH D AY OF M AR , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 2 0 / 0 3 / 201 3 . /PKM , PS ITA NO . 198 /20 1 2 4 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI