Baby Engineering Electrical Mechanical Stores, Burdwan V. ITO, Ward - 2(1), Durgapur, Durgapur

ITA 1980/KOL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1886 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 143(3)

Judgement Text

ITA NO.1980/KOL/2017-BABY ENGG.ELECTRICAL MECHANICA L STORES A.Y.2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENC H : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM] I.T.A NO.1980/KOL/2017 ASSESSMENT YEAR : 2008-09 BABY ENGINEERING ELECTRICAL MECHANICAL .-VS.- I.T.O- WARD-2(1)., STORES,BURDWAN DURGAPUR. [PAN : AAFFB 3422 J] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI P.K.ROY, ADV OCATE FOR THE RESPONDENT : SHRI ROBIN CHOUDHUR Y, ADDL. CIT DATE OF HEARING : 13.12.2017. DATE OF PRONOUNCEMENT : 03.01.2018. ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 21.06.2017 OF CIT(A) - DURGAPUR RELATING TO A.Y.2008-09. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN MAKING ADDITI ON OF RS.4,07,889/- TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE ASSESSEE IS A PARTNERSHIP FIRM. IT CARRIES O N BUSINESS AS A CONTRACTOR. THE ASSESSEE EXECUTES SEVERAL WORK FOR DEFENCE AND AIR FORCE DEPARTMENT, GOVERNMENT OF INDIA. FOR A.Y.2008-09 THE ASSESSEE FILED RETURN OF INCOME ON 30.09.2008 DECLARING TOTAL INCOME OF RS.56,820/-. ASSESSMENT WAS COMPLET ED DETERMINING THE TOTAL INCOME OF THE ASSESSEE BY AN ORDER PASSED U/S 143(3) OF TH E INCOME TAX ACT, 1961 (ACT) OF RS.7,13,670/- AND ULTIMATELY THIS ASSESSMENT WAS SE T ASIDE BY THE HONBLE ITAT IN ITA NO.651/KOL/2012 BY ORDER DATED 31.10.2012 DIREC TING THE AO TO RE-DO THE ASSESSMENT AFTER AFFORDING THE ASSESSEE OPPORTUNITY TO SUBSTANTIATE ITS RETURN OF INCOME. ITA NO.1980/KOL/2017-BABY ENGG.ELECTRICAL MECHANICA L STORES A.Y.2008-09 2 4. AS WE HAVE ALREADY STATED THAT THE ASSESSEE FILE D RETURN OF INCOME ON 30.09.2008 DECLARING TOTAL INCOME OF RS.56,820/-, I N THE RETURN OF INCOME SO FILED THE GROSS CONTRACTUAL RECEIPTS DECLARED BY THE ASSESSEE WAS RS.61,15, 991/-. SUBSEQUENTLY THE ASSESSEE FILED A REVISED RETURN DECLARING GROSS CONTRACT RECEIPTS OF RS.65,23,880/-. THUS THERE WAS AN INCREASE IN THE GROSS CONTRACT RE CEIPTS BY RS.4,07,889/-COMPARED WITH THE ORIGINAL RETURN OF INCOME AND THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE. THE AO FOUND THAT BOTH THE ACCOUNTS HAVE BEEN AUDITED BY THE SAME CHARTERED ACCOUNTANT. ACCORDING TO THE AO THE ASSES SEE DID NOT EXPLAIN THE REASONS FOR DISCREPANCY IN THE GROSS CONTRACT RECEIPTS SO D ECLARED. THE AO DID NOT ACCEPT THE REVISED RETURN OF INCOME BUT NEVERTHELESS BROUGHT T O TAX A SUM OF RS.4,07,889/- WHICH WAS THE DIFFERENCE IN THE GROSS CONTRACT RECEIPTS F ILED IN THE ORIGINAL RETURN OF INCOME AND THE REVISED RETURN OF INCOME. 5. BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT TH E ASSESSEE REALIZED THE MISTAKE IN THE GROSS CONTRACT RECEIPT DECLARED ON COMPARISO N OF VARIOUS DOCUMENTS LIKE BILLS RAISED, GROSS BILL AMOUNT, TDS AND OTHER ADJUSTMENT S AFTER TAKING MEASUREMENTS OF WORK BY THE GOVERNMENT AUTHORITY. THIS WAS THE REAS ON WHY THE DISCREPANCY IN THE GROSS CONTRACT RECEIPT AS DECLARED BY THE ASSESSEE IN THE REVISED RETURN OF ICOME. THE ASSESSEE SUBMITTED THAT AT BEST IT IS ONLY 8% OF TH E SUM OF RS.4,07,889/- THAT COULD BE ADDED AS INCOME OF THE ASSESSEE AND NOT THE ENTIRE GROSS CONTRACT RECEIPTS OF RS.4,07,889/-. 6. THE CIT(A) HOWEVER REJECTED THE CONTENTIONS OF T HE ASSESSEE BY OBSERVING AS FOLLOWS :- AS THE A.O. HAS NOT CONSIDERED THE REVISED RETURN OF INCOME WHICH WAS FILED AFTER ISSUANCE OF NOTICE U/S 143(2) AND THE ADDITIO N OF RS. 4,07,889/- WAS MADE OVER THE RETURN INCOME OF THE ORIGINAL RETURN AND R EVISED RETURN OF INCOME SHOWN BY THE APPELLANT INCLUDING RS. 4,07,889/- WAS IGNOR ED BY THE A.O. DUE TO THE REASON THAT THE APPELLANT FILED ITS RETURN OF INCOM E ONLY AFTER ISSUANCE OF NOTICE U/S. 143(2) WHICH WAS ALMOST AFTER ONE YEAR FROM TH E FILING OF ORIGINAL RETURN. THE A.O. ALSO NOTICED THAT THE APPELLANT HAS SHOWN AUDI T DATE OF EVEN REVISED BALANCE SHEET ON SAME AS OF THE ORIGINAL AUDITED RETURN. TH E A.O HAD BONAFIDE REASONS TO BELIEVE THAT THE DATE OF REVISED AUDIT IS NOT SAME . HAD IT BEEN SO THE REVISED ITA NO.1980/KOL/2017-BABY ENGG.ELECTRICAL MECHANICA L STORES A.Y.2008-09 3 RETURN SHOULD ALSO HAVE BEEN FILED ON THE SAME DATE WHICH IS NOT DONE IN CASE OF THE APPELLANT. AS THE APPELLANT'S INCOME WAS REVISE D ONLY AFTER ISSUANCE OF NOTICE U/S. 143(2) THE REVISED INCOME SHOULD HAVE BEEN ACC EPTED WITHOUT ISSUANCE OF ANY SHOW CAUSE NOTICE AND COMPLETION OF ASSESSMENT. THE INCOME OF RS. 4,07,889/- IS ALREADY SHOWN IN THE RETURN OF INCOME , THEREFORE, IT DOES NOT MAKE ANY DIFFERENCE IN THE INCOME OF THE APPELLANT EVEN AFTER THE SAME IS ADDED IN THE ORIGINAL RETURN OF INCOME. THEREFORE, THE APPELLANT 'S GRIEVANCE IS INFRUCTUAS; HENCE, THE APPEAL FILED BY THE APPELLANT IS DISMISS ED.' 7. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HA S PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 8. I HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE CIT(A). THE LD. DR RELIED ON THE ORDER OF THE CIT(A). 9. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS F OUND FROM THE ORDER OF THE AO THAT IN THE REVISED RETURN OF INCOME FILED EXCEPT F OR A VARIATION IN THE GROSS CONTRACT RECEIPT ALL OTHER FIGURES REMAINED THE SAME INCLUD ING THE TOTAL INCOME DECLARED. IN SUCH CIRCUMSTANCES THE CONCLUSION OF CIT(A) THAT TH E ASSESSEE HAD DECLARED A SUM OF RS.4,07,889/- IN THE REVISED RETURN OF INCOME AND T HEREFORE THE ASSESSEE CANNOT HAVE ANY GRIEVANCE IS NOT CORRECT. EVEN ASSUMING THE WOR SE SCENARIO THAT THE INCOME DECLARED BY THE ASSESSEE IS WITHOUT CONSIDERING THE GROSS CONTRACT RECEIPT OF RS.4,07,889/- THE ADDITION THAT COULD BE MADE CAN O NLY BE 8% OF THE GROSS CONTRACT RECEIPTS OF RS.4,07,889/- WHICH IS A PRESUMPTIVE RA TE OF TAXATION FOR ASSESSEES CONTRACT BUSINESS. IN MY VIEW ADDING THE ENTIRE SUM OF RS.4,07,889/- WOULD BE GROSS INJUSTICE. THE ADDITION IS THEREFORE RESTRICTED TO 8% OF RS.4,07,889/-. THUS THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COUR T ON 03.01.2018. SD/- [ N.V.VASUDEVAN ] JUDICIAL MEMBER DATED : 03.01.2018. [RG SR.PS] ITA NO.1980/KOL/2017-BABY ENGG.ELECTRICAL MECHANICA L STORES A.Y.2008-09 4 COPY OF THE ORDER FORWARDED TO: 1. BABY ENGINEERING ELECTRICAL MECHANICAL STORES, P ANAGARH BAZAR, NEW KANSKA ROAD, BURDWAN, WEST BENGAL-713148. 2. I.T.O., WARD-2 (1), DURGAPUR. 3. C.I.T.(A- DURGAPUR. 4. C.I.T.-DURGAPUR. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE / D.D.O., ITAT KOLKATA BENCHES