Smt. Pushpa Sharma, Sonepat V. ITO, New Delhi

ITA 2055/DEL/2014

• Counselvise Citation: 205520114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 03-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHIRANJAN SENAPATI
• Section: 143(3); 133(6); 145

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 2055 /DEL/201 4 A.Y. : 20 0 9 - 1 0 SMT. PUSHPA SHARMA, VS. INCOME TAX OFFICER, PROP. SHARMA CONSTRUCTION WARD - 3 , HOUSE NO. 989, SECTOR - 14 SONEPAT SONEPAT (PAN : AHKPS5214M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SALIL AGGARWAL, ADV. DEPARTMENT BY : SH. SUDHIRANJAN SENAPATI, SR. DR DATE OF HEARING : 06 - 8 - 2015 DATE OF ORDER : 2 1 - 9 - 2015 PER H.S. SIDHU, JM O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ROHTAK DATED 10 . 2 .201 2 PERTAINING TO ASSESSMENT YEAR 2009 - 10 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - I) THAT THE LD. CIT(A) ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ORDER OF THE AO AND DISMISSING THE APPEAL. (II) THAT THE LD. CIT(A) ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ACTION OF THE AO OF REJECTING THE BOOKS OF ACCOU NT OF THE ASSESSEE. 2 (III) THAT THE LD. CIT(A) ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ESTIMATION OF NET PROFIT @8% OF RECEIPT. (IV) THAT THE ASSESSEE CRAVES LEAVE TO ADD ALTER AMEND ANY OF THE GROUND(S) BEFORE OR AT TIME OF HEARI NG. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN DECLARING AN INCOME OF RS. 2,95,197/ - ON 24.9.2009 AND PROCESSED U/S. 143(1) ON AST 18.3.2011. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY . AO ISSUED N OTICE U/S. 143(2) OF THE I. T. ACT WHICH WAS DULY SERVED UPON THE ASSESSEE ON 25.9.2010. IN RESPONSE THEREOF, THE ASSESSEE S COUNSEL ATTENDED THE PROCEEDINGS FROM TIME TO TIME FURNISHED THE REQUISITE DETAILS/ INFORMATION, WHICH WERE EXAMINED BY THE AO . THE ASSESSEE DERIVES INCOME FROM THE BUSINESS OF CIVIL CONTRACTOR WORK ON CONTRACT BASIS. THE ASSESEE WAS ASKED TO PRODUCE ALL BILL / VOUCHERS OF THE EXPENSES INCURRED . ASSESSEE PRODUCED ONLY VOUCHERS ISSUED BY THE ASSESSEE, NO BILLS RAISED BY THE OTHER PARTY HAVE BEEN SUBMITTED. FUR THER, LETTERS TO CALL FOR THE INFORMATION U/S. 133(6) WERE ISSUED TO THE PARTIES, TO WHOM HIRE CHARGES WERE PAID, AT THE ADDRESS PROVIDED BY THE ASSESSEE, HOWEVER, NO ONE RESPONDED AND LETTER RECEIVED BACK WITH THE COMMENTS OF THE POSTAL AUTHORITIES WRONG ADDRESS/ INCOMPLETE ADDRESS. THE AO IS OF THE VIEW THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ARE DEFECTIVE AND DOES NOT REFLECT THE TRUE AND CORRECT PICTURE OF THE BUSINESS. THEREFORE, SHOW CAUSE NOTICE WAS SERVED UPON THE ASSESSEE THAT WHY THE BOOKS OF ACCOUNT SHOULD NOT BE REJECTED U/S. 145 OF THE I.T. ACT AND NET PROFIT @8% OF GROSS RECEIPTS SHOULD NOT BE APPLIED BY RELYING ON THE JUDGMENT OF THE HON BLE HIGH COURT DELIVERED IN THE CASE OF PRABHAT KUMAR CONTRACTOR 3 SIRSA IN ITA NO. 293 OF 2008 . IN RESPONSE TO THE SHOW CAUSE NOTICE, ASSESSEE DID NOT TURN UP ON THE SAID DATE AND NO REPLY WAS SUBMITTED TO COUNTER THESE ISSUES. ACCORDINGLY, THE BOOKS OF ACCOUNT WERE REJECTED U/S. 145 OF THE I.T. ACT, 1961 AND ESTIMATE THE NET PROFIT @8% OF THE GROSS RECEIPT OF RS. 14,28,74,86 WHICH COMES TO RS. 11,43,000/ - RELYING UPON THE AFORESAID JUDGMENT AND RECOMPUTED THE INCOME VIDE ORDER DATED 23.12.2011 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961. 4. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 23 . 12 .201 1 , ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 10 . 2 .201 2 HAS DISMISSED THE APPEAL BY UPHOLDING THE ACTION OF THE ASSESSING OFFICER. 5. AGAINST THE AFORESAID ORDER THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. COUNSEL FOR THE ASSESSEE STATED THAT THE EFFECTIVE GROUND OF APPEAL IS AGAINST THE REJECTING AO REJECTED THE A/C BOOKS AND ESTIMATED BOOK PROFIT @ 8 % OF GROSS RECEIPTS. HE SUBMITTED THAT COMPLETE BOOKS OF ACCOUNTS ALONG WITH VOUCHERS WERE PRODUCED BE FORE THE AO. HE FURTHER SUBMITTED THAT NO DEFECT HAS BEEN POINTED OUT BY THE AO AND THE SAME CANNOT BE REJECTED ONLY ON THE BASIS OF SUSPICION AS HAS BEEN DONE BY THE AO IN THIS CASE. IN SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE ON THE JUDGMENT O F THE HON BLE PUNJAB AND HARYANA HIGH COURT IN ITA NO. 550 OF 2007 IN THE CASE OF CIT, KARNAL VS. OM OVERSEAS WHEREIN THE HON BLE HIGH COURT HAD DELETED THE ADDITION MADE BY REJECTING THE BOOK RESULTS OF THE ASSESSEE. DURING THE HEARING, LD. COUNSEL OF THE ASSESSEE FILED A CHART SHOWING 4 NET PROFIT RATE SHOWN DURING VARIOUS ASSESSMENT YEA R S AND TREATMENT ACCORDED BY DEPARTMENT. 6.1 IN VIEW OF ABOVE, HE SUBMITTED THAT THE AO AS WELL AS LD. CIT(A) HAS ARBITRARY ESTIMATED THE NET PROFIT @8% OF THE GROSS RECEIPT, WHICH MAY BE TREATED AT 2.15% AS DECLARED BY THE ASSESSEE HERSELF. 7. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS AVAILABLE WITH ME, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND THE CITATIONS RELIED UPON THE BY THE LD. COUNSEL OF THE ASSESSEE. I FIND CONSIDERABLE COGENCY IN THE ASSESSEE S SUBMISSION THAT REGARDING PAYMENT IN CASH AND NO BILLS HAVE BEEN RAISED BY THEM. THE WORK WAS DONE BY LABOUR C LASS PERSONS WHO HAVE NO BILL BOOK AND PAYMENT ARE TO BE MADE AT SPOT IN CASH. THE LABOUR CLASS PEOPLE DO NOT ACCEPT THE CHEQUES. PROBABLY, THEY MIGHT NOT HAVE BANK ACCOUNT. THE ASSESSEE HAD FILED THE COMPLETED LEDGER ACCOUNTS OF THE EXPENSES ALONG TH E PHOTOCOPIES OF THE VOUCHERS. THE AO HAS NOT POINTED OUT ANY DEFECT EXCEPT DOUBT. THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED ONLY ON THE SUSPICION. I ALSO FIND THAT LD. COUNSEL OF THE ASSESSEE RELIED UPON THE JUDGMENT OF THE HON BLE PUNJAB AND HARYANA HIGH COURT IN ITA NO. 550 OF 2007 IN THE CASE OF CIT, KARNAL VS. OM OVERSEAS WHEREIN THE COURT HAD DELETED THE ADDITION MADE BY REJECTING THE BOOK RESULTS OF 5 THE ASSESSEE ON SIMILAR FACTS. I HAVE ALSO SEEN THE CHART FILED BY THE ASSESSEE SHOWING THE NET PROFIT RATE SHOWN DURING VARIOUS ASSESSMENT YEARS AND TREATMENT ACCORDED BY THE DEPARTMENT. FOR THE SAKE OF CONVENIENCE, THE CHART IS REPRODUCED AS UNDER: - S.NO. ASSESSMENT YEAR NET PROFIT RATE (IN %)_ BOOKS OF ACCOUNTS ACCEPTED / REJECTED BY AO 1 2007 - 08 8% NA 2 2008 - 09 4.82% ACCEPTED 3 2009 - 10 2.15% REJECTED 4 2010 - 11 2.58% ACCEPTED 5 2011 - 12 4.13% ACCEPTED 8.1 FROM THE ABOVE, IT IS CRYSTAL CLEAR THAT THE DEPARTMENT HAS ACCEPTED THE NET PROFIT @4.82% IN THE YEAR AY 2008 - 09; @2.58% IN THE YEAR AY 2010 - 11 AND @4.13% IN THE YEAR 2011 - 12, BUT ONLY THE PRESENT ASSESSMENT YEAR I.E. 2009 - 10 THE SAME WAS REJECTED, WHICH IS WITHOUT ANY BASIS AND WITHOUT ANY CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS COMPARED TO OTHER ASSESSMENT YEARS AS CITED ABOVE. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS RESPECTFULLY FOLLOWING THE PRECEDENT AS AFORESAID, I DIRECT THE AO TO ADOPT NET PROFIT @ 2.15%, AS DECLARED BY THE ASSESSEE, ON THE GROSS RECEIPTS AND RE - COMPUTE THE INCOME OF THE ASSESS EE ACCORDINGLY. 6 1 0 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 1 / 9 /201 5 . S D / - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 2 1 / 9 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES