Bharat Rai, Muzaffarpur V. ACIT, Circle-1, Muzaffarpur

ITA 207/PAT/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0022 (ITAT-PATNA)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 23-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYA BISWAS
• Assessee Lawyers: N K LAL
• Keywords: Depreciation
• Section: 234B; 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC BENCH, PATNA BEFORE SHRI CHANDRA MOHAN GARG, J UDICIAL MEMBER ./ ITA NO. 2 0 7 / PAT /201 8 ( / ASSESSMENT YEAR : 20 1 2 - 20 1 3 ) BHARAT RAI, PROP: M/S SANJEEV CONSTRUCTION, MEENAPUR, MUZAFFARPUR VS. ACIT, CIRCLE - 1, MUZAFFARPUR ./ PAN NO. : A IAPR 8158 A ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI N.K.LAL, CA /REVENUE BY : SHRI SUPRIYA BISWAS, JCIT - DR / DATE OF HEARING : 1 8 /0 9 /2019 / DATE OF PRONOUNCEMENT : 18 /0 9 /2019 / O R D E R THIS APPEAL IS FILED BY THE ASSESSEE ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , JAMSHEDPUR , DATED 1 0 .05.2018 FOR THE ASSESSMENT YEAR 201 2 - 201 3 . 2 . APART FROM THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, L D. AR, AT THE OUTSET, PLACED RELIANCE ON THE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF DCIT VS. M/S SALAUDDIN, RENDERED IN MISCELLANEOUS APPEAL NO.77 OF 2010, DATED 11.04.2012 AND SUBMITTED THAT ESTIMATION OF NET PROFIT MA Y KINDLY BE REDUCED TO 6% WHICH HAS BEEN FOUND JUSTIFIED AND PROPER IN A CASE OF CIVIL CONTRACT BY THE HONBLE PATNA HIGH COURT IN THE ABOVE CASE (SUPRA). F URTHER LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS ESTIMATED I NCOME FROM MACHINERY RENT @20% OF GROSS RECEIPT OF HIRE ITA NO . 20 7 / PAT /201 8 2 CHARGES FROM JCB WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAS DULY AUDITED BY THE QUALIFIED CHARTERED ACCOUNTANT, THEREFORE, ESTIMATION @15% MAY KINDLY BE ACCEPTED. WITH REGARD TO CHARGING OF INTEREST U/S.234B OF THE ACT, LD. AR SUBMITTED THAT THI S ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE ON THE DECISION OF HONBLE JHARKHAND HIGH COURT IN CASE OF AJAY PRAKASH VERMA IN ITA NO.38 OF 2010 REPORTED IN 2013(1) TMI 140, WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT INTEREST U/S.234B CAN BE LEVIED ONLY O N THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME. 3. ON THE OTHER HAND, L D. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW AND DID NOT CONTROVERT WITH R EGARD TO ACCEPTING NET PROFIT @6% AND CHARGING OF INTEREST U/S.234 OF THE ACT AS PER THE JUDGMENTS RELIED ON BY THE LD.AR OF THE ASSESSEE . LD. DR ALS O FAIRLY AGREED TO I NCOME FROM MACHINERY RENT @ 15 % OF GROSS RECEIPT OF HIRE CHARGES FROM JCB . 4. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES , I FIND IN THE INSTANT CASE THE ASSESSING OFFIC ER HAS ESTIMATED NET PROFIT @8% AFTER CONSIDERING ALL EXPENSES INCLUDING DEPRECIATION. THE CIT(A) CONFIRMED THE NET PROFIT @8% ESTIMATED BY THE ASSESSING OFFICER . HOWEVE R, AS PER PROPOSITION RENDERED BY THE HONBLE PATNA HIGH COURT IN THE CASE OF M/S SALAUDDIN, IN MISCELLANEOUS APPEAL NO.77 OF 2010, DATED 11.04.2012 , IT HAS BEEN HELD THAT IN A CASE OF CIVIL CONTRACTOR ESTIMATION OF NET PROFIT @6% OF THE TOTAL CONTRACTUAL RECEIPTS IS JUSTIFIED AND REASONABLE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, I DIRECT THE ASSESSING OFFICER ITA NO . 20 7 / PAT /201 8 3 TO ESTIMATE OF NET PROFIT OF THE ASSESSEE @6% OF THE TOTAL GROSS CONTRACT RECEIPTS AND ALLOW THE RELIEF ACCORDINGLY. 5. WITH REGARD TO ESTIMATED I NCOME FROM MACHINERY RENT @20% OF GROSS RECEIPT OF HIRE CHARGES FROM JCB , BOTH THE PARTIES HAVE AGREED THAT ESTIMATION OF INCOME FROM MACHINERY RENT @15 % ON THE TOTAL GROSS RECEIPT MAY BE ACCEPTED . T HEREFORE, WITH THE CONSENT OF PARTIES , I DIRECT THE ASSESSING OFFICER TO ESTIMATE INCOME FROM MACHINERY RENT @15 % ON THE TOTAL GROSS RECEIPT OF HIRE CHARGES FROM JCB INSTEAD OF 20%. I ORDER ACCORDINGLY. 6. WITH REGARD TO CHARGING OF INTEREST U/S.234 B OF THE ACT, THE ISSUE IS COVERED BY THE DECISION OF HO N 'BLE JHARKAHND HIGH COURT IN THE CASE OF AJAY PRAKASH VERMA IN ITA NO.38 OF 2010 REPORTED IN 2013(1) TMI 140 , WHEREIN THE HON BLE HIGH COURT HAS HELD THAT THE REVENUE CAN LEVY THE INTEREST ONLY ON THE TOTAL INCOME DECLARED IN THE RETURNS AND NOT ON THE INCOME ASSESSED AND DETERMINED BY THE AO TO THAT EXTENT. R ESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE JHARKHAND HIGH COURT , I DIRECT THE AO TO RECOMPUTE THE INTEREST U/S. 234B OF THE ACT ON THE BASI S OF TOTAL INCOME DECLARED BY THE ASSESSEE IN THE RETURN FILED. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . O RDER PRONOUNCED IN THE OPEN COURT ON 18 /0 9 /201 9 . SD/ - ( C.M.GARG ) / JUDICIAL MEMBER /PATNA ; DATED 18 / 0 9 /201 9 PRAKASH KUMAR MISHRA , S R.P.S. (ON TOUR) ITA NO . 20 7 / PAT /201 8 4 / COPY OF THE ORDER FORWAR DED TO : / BY ORDER, ( SENIOR PRIVATE S ECRETARY ) , / ITAT, PATNA 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, PATNA 6. / GUARD FILE. //TRUE C OPY//