Bridge & Building Construction Co. Pvt. Ltd., Kolkata V. ITO, Ward - 10(1), , Kolkata

ITA 2115/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6222 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-02-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 08-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IMOKABA JAMIR; RANU BISW
• Assessee Lawyers: K M RAI
• Keywords: Search and seizure; Tax effect
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA BEFORE: SHRI P.M. JAGTAP, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 2115/KOL/2018 (ASSESSMENT YEAR: 2010-11) BRIDGE & BUILDING CONSTRUCTION CO. PVT. LTD. APPELLANT [PAN: AADCB 0689 E] VS ITO, WARD 10(1), KOLKATA RESPONDENT FOR THE ASSESSEE : MR. K.M. RAI, FCA FOR THE REVENUE : MR. IMOKABA JAMIR, CIT DR & SMT. RANU BISWAJ, ADDL. CIT DATE OF HEARING : 06.02.2020 DATE OF PRONOUNCEMENT : 12.02.2020 ORDER PER S.S. VISWANETHRA RAVI, JM THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 09.08.2018 PASSED BY THE LD. CIT(A) 20, KOLKATA FOR A.Y. 2010-11. 2. THE ASSESSEE HAS RAISED AS MANY AS THREE GROUNDS AMONGST WHICH THE ONLY ISSUE EMANATES WHETHER THE CIT(A) IS JUSTIFIED ADOPTING THE PROFIT RATE AT 8% OF RS. 68,96,532/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS RELATING TO THE ISSUE ON HAND ARE THAT THE ASSESSEE IS A COMPANY AND IN THE BUSINESS OF CIVIL CONSTRUCTION. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON THE PAHARPUR GROUP OF CASES AS WELL AS IN THE PREMISES OF ASSESSEE ON 23.02.2010. DURING THE COURSE OF SEARCH OPERATION, A HAND WRITTEN DIARY MARKED AS BBC/2 WAS SEIZED FROM THE PREMISES OF ASSESSEE. THE AO FOUND 7 ENTRIES OF INCOME IN THE SAID DIARY WHICH ARE DETAILED THEREIN IN PAGE NO. 2 OF ASSESSMENT ORDER AND ASKED THE ASSESSEE TO EXPLAIN SAID ENTRIES. ACCORDING TO AO, THE ASSESSEE FAILED TO OFFER ANY EXPLANATION IN THAT REGARD AND THE ENTIRE SUM OF RS. 68,96,532/- CONTAINED IN THE DIARY MARKED AS BBC/C WAS ADDED AS 2 I.T.A NO.2115/KOL/2018 BRIDGE & BUILDING CONSTRUCTION CO. PVT. LTD. UNDISCLOSED INCOME OF THE ASSESSEE AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS. 1,21,90,662/- VIDE HIS ORDER DATED 28.12.2011 PASSED U/S 144 OF THE ACT. 4. ACCORDING TO THE CIT(A), VIDE STATEMENT OF FACTS, THE ASSESSEE CONCLUDED THAT THE ENTRIES IN THE SEIZED DIARY DOES NOT SUGGEST THE NATURE OF RECEIPT AGAINST ANY OF THE AMOUNTS NOTED THEREIN AND THE ADDITION MADE MERELY BY REFERRING TO THE SAID ENTRIES, IS NOT JUSTIFIED. FURTHER THAT THE REVENUE HAS TO BRING SOME CORROBORATING EVIDENCE TO SHOW THAT THE ASSESSEE HAS EARNED INCOME OF THESE AMOUNTS, THE ENTRIES OF AMOUNTS REPRESENT SOME TRANSACTION. CONSIDERING THE SAME, THE CIT(A) OBSERVED IN HIS IMPUGNED ORDER THAT THE ASSESSEE FAILED TO EXPLAIN THE ENTRIES BEFORE THE AO AS WELL AS IN THE FIRST APPELLATE PROCEEDINGS AND ESTIMATED THE PROFIT ON THE ADDITION MADE BY THE AO @ 8% AND RESTRICTED THAT ADDITION TO RS. 5,51,723/- AGAINST OF RS. 68,96,532/-. 5. IT WAS BROUGHT TO OUR NOTICE BY THE LD. AR THAT THE REVENUE FILED AN APPEAL AGAINST THE ORDER PASSED BY THE CIT(A) IN RESTRICTING THE ADDITION TO RS. 5,51,724/-, BUT HOWEVER, THE SAID APPEAL HAS BEEN DISMISSED AS WITHDRAWN DUE TO LOW TAX EFFECT. 6. WE NOTE THAT THERE WAS NO EXPLANATION OFFERED BY THE ASSESSEE REGARDING THE ENTRIES FOUND IN THE SEIZED MATERIAL MARKED AS BBC/2 BEFORE THE AO AND CIT(A) AS WELL AS BEFORE THIS TRIBUNAL. NO STEPS HAVE BEEN TAKEN TO EXPLAIN THE SAME AT LEAST BEFORE THIS TRIBUNAL BY FILING RELEVANT DOCUMENTARY EVIDENCE EXPLAINING THE ENTRIES FOUND IN THE SEIZED MATERIAL. THE CIT(A) HAVING CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE ESTIMATED THE PROFIT BY ADOPTING 8% ON ACCOUNT OF REVENUE FROM OPERATIONS. IN OUR OPINION IS FAIR AND REASONABLE TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. AR PLEADED THAT THE PROFIT RATE OF 8% IS EXCESSIVE AND PRAYED TO ADOPT 5% INSTEAD OF 8%. THE LD. DR VEHEMENTLY OPPOSED THE SAME AND ARGUED THAT INSPITE OF HAVING SEVERAL OPPORTUNITIES BEFORE ALL THE AUTHORITIES INCLUDING THIS TRIBUNAL, THE ASSESSEE COULD NOT EXPLAIN THE SAME BY BRINGING ON RECORD THE EVIDENCE IN SUPPORT 3 I.T.A NO.2115/KOL/2018 BRIDGE & BUILDING CONSTRUCTION CO. PVT. LTD. OF CONTENTION MADE THROUGH STATEMENT OF FACTS FILED BEFORE THE CIT(A). FURTHER HE CONTENDED THAT THE ASSESSEE DOES NOT DESERVE ANY REDUCTION IN PROFIT RATE AND IF AT ALL, THIS TRIBUNAL ADOPTS LESS PROFIT RATE THAN 8%, WOULD BE BEARING ON THE APPEALS PENDING FOR 2012-13, 2013-14 AND 2014-15 AND PRAYED TO CONFIRM THE ORDER OF CIT(A). HAVING CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS OF LD. AR AND DR, WE RESTRICT THE PROFIT RATE AT 7% OF AMOUNTS FOUND ON ACCOUNT OF ENTRIES IN THE SEIZED MATERIAL BBC/2 AND THEREFORE, THE ORDER OF CIT(A) IS MODIFIED. THUS GROUND NOS. 1 TO 3 RAISED BY THE ASSESSEE ARE PARTLY ALLOWED 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.02.2020. SD/- SD/- [P.M JAGTAP] [S.S. VISWANETHRA RAVI] VICE-PRESIDENT JUDICIAL MEMBER DATED: 12/02/2020 BISWAJIT, SR.PS COPY OF ORDER FORWARDED TO: 1. BRIDGE & BUILDING CONSTRUCTION CO. PVT. LTD., 90B, SHYAMA PRASAD MUKHERJEE ROAD, KOLKATA 700 026. 2. ITO, WARD 10(1), KOLKATA. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT, KOLKATA