M/s. Builders Shree, Jagatsinghpur V. ACIT, Cuttack

ITA 213/CTK/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5422 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: J M PATNAIK
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.213/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 M/S. BUILDER SHREE, QR. NO.NB /237, NUABAZAR, PARADEEP. VS. ACIT, CIRCLE 1(2), CUTTACK PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI J.M.PATNAIK, AR REV ENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 29 /08/ 2017 DATE OF PRONOUNCEMENT : 31 /08/ 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - CUTTACK DATED 27.2.2015 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN NOT ALLOWING DEPRECIATION AT RS.9,24,287.26 OUT OF THE ESTIMATED PROFIT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS ENGAGED IN THE CIVIL CONTRACT WORK. THE ASSESSEE HAD SHOWN GROSS RECEIPTS OF RS.8,19,11,330/ - UNDER CONTRACT WORK. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE CASH BOOK, BANK BOOK, LEDGER, PARTY LEDGER, BILL REGISTER AND BANK STATEMENT. HOWEVER, THE ASSESSEE COULD NOT PRODUCE CASH BOOK, BILLS AN D OTHER DETAILS. THEREFORE, 2 ITA NO.213/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 THE ASSESSING OFFICER REJECTED THE BOOK RESULTS U/S.145(3) OF THE ACT AND ESTIMATED THE PROFIT @ 8% OF THE GROSS CONTRACT RECEIPTS OF RS.8,19,11,330/ - , WHICH WORKS OUT TO RS.65,52,90 6/ - . THE ASSESSING OFFICER DID NOT ALLOW DE PRECIATION OF RS.9,24,28 7.26 AS CLAIMED BY THE ASSESSEE FROM THE ESTIMATED INCOME. 4. ON APPEAL, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO DEDUCT THE DEPRECIATION FROM THE GROSS CONTRACT BILLS OF RS.8,19,11,330/ - AND ESTIMATE THE NET PROFIT @ 8% ON THE NET CONTRACT RECEIPTS. 5. LD A.R. OF THE ASSESSEE SUBMITTED THAT THE DEPRECIATION SHOULD BE ALLOWED FROM THE ESTIM ATED PROFIT AND NOT GROSS CONTRACT BILLS . LD A.R. FILED A COPY OF ORDER OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF A.K.MOHAPATRA VS ITO IN ITA NOS.601, 602 & 603CTK/2012 ORDER DATED 22.2.2013 WHEREIN, THE TRIBUNAL HAS DIRECTED THE ASSESSING OFFICER TO ACCEPT THE RETURNED INCOME AFTER DEPRECIATION AS CLAIMED BY THE ASSESSEE IN ITS AUDITED FINANCIAL STATEMENT. LD A.R. SUBMITTED THAT THE ASSESSING OFFICER HAS ALLOWED THE DEPRECIATION FOR THE ASSESSMENT YEAR 2009 - 10, 2010 - 11 AND 2011 - 12 EXCEPT FOR THE ASSESSMENT YEAR 2010 - 2011 ON THE BASIS OF AUDITED ACCOUNTS. 6. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, WE FIND THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME SHOWING TOTAL INCOME OF 3 ITA NO.213/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 RS.52,46,270/ - . THE ASSESSING OFFICER REJECTED TH E BOOKS OF ACCOUNT AND DETERMINED THE INCOME AT 8% OF THE TOTAL RECEIPTS OF RS.8,19,11,330/ - AT RS.65,52,906/ - , WITHOUT ALLOWING DEPRECIATION OF RS.9,24,287/ - FROM THE PROFIT SO DETERMINED. 8. ON APPEAL, THE CIT(A) ALLOWED DEPRECIATION FROM GROSS CONTRACT RECEIPTS AND DIRECTED THE ASSESSING OFFICER TO C OMPUTE NET PROFIT @ 8% ON NET CONTRACT RECEIPTS. HENCE, THIS APPEAL BEFORE US. 9. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF M/S. SHRI RAM JHANWAR LAL VS ITO, INCOME TAX APPEAL NO.10 OF 2006 ORDER DATE D 3 RD JULY, 2008, HAS HELD THAT WHERE THE ASSESSING OFFICER ADOPTED NET PR OFIT RATE IN MAKING ASSESSMENT TO THE BEST OF HIS JUDGMENT, ALLOWANCE OF DEPRECIATION THEREFROM IS REQUIRED TO BE MADE. HENCE, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFIC ER TO ALLOW DEPRECIATION FROM THE NET PROFIT ESTIMATED BY APPLYING RATE OF 8% ON THE GROSS RECEIPTS AND NOT FROM THE GROSS TURNOVER AND ALLOW THIS GROUND OF APPEAL OF THE AS SESSEE. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 /08/2017. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 31 /08/2017 B.K.PARIDA, SPS 4 ITA NO.213/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. BUILDER SHREE, QR. NO.NB/237, NUABAZAR, PARADEEP 2. THE RESPONDENT. ACIT, CIRCLE 1(2), CUTTACK 3. THE CIT(A) - CUTTACK 4. PR.CIT - CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//