M/s Ridge Telecom Solutions Pvt. Ltd., Mohali V. DCIT, Mohali

ITA 224/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9897 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 13-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 224/CHD/2016 ASSESSMENT YEAR : 2008-09 M/S RIDGE TELECOM VS THE DCIT, SOLUTION (P) LTD., CIRCLE 6(1), PHASE 3B1, MOHALI. MOHALI. PAN: AADCR8003J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGA RWAL RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 17.06.2016 DATE OF PRONOUNCEMENT : 21.06.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-2 CHANDIGARH DATED 05.01.2016 FOR ASSESSMENT YEAR 2008-09, CHALLENGING THE UPHOLDING OF ADDITION OF RS. 13,54,599/- BY APPLYING PROFIT RATE OF 12%. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPANY IS DOING BUSINESS OF CONTRACTOR PROVIDING SERVICES OF CIVIL WORK FABRICATION, INSTALLATION OF TELECOM TOWERS AND OTHER TELECOM RELATED ACTIVITIES . THE ASSESSEE HAS SHOWN GROSS RECEIPTS OF RS. 1,52,47,211/- IN ITS BOOKS OF ACCOUNT AND CLAIMED CREDIT OF TDS OF RS. 3,74,193/- IN THE RETURN OF IN COME. 2 THE ASSESSING OFFICER ASKED FOR CERTAIN INFORMATION AND DIRECTED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT A ND SUPPORTING BILLS AND VOUCHERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE ASSESSEE DID NOT PRODUCED BOOKS OF ACCOUNT, BILLS AND VOUCHERS AND RELEVANT INFORMATION BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT EX-PARTE UNDER SECTION 144 OF THE INCOME TAX ACT AND APPLIED PROFIT RATE OF 12% ON THE GROSS RECEIPTS OF RS. 1.7 2 CR AS PER AMOUNT RECEIVED AGAINST TDS DEDUCTED AND COMPLETED THE ASSESSMENT AT RS. 20,64,212/- BY MAKING ADDITION OF RS. 13,54,599/- TO THE RETURNED INCOME FOLLOWING THE ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF SHRI BAHADUR SINGH. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION IS FILED WHICH IS QUOTED IN THE APPELLATE ORDER IN WHICH ASSESSEE TRI ED TO JUSTIFY LOWER GROSS RECEIPTS OF RS. 1.52 CR AND ALS O SUBMITTED THAT THE INCOME SHOULD BE ASSESSED @ 8% INSTEAD OF 12%. 4. THE LD. CIT(APPEALS) FORWARDED THE SUBMISSION OF THE ASSESSEE AND RECONCILIATION TO THE ASSESSING OF FICER AND ASSESSING OFFICER FILED HIS REPORT AFFIRMING TH EREIN THAT NO DETAILS HAVE BEEN FILED IN SUPPORT OF ANY R E- CONCILIATION. 3 5. THE LD. CIT(APPEALS), CONSIDERING MATERIAL ON RECORD FOUND THAT ASSESSEE HAS NOT EXPLAINED ANY DISCREPANCY AND WHATEVER RE-CONCILIATION STATEMENT WAS FILED HAS NOT BEEN CORROBORATED WITH THE BOOKS OF ACCOUNT AND OTHER EVIDENCE ON RECORD. THE LD. CIT(APPEALS), ACCORDINGLY, DISMISSED THE APPEAL OF THE ASSESSEE. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS THE FIRST YEAR OF BUSINESS OF THE ASSESSEE AND I N SUBSEQUENT ASSESSMENT YEAR 2010-11, THE ASSESSING OFFICER IN THE ORDER UNDER SECTION 143(3) DATED 27.12.2012 ACCEPTED THE NP RATE OF 5.28% AND IN LAT ER YEAR IT WAS 5.56%. IN ASSESSMENT YEAR 2014-15, IT W AS 6.56%. HE HAS, THEREFORE, SUBMITTED THAT APPLICATI ON OF PROFIT RATE OF 12% IS EXCESSIVE AND UNREASONABLE . ON THE OTHER HAND, LD. DR SUBMITTED THAT ITAT IN TH E CASE OF SHRI BAHADUR SINGH (SUPRA) AS RELIED UPON B Y ASSESSING OFFICER, CORRECTLY APPLIED PROFIT RATE OF 12%. 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, I AM OF THE VIEW ADDITION IS EXCESSIVE IN NATURE. THE ASSE SSEE DID NOT PRODUCED BOOKS OF ACCOUNT AND SUPPORTING DOCUMENTS BEFORE ASSESSING OFFICER THEREFORE, REJEC TION OF THE BOOKS OF ACCOUNT AND FRAMING OF EX-PARTE ASSESSMENT IS WHOLLY JUSTIFIED WHICH IS ALSO NOT IN CHALLENGE BEFORE ME. THE ASSESSEE PLEADED BEFORE L D. CIT(APPEALS) THAT THERE IS A DISCREPANCY IN THE TUR NOVER TAKEN BY ASSESSING OFFICER BUT NO EVIDENCE OR MATER IAL 4 WAS PRODUCED IN THIS REGARD. FURTHER, TURNOVER WAS TAKEN BY THE ASSESSING OFFICER AS PER THE AMOUNT RECEIVED AGAINST TDS. THEREFORE, ASSESSEE FAILED T O EXPLAIN ANY DISCREPANCY IN THE ORDERS OF THE AUTHOR ITIES BELOW. HOWEVER, ASSESSEE PLEADED THAT IN SUBSEQUEN T YEAR, ASSESSEE DECLARED NP RATE OF 5.28%, 5.56% AND 6.56%. THEREFORE, CONSIDERING THE HISTORY OF THE ASSESSEE, APPLICATION OF PROFIT RATE OF 12% IS EXCE SSIVE. HOWEVER, CONSIDERING THE FACT THAT ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT AND ANY RELEVANT EVIDENCE AND MATERIAL ON RECORD, ASSESSING OFFICER WAS JUSTI FIED IN COMPUTING HIGHER RATE. THEREFORE, CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES AND HISTORY OF THE ASSESSEE, I MODIFY THE ORDERS OF AUTHORITIES BELOW TO THE EXTENT THAT ASSESSING OFFICER WILL APPLY PROFIT RATE OF 9% FOR THE PURPOSE OF COMPUTING THE INCOME OF TH E ASSESSEE AS AGAINST 12%. OTHER FINDINGS OF AUTHORI TIES BELOW ARE, HOWEVER, CONFIRMED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 21 ST JUNE, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD