Asstt. Commissioner of Income Tax, Lucknow V. M/s Vijay Construction, Lucknow

ITA 227/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4424 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K KAPOOR
• Keywords: Search and seizure; Loose papers; Document seized; Corroborative evidences; Documents seized
• Section: 142(1); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.227/LKW/2015 ASSESSMENT YEAR 2009-10 M/S VIJAY CONSTRUCTION, 205-A, PRINCE COMPLEX, HAZRATGANJ, LUCKNOW PAN AAAFV 6106 E VS ACIT, CENTRAL CIRCLE - 1, LUCKNOW CO NO. 33/LKW/2015 (ITA NO.227/LKW/2015) ASSESSMENT YEAR 2009-10 ACIT, CENTRAL CIRCLE - 1, LUCKNOW VS M/S VIJAY CONSTRUCTION, 205-A, PRINCE COMPLEX, HAZRATGANJ, LUCKNOW PAN AAAFV 6106 E (RESPONDENT) (APPELLANT) SHRI ANAND KUMAR AGARWAL, CIT DR APPELLANT BY SHRI P.K. KAPOOR, CA RESPONDENT BY 1 8 /0 5 /2016 DATE OF HEARING 20 /0 5 /2016 DATE OF PRONOUNCEMENT ORDER PER MAHAVIR PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AND THE CROSS O BJECTION IS FILED BY THE ASSESSEE. SINCE, THE APPEAL AND THE CO WERE HEARD TOGETHER, T HESE ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORD ER. ITA NO. 227 / LKW /201 5 2 ITA NO.227/LKW/2015 2. THIS APPEAL IS PREFERRED BY THE REVENUE ON THE F OLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.36, 14,136/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALL OWANCE OF 1% OF THE EXPENSES WITHOUT APPRECIATING THE FACT TH AT THE ADDITION IN QUESTION WAS MADE BY THE ASSESSING OFFI CER ON THE BASIS OF THE FACT THAT THE VOUCHERS RELATING TO THE EXPENSES WERE NEITHER GENUINE NOR VERIFIABLE. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961, OUT AT SEVERAL BUS INESS PREMISES BELONGING TO THE GROUP INCLUDING THAT IN THE ASSESSEE'S CASE AND ITS OTHER BUSINESS ASSOCIATES. SUBSTANTIAL NUMBER OF DOCUMENTS IN THE FORM OF BOOKS OF ACCOUNTS, LOOSE PAPERS AND COMPUTERS ETC. WERE SEIZ ED/IMPOUNDED DURING THESE OPERATIONS. FOR MAKING ASSESSMENT OF INCOME N OTICE U/S 143(2) AND 142(1) WERE ISSUED AND SAME WAS COMPLIED WITH BY TH E ASSESSEE CASE WAS DISCUSSED WITH AR IN DETAILED. SEVERAL ADDITIONS WE RE MADE INCLUDING PRESENT IN QUESTION. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, WHILE EXAMINING THE P & L A/C, WHICH WAS FOUND THAT THE ASSESSEE HA S SHOWN NET PROFIT OF RS.30,62,77,904/- ON GROSS CONTRACT RECEIPTS OF RS. 528,49,90,256/- WHICH COMES AT 5.79% OF TOTAL TURNOVER. THE ASSESSEE HAS DEBITED VARIOUS EXPENSES UNDER CONSTRUCTION EXPENSES AND ADMINISTRA TIVE EXPENSES. IN EXPLANATION, TO GENUINENESS OF THESE EXPENSES BOOKS OF ACCOUNTS AND SOME VOUCHERS WERE PRODUCED. THE VOUCHERS PRODUCED ARE N EITHER FULL NOR VERIFIABLE INASMUCH AS COMPLETE IDENTITY OF THE PAY EES NOT MENTIONED THEREON. FURTHER, MANY VOUCHERS WERE SELF MADE DEBI T VOUCHERS WITHOUT VERIFIABLE DETAIL OF PAYEES. VOUCHERS ESPECIALLY PE RTAINING TO MATERIAL PURCHASE RS.325,72,89,881/-, CONTRACT EXECUTION EXP ENSES RS.86,88,90,704/- AND FUEL & LUBRICANTS OF RS.34,07,54,763/- ARE MOST IRREGULAR AND DEFICIENT. FURTHER DURING THE COURSE OF SEARCH AND SEIZURE OPE RATION ON 14.09.2010 ITA NO. 227 / LKW /201 5 3 ALSO IT WAS NOTICED THAT THE ASSESSEE HAS MADE HEAV Y PAYMENTS OSTENSIBLY FOR BUSINESS RELATED EXPENSES BUT NO VOUCHERS COULD BE PRODUCED DESPITE ASKED TO DO SO AS APPARENT FROM THE STATEMENT OF TH E KEY PERSONS OF THE ASSESSEE COMPANY RECORDED DURING THE COURSE OF SEAR CH ON BEING CONFRONTED WITH THIS ISSUE THE ASSESSEE SIMPLY STATED THAT AS THEY ARE SUPPLIERS OF DIESEL/PETROL TO OUR VEHICLES, THE BILLS WERE LEFT IN OUR OFFICE WHEN THEY HAD COME TO RECONCILE THEIR ACCOUNTS. THE ASSESSEES CO NTENTION WAS NOT CORRECT FROM THIS FACT OF THE CASE ONLY THAT AS MANY AS FOU R PUMP OWNERS BILL BOOKS WERE FOUND AT LUCKNOW OFFICE OF THE ASSESSEE COMPAN Y DURING SEARCH WHEREAS THE PUMP OWNERS BELONGED TO PARTAPGARH, SUL TANPUR AND AZAMGARH. THEREFORE, KEEPING IN VIEW ALL THESE DEFI CIENCIES IN RESPECT OF THE VOUCHERS MAINTAINED BY THE ASSESSEE AND TAKING A V ERY PRAGMATIC APPROACH, ONLY 1% OF THE TOTAL EXPENSES OF RS.446,6 9,35,348/- CLAIMED UNDER THE HEAD OF RS.4,46,69,353/-. ACCORDINGLY, AS SESSING OFFICER COMPLETED THE ASSESSMENT ON TOTAL INCOME OF RS.35,8 2,21,272/-. 4. AGAINST THE ORDER OF THE ASSESSING OFFICER, ASSE SSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A) AND CIT(A) PARTLY ALLOWED THE APPEAL. 5. AGGRIEVED ASSESSEE HAS PREFERRED AN APPEAL BEFOR E US AGAINST THE GROUND IN QUESTION. 6. LD. DR OF THE REVENUE RELIED ON THE ORDER OF THE ASSESSING OFFICER. LD. AR OF THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS PAPER BOOK FILED BY HIM AT PARA 5 OF THE ASSESSING OFFICER THAT BOOKS OF AC COUNTS VIZ CASH BOOK, LEDGER BANK STATEMENTS AND SOME VOUCHERS FOR EXPENS ES WERE PRODUCED AND EXAMINED ON TEST CHECK BASIS. DOCUMENTS FOUND IN TH E COURSE OF SEARCH/SURVEY AND PERTAINING TO THE ASSESSEE WERE E XAMINED AND CONFRONTED TO IT BY PROVIDING COPIES OF THE SAME. A FINDING OF SUCH EXAMINATION OF THE SEIZED DOCUMENTS, BOOKS OF ACCOUNTS AND SUPPORTING EVIDENCE WERE DISCUSSED WITH ASSESSEE. ITA NO. 227 / LKW /201 5 4 7. IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT THESE ISSUES ARE SQUARELY COVERED BY THE TRIBUNALS LUCKNOW BENCH OR DER IN THE CASE OF M/S VIJAY INFRASTRUCTURE LTD. IN ITA NO.254/LKW/2015 DA TED 30.10.2015. 8. THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE OR DER OF THE TRIBUNAL, WE FIND NO JUSTIFICATION TO TAKE A CONTRARY VIEW IN THIS APPEAL. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. CO NO. 33/LKW/2015 9. LD. AR OF THE ASSESSEE DID NOT PRESS THE CROSS O BJECTION, HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 10. IN THE RESULT, APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. SD/- SD/- (A.K.GARODIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20/05/2016 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR