Suraj Taneja, V. ITO, Ward-1,

ITA 2294/DEL/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 6252 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 10-05-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BATINA KAUSHIK
• Assessee Lawyers: SURAJ TANEJA SELF
• Section: 44AD; 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA : VICE PRESIDENT AN D SHRI D.R. SINGH : JUDICIAL MEMBER ITA NO. 2294/DEL/05 A.Y. 2001-02 SURAJ TANEJA, 6 RED CROSS VS. INCOME-TAX OFFICER, COMPLEX, RAILWAY ROAD, WARD-1, NEW DELHI. HISAR. (APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI SURAJ TANEJA, SELF RESPONDENT BY : MS. BATINA KAUSHIK SR.DR. O R D E R PER G.E. VEERABHADRAPPA, V.P : THIS APPEAL, FILED BY THE ASSESSEE, ARISES OUT OF C IT(A)S ORDER DATED 15-12-2004 FOR THE ASSESSMENT YEAR 2001-02. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IS AS UNDER: THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) W AS NOT RIGHT IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ORDER M ADE BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 WHO CALCULATED 8% OF THE CONTRACT RECEIPTS AS INCOME OF THE ASSESSEE U/S 44A D AND ENHANCING HIS INCOME BY RS. 97250/- IGNORING AUDITED ACCOUNTS AND RELEVANT STATEMENT. 2. THE ASSESSEE IS A CONTRACTOR AND FOR THE ASSESSM ENT YEAR IN QUESTION THE ASSESSEE FILED RETURN SHOWING AN INCOME OF RS. 57,060/-, WHICH INCLUDED RS. 38,912/- FROM CONTRACT BUSINESS AND RS. 18,144/ - UNDER THE HEAD INCOME FROM OTHER SOURCES. DURING ASSESSMENT PROCEEDINGS U /S 143(3) THE AO COMPUTED THE INCOME OF THE ASSESSEE FROM CONTRACT W ORK U/S 44AD BY 2 APPLYING NET PROFIT RATE OF 8% ON THE GROSS RECEIPT S SHOWN BY THE ASSESSEE. IN APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE ASSESSEE, WHO APPEARED IN PERSON BEFORE US, CONTENDED THAT HE HAS MAINTAINED PROPER BOOKS OF ACCOUNT AND THE SAME WERE DULY AUDITED U/S 44AB OF THE ACT AND THEREFORE THE AO AS WELL AS THE CIT(A) WERE NOT JUSTIFIED IN ESTIMATING THE INCOME FROM CONTRACT BU SINESS U/S 44AD OF THE ACT. HE ALSO SUBMITTED THAT HE HAS BEEN COOPERATIV E WITH THE DEPARTMENT AND THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN NO T ACCEPTING THE CONTRACT INCOME SHOWN BY THE ASSESSEE. HE PLEADED THAT HE I S A SMALL CONTRACTOR AND THE AO SHOULD HAVE ACCEPTED THE BOOK RESULTS SUBJEC T TO A REASONABLE ADDITION TO THE DISCLOSED INCOME ON THE BASIS OF DI SCREPANCIES WHICH HE HAS NOTICED. 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF REVENUE AUTHORITIES. 5. WE HAVE HEARD RIVAL SUBMISSIONS OF THE PARTIES A ND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE, IN FACT, HAS MAINTAINED THE BOOKS OF ACCOUNT AND GOT THEM AUDITED. THE DEPARTME NT COULD HAVE VERIFIED THESE DETAILS AND MADE SUITABLE ADDITIONS SO AS TO COVE UP THE DEFICIENCY IN THE BOOKS OF ACCOUNT, INSTEAD OF TOTALLY REJECTING THE BOOK RESULTS, WHICH WILL BE AGAINST THE PROVISIONS OF SECTION 44AD(6) OF THE ACT. THE ASSESSEE 3 APPEARS TO BE A SMALL SCALE CONTRACTOR AND DEFINITE LY THE CORRECTNESS OF CLAIMS OF THE ASSESSEE, BASED MOSTLY ON VOUCHERS, COULD NOT BE VERIFIED BY THE AO. WE, THEREFORE, DIRECT THE AO TO TAKE THE IN COME AS DISCLOSED BY THE ASSESSEE AND MAKE AN ADDITION OF RS. 50,000/- TO C OVER UP THE NON- VERIFIABILITY OF THE VOUCHERS. IT IS ORDERED ACCORD INGLY. THE ADDITION OF INCOME FROM OTHER SOURCES, AS MADE BY THE AO, NATUR ALLY STANDS. 5. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN OPEN COURT ON 19-2-2009. ( D.R. SINGH ) ( G.E. VEERABHADRAPPA ) JUDICIAL MEMBER VICE PRESIDENT DATED: 19-2- 2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR