DCIT, Sambalpur V. Amardeep Agrawal, Bargarh

ITA 234/CTK/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7595 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUVENDU DUTTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N. S SAINI, ACCOUNTANT MEMBER ITA NO.234 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 DCIT, CIRCLE 2(1), SAMBALPUR VS. AMARDEEP AGRAWAL, AT: SHASTRI CHOWK, PO: PADAMPUR, DIST: BARAGARH PAN/GIR NO. AEFPA 1526 C (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI SUVENDU DUTTA , DR DATE OF HEARING : 20 /10 / 2016 DATE OF PRONOUNCEMENT : 20 /10 / 2016 O R D E R THIS I S AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR , DATED 12.2.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE SOLE ISSUE IN THIS APPEAL OF THE REVENUE IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN ESTIMATING NET PROFIT @ 4.86% OF GROSS RECEIPTS IN PLACE OF @ 8% ES TIMATED BY THE ASSESSING OFFICER. 3. NOTICE OF HEARING WAS SENT TO THE RESPONDENT - ASSESSEE BY SPEED POST AND THE SAME WAS SERVED ON THE ASSESSEE ON 17.10.2016 AS EVIDENCED BY 2 ITA NO.234/CTK/2015 ASSESSMENT YEAR :2010 - 2011 TRACK CONSIGNMENT REPORT OF INDIAN POST. WHEN THE MATTER WAS CALLED FOR HEARING, NEITHER ANYONE APPEARED O N BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT PETITION WAS FILED. THE BENCH WAS OF THE VIEW THAT THE APPEAL OF THE REVENUE CAN BE DISPOSED OFF IN THE ABSENCE OF RESPONDENT - ASSESSEE. THEREFORE, THE BENCH PROCEEDED TO DISPOSE OF THE APPEAL OF THE REVENUE AFTER CONSIDERING THE SUBMISSION OF LD D.R. AND ON THE BASI S OF MATERIAL AVAILABLE ON RECORD. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE FILED RETURN OF INCOME SHOWING TOTAL INCOME AT RS.18,66,920/ - . THE ASSESSING OFFICER OBSERVED THAT D URING THE YEAR, THE ASSESSEE HAS SHOWN NET PROFIT @ 3.61%, WHICH IS ABNORMALLY LOW. THE ASSESSEE HAS EXECUTED ROAD CONSTRUCTION IN RURAL AREAS UNDER PRIME MINISTER GRAM SADAK YOJANA SCHEME (PMGSY) WITH THE GOVERNMENT CONCERNS. DURING THE ASSESSMENT PROC EEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE THE SUPPORTING DOCUMENTS & DETAILS OF CONTRACT EXPENSE AND OTHER OVERHEAD EXPENSES. THE ASSESSEE DEBITED THE MAJOR EXPENSES UNDER THE HEAD CONTRACT EXPENSE TO THE TUNE OF RS.4,64,42,591/ - AGAINST THE GROSS RECE IPT OF RS.5,39,32,595/ - . THE ASSESSING OFFICER OBSERVED THAT THE LD A.R. OF THE ASSESSEE EXPRESSED INABILITY TO FURNISH ALL THE SUPPORTING BILLS IN RESPECT OF PURCHASE OF MATERIALS, ESPECIALLY MATERIALS PURCHASED FROM UNREGISTERED DEALERS LIKE SUPPLY OF S AND, MORRUM, CHIPS AND METALS. HE ALSO EXPRESSED INABILITY TO FURNISH COMPLETE ADDRESS AND DETAILS OF SUNDRY 3 ITA NO.234/CTK/2015 ASSESSMENT YEAR :2010 - 2011 CREDITORS. HE ALSO FAILED TO FURNISH SUPPORTING DOCUMENTS IN RESPECT OF WAGES PAYMENT TO LABOURERS. THE ASSESSING OFFICER OBSERVED THAT THE CLAIM OF EXPENSES OF RS.4.64 CRORES TOWARDS CONTRACT EXPENS E AGAINST CONTRACT RECEIPT OF R S.5.39 CRORES APPEARS TO BE UNUSUAL. THEREFORE, HE HELD THAT THE GENUINENESS OF EXPENSE OF R S.4.64 CRORES AND SUNDRY CREDITORS OF RS.1.41 CORES REMAINED UNASCERTAINABLE AND UNVERIFIED. THEREFORE, HE REJECTED THE BOOK RESULTS OF THE ASSESSEE AND ESTIMATED THE NET PROFIT IN RESPECT OF CIVIL CONTRACT BUSINESS @ 8% OF GROSS RECEIPTS OF RS.5,39,32,595/ - , WHICH WORKS OUT TO RS.43,14,608/ - . 5. ON APPEAL, LD CIT(A) AFTER REFERRI NG TO SOME OF THE COMPANIES IN CONSTRUCTION AND CONTRACT BUSINESS, DETAILS OF WHICH ARE GIVEN IN HIS ORDER, OBSERVED THAT THOSE ENTITIES HAVE SHOWN 3.21% AS NET PROFIT. HE, THEREFORE, ESTIMATED THE INCOME OF THE ASSESSEE @ 4.86%. 6. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 8. WHEN QUESTIONED BY THE BENCH THAT IN THE ORDER, THE LD CIT(A) HAS STATED THAT IN THE PRECEDING ASSESSMENT YEAR 2009 - 2010, THE ASSESSEE HAS SHOWN NET PROF IT @ 2.32% AND IN THE ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAS SHOWN NET PROFIT @ 5.01%, THEN HOW THE NET PROFIT PERCENTAGE @ 4.86% IN THE PRESENT YEAR ADOPTED BY THE LD CIT (A) DOES NOT COMPARE WITH THE NET PROFIT SHOWN BY THE ASSESSEE IN THE IMMEDIATELY PRECEDING 4 ITA NO.234/CTK/2015 ASSESSMENT YEAR :2010 - 2011 YEARS AND WHAT WAS THE BASIS OF THE AO FOR ADOPTING NET PROFIT @ 8% AS THE NET PROFIT RATE OF THE ASSESSEE ON THE GROSS CONTRACT RECEIPTS, LD D.R. COULD NOT REPLY TO THE QUERY OF THE BENCH. 9. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN TOTALITY, I AM OF THE CONSIDERED VIEW THAT KEEPING IN VIEW THE PAST ACCEPTED RESULTS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2008 - 09 & 2009 - 2010, THE ADOPTION OF NET PROFIT BY THE ASSESSEE @ 4.86% APPEARS TO BE REASONABLE. HENCE, I CONFIRM THE O RDER OF THE LD CIT(A) AND DISMISS THE GROUNDS OF THE REVENUE. 10. IN THE RESULT, THE APPEAL F ILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 20 /10 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N. S SAINI ) A CCOUNTANT MEMBER CUTTACK; DATED 20 /10 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : DCIT, CIRCLE 2(1), SAMBALPUR 2. THE RESPONDENT. AMARDEEP AGRAWAL, AT: SHASTRI CHOWK, PO: PADAMPUR, DIST: BARAGARH 3. THE CIT(A),2, BHUBANESWAR. 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//