M/s. Maheshwari Builders, BIKANER V. ACIT, BIKANER

ITA 234/JODH/2013

• Counselvise Citation: 23423314 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L MAURYA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.C. GUPTA G.C. GUPTA G.C. GUPTA G.C. GUPTA, , , , HONBLE HONBLE HONBLE HONBLE VICE VICE VICE VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI R.C. SHARMA R.C. SHARMA R.C. SHARMA R.C. SHARMA, , , , HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 234/JODH/2013 234/JODH/2013 234/JODH/2013 234/JODH/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009 - -- - 10 1010 10 M/S MAHESHWARI BUILDERS, M/S MAHESHWARI BUILDERS, M/S MAHESHWARI BUILDERS, M/S MAHESHWARI BUILDERS, 25 2525 25- -- -BUSINESS, SADUL GAN BUSINESS, SADUL GAN BUSINESS, SADUL GAN BUSINESS, SADUL GANJ, J,J, J, BIKANER. BIKANER. BIKANER. BIKANER. PAN : AACFM0455F. PAN : AACFM0455F. PAN : AACFM0455F. PAN : AACFM0455F. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2, 2,2, 2, BIKANER. BIKANER. BIKANER. BIKANER. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE. RESPONDENT BY : SHRI S.L. MAURYA, D.R. DATE OF HEARING : 01.09.2015 01.09.2015 01.09.2015 01.09.2015 DATE OF PRONOUNCEMENT: 04.09.2015 04.09.2015 04.09.2015 04.09.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2009-10 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), BIKAN ER DATED 6 TH MARCH, 2013. 2. AT THE TIME OF HEARING BEFORE US, NONE APPEARED ON BEHALF OF THE ASSESSEE-APPELLANT. THE APPLICATION OF THE ASSESSE E FOR ADJOURNMENT OF THE APPEAL WAS REJECTED BY THE BENCH. ACCORDING LY, THE APPEAL OF THE ASSESSEE IS BEING DECIDED EX PARTE QUA THE ASSESSEE-APPELLANT ON MERITS AFTER HEARING THE ARGUMENTS OF LEARNED DR. 3. GROUND NOS.1 TO 3 OF THE ASSESSEES APPEAL ARE A S UNDER:- 1. THAT THE ORDER PASSED BY THE LEARNED AUTHORITIE S BELOW ARE AGAINST LAW EQUITY JUSTICE & FACTS OF T HE CASE. ITA-234/JODH/2013 2 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED ACIT HAS SERIOUSLY ERRED IN APPLY ING A PROFIT RATE OF 5.5% ON THE CONTRACT RECEIPT AGAINST THE RATE OF PROFIT DECLARED BY THE APPELLANT AT 4.47% A ND THE LEARNED CIT(APPEALS) HAS ALSO ERRED IN CONFIRMI NG THE SAME. 3. THAT THE LEARNED AUTHORITIES BELOW HAVE FAILED T O UNDERSTAND THAT IN THE CONTRACT BUSINESS THE MAINTENANCE OF STOCK OF MATERIAL IS NOT POSSIBLE AN D THEREFORE IT CAN NOT BE MADE BASIS FOR REJECTING TH E BOOKS OF ACCOUNTS OR APPLICATION OF A PROFIT RATE H IGHER THAN THE RATE DECLARED BY THE APPELLANT. FURTHER, THE APPELLANT HAS MAINTAINED HEAD WISE DETAILS OF EXPENDITURE AND AS SUCH FOR PETTY GROUNDS, REJECTIO N OF BOOKS IS NOT JUSTIFIED. 4. THERE IS A NOTING IN THE FILE OF THE SECOND MEMB ER OF THE TRIBUNAL THAT THESE GROUNDS ARE NOT PRESSED BY THE ASSESSEE AND, ACCORDINGLY, THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISS ED. 5. GROUND NO.4 OF THE ASSESSEES APPEAL READS AS UN DER:- 4. THAT THE LD. ASSESSING OFFICER AS WELL AS CIT(A ) IS NOT JUSTIFIED IN NOT ALLOWING THE DEDUCTION OF RS.3,23,389/- ON ACCOUNT OF INTEREST PAID TO THIRD PARTIES AFTER APPLICATION OF RATE OF PROFIT UNDER SECTION 1 45. IT IS ALLOWABLE DEDUCTION EVEN AFTER APPLICATION OF PROFI T RATE AS PER THE VARIOUS JUDICIAL PRONOUNCEMENTS OF THE HON'BLE JURISDICTIONAL HIGH COURT AS WELL AS OTHER HIGH COURTS. 6. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESS ING OFFICER AND THE LEARNED CIT(A). 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT A FLAT RATE OF NET PROFIT HAS BEEN APPLIE D IN THIS CASE AND THE CLAIM OF THE ASSESSEE IS THAT OUT OF THE INCOME SO DETERMINED, DEDUCTION OF INTEREST AT `3.23 LAKHS ON ACCOUNT OF INTEREST PAID TO THIRD ITA-234/JODH/2013 3 PARTIES SHOULD BE ALLOWED AS A DEDUCTION. WE FIND THAT ONCE THE ACCOUNTS OF THE ASSESSEE ARE REJECTED AND A FLAT RA TE OF NET PROFIT IS APPLIED, NO FURTHER DEDUCTION OF INTEREST PAID TO T HIRD PARTIES WAS ALLOWABLE AS DEDUCTION. THE CIT(A) HAS SEPARATELY ALLOWED THE DEDUCTION OF INTEREST AND REMUNERATION PAID TO THE PARTNERS AS PER THE PROVISION OF THE INCOME-TAX ACT, 1961. HOWEVER, SI NCE THE NET PROFIT RATE HAS BEEN APPLIED BY REJECTING THE ACCOUNT BOOK S OF THE ASSESSEE IN THIS CASE, WE ARE OF THE VIEW THAT NO SEPARATE D EDUCTION FOR INTEREST PAID TO THIRD PARTIES COULD BE ALLOWED AND, ACCORDI NGLY, THE GROUND OF APPEAL NO.4 OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 04.09.2015 . SD/- SD/- ( (( ( R.C. S R.C. S R.C. S R.C. S HARMA HARMA HARMA HARMA ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S MAHESHWARI BUILDERS, M/S MAHESHWARI BUILDERS, M/S MAHESHWARI BUILDERS, M/S MAHESHWARI BUILDERS, 25 2525 25- -- -BUSINESS, SADUL GANJ, BIKANER. BUSINESS, SADUL GANJ, BIKANER. BUSINESS, SADUL GANJ, BIKANER. BUSINESS, SADUL GANJ, BIKANER. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME T AX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2, BIKANER. 2, BIKANER. 2, BIKANER. 2, BIKANER. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR