Ashok Kapoor, Delhi V. DCIT, New Delhi

ITA 2348/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5208 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH SENIOR
• Assessee Lawyers: D C AGGARWAL
• Keywords: Business expenditure; Opportunity of being heard; Set aside
• Section: 44AD

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 DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO. 2348/DEL/2015 2348/DEL/2015 2348/DEL/2015 2348/DEL/2015 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2010 2010 2010 2010 - -- - 11 1111 11 SHRI ASHOK KAPOOR, SHRI ASHOK KAPOOR, SHRI ASHOK KAPOOR, SHRI ASHOK KAPOOR, 964, 2 964, 2 964, 2 964, 2 ND NDND ND FLOOR, FLOOR, FLOOR, FLOOR, DR. MUKHERJEE NAGAR, DR. MUKHERJEE NAGAR, DR. MUKHERJEE NAGAR, DR. MUKHERJEE NAGAR, DELHI DELHI DELHI DELHI 110 009. 110 009. 110 009. 110 009. PAN : AEFPK4458P. PAN : AEFPK4458P. PAN : AEFPK4458P. PAN : AEFPK4458P. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -07, 07, 07, 07, (ERSTWHILE CENTRAL CIRCLE (ERSTWHILE CENTRAL CIRCLE (ERSTWHILE CENTRAL CIRCLE (ERSTWHILE CENTRAL CIRCLE- -- -12), 12), 12), 12), ARA CENTRE, JHANDEWALAN EXTN., ARA CENTRE, JHANDEWALAN EXTN., ARA CENTRE, JHANDEWALAN EXTN., ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 055. 110 055. 110 055. 110 055. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.C. AGGARWAL, AD VOCATE. RESPONDENT BY : SHRI AMIT KATOCH, SENIOR DR. DATE OF HEARING : 28.05.2019 28.05.2019 28.05.2019 28.05.2019 DATE OF PRONOUNCEMENT : 29.05.2019 29.05.2019 29.05.2019 29.05.2019 ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2010-11 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-24, NE W DELHI DATED 24 TH MARCH, 2015. 2. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL THAT IN THIS APPEAL, THERE ARE ONLY TWO MAI N GROUNDS, THE FIRST ONE WITH REGARD TO ESTIMATION OF INCOME FROM HOUSE PROPERTY AND THE SECOND IS ESTIMATION OF INCOME FROM BUSINESS OR PRO FESSION. 3. WITH REGARD TO THE FIRST ISSUE, HE STATED THAT F OR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN INCOME FROM H OUSE PROPERTY AT 964, DR. MUKHERJEE NAGAR, DELHI AT `3,50,000/-. TH E ASSESSING OFFICER ESTIMATED THE ALV AT `12,00,000/- WITHOUT ANY BASIS OR JUSTIFICATION. HE FILED A CHART SHOWING THAT THE ALV OF THE SAME P ROPERTY WAS ITA-2348/DEL/2015 2 ACCEPTED AT `3,60,000/- IN THE PRECEDING AS WELL AS SUBSEQUENT YEAR, AS UNDER :- S.NO. ASS ESSMENT YEAR ALV DECLARED INCOME FROM HOUSE PROPERTY DECLARED ON THE BASIS OF ALV INCOME FROM HOUSE PROPERTY ASSESSED 1 2007 - 08 3,36,000 1,50,309 1,50,309 2 2008 - 09 3,60,000 1,83,922 1,83,922 3 2009 - 10 3,60,000 1,75,517 1,75,517 4 2010 - 11 3,50,000 2,35 ,997 8,30,957 5 2011 - 12 3,60,000 2,34,641 ** 6 2012 - 13 3,00,000 1,96,643 ** HE STATED THAT EXCEPT FOR THE YEAR UNDER CONSIDERAT ION, THE INCOME DISCLOSED BY THE ASSESSEE HAS BEEN ACCEPTED. 4. LEARNED SENIOR DR, ON THE OTHER HAND, RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. FROM A PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSING OFFICE R HAS NOT GIVEN ANY REASON FOR ESTIMATING THE ALV AT `12,00,000/- AS AG AINST `3,50,000/- DISCLOSED BY THE ASSESSEE. HOWEVER, FROM THE CHART FURNISHED BY THE ASSESSEE, WE FIND THAT IN THE PRECEDING TWO ASSESSM ENT YEARS AS WELL AS IMMEDIATELY SUCCEEDING ASSESSMENT YEAR, THE ASSE SSEE HIMSELF HAS DISCLOSED THE ALV OF THE SAME PROPERTY AT `3,60,000 /-. WHEN THE ALV OF THE PROPERTY WAS `3,60,000/- IN THE IMMEDIATELY PRECEDING YEARS AS WELL AS SUBSEQUENT YEAR, THERE CANNOT BE ANY JUSTIF ICATION FOR TAKING THE SAME AT `12,00,000/-. IN VIEW OF THE ABOVE, WE DIRECT THAT THE ALV OF THE SAID PROPERTY FOR THE YEAR UNDER CONSIDERATI ON WOULD BE TAKEN AT `3,60,000/-. ITA-2348/DEL/2015 3 6. WITH REGARD TO THE SECOND ISSUE I.E., THE ESTIMA TION OF INCOME FROM HOUSE PROPERTY, LEARNED COUNSEL FOR THE ASSESS EE STATED THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT IN THE PRE CEDING YEARS I.E. ASSESSMENT YEARS 2007-08 TO 2009-10. THE FACTS OF THE YEAR UNDER CONSIDERATION ARE SIMILAR I.E., IN THE EARLIER YEAR S ALSO, THE ASSESSING OFFICER HAD ESTIMATED THE GROSS PROFIT AT 8% SIMILA R TO THE ESTIMATION OF GROSS PROFIT OF THE YEAR UNDER CONSIDERATION. LEAR NED CIT(A) HAS STATED THAT AS PER CONTRACT, THE ASSESSEE IS ENTITLED TO G ROSS PROFIT OF 2% ONLY AND FROM THAT GROSS PROFIT, THE EXPENDITURE DEBITED IN THE PROFIT & LOSS ACCOUNT IS TO BE ALLOWED. THIS FINDING OF LEARNED CIT(A) WAS ACCEPTED BY THE ITAT. HE STATED THAT SAME ARE THE FACTS IN THE YEAR UNDER CONSIDERATION AND THEREFORE, THE ORDER OF THE ITAT IN THE EARLIER YEARS WOULD BE SQUARELY APPLICABLE. HE FURTHER SUBMITTED THAT OUT OF THE TOTAL RECEIPT OF MORE THAN `22 CRORES, PART OF THE RECEIPT IS PERTAINING TO THE PRECEDING YEARS AND THE INCOME FROM THAT REC EIPT HAS ALREADY BEEN BOOKED IN THE EARLIER YEARS WHEN THE GOODS WER E ACTUALLY SUPPLIED. 7. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF AUTHORITIES BELOW. 8. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE ITAT IN ASSESSEES OWN C ASE FOR ASSESSMENT YEAR 2007-08 TO 2009-10, WHEREIN VIDE OR DER DATED 24 TH JANUARY, 2014 IN ITA NO.2035 TO 2037/DEL/2012, IT W AS HELD AS UNDER :- 14. ON MERITS ALSO WE FIND THAT ASSESSING OFFICER HAS NOT CONSIDERED THE EXPENSES INCURRED BY THE ASSESSEE FO R EARNING OF 2% OF GROSS INCOME AND LD.CIT(A) HAS RIG HTLY AGREED WITH THE SUBMISSIONS OF ASSESSEE AND HAS RIG HTLY HELD THAT NECESSARY BUSINESS EXPENDITURE HAS TO BE ALLOWED IN THE CASE OF ANY ASSESSEE. WE FURTHER FI ND THAT IF THE ASSESSING OFFICER WAS TO ESTIMATE THE INCOME OF ASSESSEE IN THE ABSENCE OF PRODUCTION OF BOOKS OF A CCOUNTS HE COULD HAVE TAKEN GUIDANCE FROM THE PROVISIONS OF SECTION 44AD OF THE ACT WHICH STATES THAT A SUM EQU AL TO ITA-2348/DEL/2015 4 8% OF TOTAL TURNOVER OR GROSS RECEIPTS OF THE ASSES SEE CAN BE TAKEN AS THE PROFITS EARNED BY AN ASSESSEE ENGA GED IN THE ELIGIBLE BUSINESS OF CONSTRUCTION AND IN THE PR ESENT CASES THE GROSS RECEIPTS ARE THE AMOUNTS RECEIVED B Y THE ASSESSEE BEING AN AMOUNT EQUAL TO 2%. AS PER THE N OTES ATTACHED WITH BALANCE SHEET AS RELIED UPON BY ASSES SING OFFICER, THE ASSESSEE WAS TO GET 2% FOR PROVIDING V ARIOUS SERVICES SUCH AS PROCUREMENT OF MATERIAL AND CONSTR UCTION ACTIVITIES ON BEHALF OF CONTRACTEE, THEREFORE, 2% R EPRESENTS THE GROSS INCOME OF ASSESSEE AND NECESSARY EXPENDIT URE HAS TO BE ALLOWED OUT OF THIS GROSS AMOUNT FOR ARRI VING AT NET INCOME. THEREFORE, ON MERITS ALSO, WE DO NOT S EE ANY INFIRMITY IN THE ORDER OF LD.CIT(A). THEREFORE, TH E APPEALS FILED BY THE REVENUE ARE DISMISSED. 9. SINCE THE FACTS IN THE YEAR UNDER CONSIDERATION ARE IDENTICAL, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS P OINT AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER AND DIR ECT HIM TO ADJUDICATE THE ISSUE IN THE LIGHT OF THE DIRECTION OF THE ITAT IN EARLIER YEARS. THE LEARNED COUNSEL FOR THE ASSESSEE HAD FURTHER SUBMIT TED THAT THE INCOME FROM PART OF THE RECEIPT IN THIS YEAR HAD AL READY BEEN OFFERED FOR TAX IN THE EARLIER YEAR AND ASSESSED AS SUCH. WE DIRECT THE ASSESSEE TO MAKE THIS CLAIM ALONG WITH NECESSARY EV IDENCE BEFORE THE ASSESSING OFFICER. IF THE ASSESSEE MAKES SUCH CLAI M BEFORE THE ASSESSING OFFICER, HE WILL CONSIDER THE SAME AND AD JUDICATE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT ASSE SSING OFFICER WILL AFFORD SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE GIVING EFFECT TO THIS ORDER. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DE EMED TO BE ALLOWED AS ABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON 29 TH MAY, 2019. SD/- SD/- ( (( ( SUCHITRA KAMBLE SUCHITRA KAMBLE SUCHITRA KAMBLE SUCHITRA KAMBLE ) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 29.05.2019 VK. ITA-2348/DEL/2015 5 COPY FORWARDED TO: - 1. APPELLANT : SHRI ASHOK KAPOOR, SHRI ASHOK KAPOOR, SHRI ASHOK KAPOOR, SHRI ASHOK KAPOOR, 964, 2 964, 2 964, 2 964, 2 ND NDND ND FLOOR, DR. MUKHERJEE NAGAR, FLOOR, DR. MUKHERJEE NAGAR, FLOOR, DR. MUKHERJEE NAGAR, FLOOR, DR. MUKHERJEE NAGAR, DELHI DELHI DELHI DELHI 110 009. 110 009. 110 009. 110 009. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -07, (ERSTWHILE CENTRAL CIRCLE 07, (ERSTWHILE CENTRAL CIRCLE 07, (ERSTWHILE CENTRAL CIRCLE 07, (ERSTWHILE CENTRAL CIRCLE- -- -12), 12), 12), 12), ARA CENTRE, JHANDEWALAN EXTN., ARA CENTRE, JHANDEWALAN EXTN., ARA CENTRE, JHANDEWALAN EXTN., ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 055. 110 055. 110 055. 110 055. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR