The Deputy Commissioner of Income tax, Pathankot V. Sh. Vidya Sagar Saini, Pathankot

ITA 244/ASR/2010

• Counselvise Citation: 24420914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Keywords: Rejection of books of accounts; Depreciation
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, HONBLE VICE PRESIDENT AND SH. D.K. SRIVASTAVA, ACCOUNTANT MEMBER I.T.A. NO. 244(ASR)/2010 ASSESSMENT YEAR:2006-07 DY. COMMR. OF INCOME-TAX, VS. SH. VIDYA SAGAR SAIN I, CIRCLE, PATHANKOT. GOVT. CONTRACTOR, PATHANKOT. PAN:AILPS5183K (APPELLANT) (RESPONDENT) C.O. NO.13(ASR)/2010 (ARISING OUT OF ITA NO. 244(ASR)/2010) ASSESSMENT YEAR: 2006-07 SH. VIDYA SAGAR SAINI, VS. DY. COMMR. OF INCOME-TA X, GOVT. CONTRACTOR, PATHANKOT. CIRCLE, PATHANKOT. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. AMRIK CHAND, DR RESPONDENT BY:SH. SALIL KAPOOR, ADV. DATE OF HEARING :13.12.2011 DATE OF PRONOUNCEMENT:13.12.2011 ORDER PER H.L. KARWA, VP 2 THE APPEAL BY THE REVENUE AND C.O. BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A), AMRITSAR, DATED 12.03. 2010 RELATING TO ASSESSMENT YEAR 2006-07. 2. IN THIS APPEAL, THE REVENUE HAS RAISED FOLLOWING GROUNDS: 1. THE LD. CIT(A) ON THE FACTS AND CIRCUMSTANCES O F THE CASE AND UNDER THE LAW HAS ERRED IN APPLYING RATE O F 8% OF N.P. AGAINST 13% APPLIED BY THE AO WITHOUT APPRECIATING THAT THE ASSESSEE HAD SHOWN ONLY NP OF 1.1%. 2. THE LD. CIT(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND UNDER THE LAW HAS ERRED IN APPLYING RATE O F 13% WAS APPLIED BY THE AO AFTER PIN-POINTING SPECIFIC CAS ES OF INFLATION IN THE NAME OF SH. VIPAN SAINI ON ACCOUNT OF TRACT OR AND MACHINERY HIRE CHARGES AND PURCHASE OF DUST. 3. THE LD. CIT(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND UNDER THE LAW HAS ERRED IN APPLYING RATE O F 13% BY RELYING UPON THE CASES OF M/S. J & K BUILDERS AND C ONTRACTORS, GURDSASPUR AND SH. SANDEEP KUMAR DHAWAN OF PATHANKO T WHEREIN THE ASSESSEES HAD SHOWN PROFIT AT 13% AND 1 3.2% ON CONTRACT RECEIPTS OF RS.2.32 CRORES AND RS.1.43 CRO RES RESPECTIVELY. 4. THE LD. CIT(A) FAILED TO APPRECIATE THAT EVERY ASSESSMENT YEAR IS SEPARATE ONE AND AO HAD APPLIED NP OF 13% DUE TO PECULIAR FACTS AND CIRCUMSTANCES IN THIS ASS ESSMENT YEAR. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACT MAINLY FOR GOVT. DEP ARTMENTS. DURING THE YEAR UNDER CONSIDERATION, THE CONTRACT RECEIPTS HAVE BEE N SHOWN AT RS.6,20,78,789/- WITH RESULTANT NET PROFIT OF RS.7, 06,697/-, BEING 1.1% OF THE 3 CONTRACT RECEIPTS. THE AO OBSERVED THAT WHILE VERIF YING BOOKS OF ACCOUNT, ONE LOOSE PAPER WRITTEN IN THE HANDWRITING OF SH. G OPAL, EX-ACCOUNTANT OF THE ASSESSEE FOUND WHICH REFLECTED SOME CONTRACT WO RK OF RS.1,25,46,472/- IN DINA NAGAR AREA ON WHICH THE TOTAL EXPENSES WERE SHOWN AT RS.83,84,817/- WITH THE NET PROFIT OF ABOUT 33%. TH E AO FURTHER OBSERVED THAT AS PER BALANCE SHEET THERE WERE SUNDRY CREDITO RS OF RS.33,17,288/- AS ON 31 ST MARCH, 2006. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE AO REQUIRED THE ASSESSEE TO FILE CONFIRMATIONS SINCE T HE COPIES OF BILLS FILED BY THE ASSESSEE WERE ALL COMPUTER PRINTS WITH SIMILAR FONTS PREPARED IN THE SAME HANDWRITING. THE AO FURTHER OBSERVED THAT THER E WAS CREDIT BALANCE OF RS.3,00,350/- IN THE NAME OF SH. VIPIN SAINI ON ACC OUNT OF TRACTOR AND MACHINERY HIRE CHARGES AND PURCHASE OF DUST. ON EN QUIRY, THE AO FOUND THAT THIS PERSON DID NOT HAVE ANY TRACTOR OR MACHINERY I N HIS NAME AND HE WAS UNABLE TO PRODUCE COPIES OF BILLS AND OTHER RECORDS . THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD SHOWN PAYMENT OF RS.2,50,000/ - TO AMBAY CONSTRUCTION COMPANY OF WHICH SMT. ANJU SHARMA WAS PROPRIETOR. HOWEVER, SMT. ANJU SHRMA ON ENQUIRY DID NOT PRODUCE THE COPIES OF BILLS AND ALSO DID NOT KNOW ANYTHING ABOUT HER BUSINESS. THE AO FURTHER FOUND THAT MOST OF THE PURCHASES OF RAW MATERIAL LIKE SA ND, BAZARI ETC. WERE FROM THE PERSONS TO WHOM THE PAYMENTS WERE MADE IN CASH AND ALSO SHOWN AS OUTSTANDING ON 31.03.2006. ACCORDING TO THE AO, TH E LETTERS WRITTEN TO 4 SEVERAL STONE CRUSHERS WERE RECEIVED UNDELIVERED. T HE AO ALSO OBSERVED THAT WHILE EXAMINING THE BOOKS OF ACCOUNTS, MANY VOUCHE RS OF VARIOUS EXPENSES WERE NOT AVAILABLE AND WERE ALSO SELF PREPARED VOU CHERS. THE ASSESSEE DID NOT FURNISH THE DETAILS OF SITE WISE PURCHASE AND C ONSUMPTION OF RAW MATERIAL, WAGES AND OTHER EXPENSES. IN VIEW OF THES E DISCREPANCIES, THE AO CAME TO THE CONCLUSION THAT THE BOOKS OF ACCOUNTS O F THE ASSESSEE DID NOT REFLECT TRUE PROFITS. THE AO AFFORDED AN OPPORTUNIT Y TO THE ASSESSEE TO EXPLAIN THE ABOVE DISCREPANCIES. THE AO OBSERVED TH AT THE ASSESSEE HAD ADMITTED THAT HE DID NOT HAVE ANY SITE-WISE RECORD OF MATERIAL PURCHASED OR CONSUMED., WAGES AND OTHER EXPENSES. THE ASSESSEE A LSO DID NOT PRODUCE SH. GOPAL, EX-ACCOUNTANT FOR EXAMINATION AS REQUIRED B Y THE A.O. BESIDES SH. VIPIN SAINI DENIED HAVING ANY AMOUNT RECEIVABLE FRO M THE ASSESSEE AND ADMITTED THAT HE DID NOT OWN ANY TRACTOR. AS THE AS SESSEE WAS NOT HAVING ANY STOCK REGISTER, SITE-WISE DETAILS OF WAGES TO W ORKERS/EMPLOYEES WHEREAS HE WAS EXECUTING CONTRACT WORKS AT DIFFERENT SITES IN PUNJAB AND HIMACHAL PRADESH, THE AO REJECTED THE BOOKS OF ACCOUNT U/S 1 45(3) OF THE ACT AND FINALIZED ASSESSMENT U/S 144 OF THE ACT. THE AO APP LIED PROFIT RATE OF 13% ON THE CONTRACT RECEIPT OF RS.6.20 CRORES AND MADE THE ADDITION OF RS.64,86,334/-. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE MAIN CONTENTION OF TH E ASSESSEE IN THE WRITTEN 5 SUBMISSIONS WAS THAT HE HAD MAINTAINED REGULAR BOOK S OF ACCOUNT CONSISTING OF CASH BOOK, LEDGER, JOURNAL, PURCHASE VOUCHERS AN D SUPPORTING VOUCHERS ETC. SEPARATE SETS WERE MAINTAINED FOR H.P. WORK AN D PUNJAB WORK. IT WAS ALSO SUBMITTED THAT NO DEFECT WAS FOUND IN THE BOOK S OF ACCOUNT AND THE REASONS GIVEN FOR REJECTING BOOKS OF ACCOUNT DID NO T JUSTIFY REJECTION. IT WAS ALSO SUBMITTED THAT THE REFERENCE TO ONE LOOSE PAP ER WRITTEN BY SH. GOPAL SINGH, EX-ACCOUNTANT WAS INCOMPLETE AS BITUMEN EXP ENSES WERE NOT MENTIONED IN THAT PAPER AND THE BOOKS OF ACCOUNT CO ULD NOT BE REJECTED ON THE BASIS OF THAT LOOSE PAPER. THE ASSESSEE FURTHER BROUGHT TO THE NOTICE OF THE CIT(A) THAT THE ASSESSMENT FOR THE A.Y. 2007-08 HAS ALSO BEEN COMPLETED AFTER SCRUTINY. IT WAS SATED THAT NATURE OF BUSINES S WAS SAME AND THE ASSESSEE HAD MAINTAINED ALL BOOKS OF ACCOUNT ON THE SAME PAT TERN AS FOR THE A.Y. 2006-07. THE ASSESSEE ALSO SUBMITTED BEFORE THE CIT (A) THAT HIS FAMILY WAS LIVING AT PATHANKOT. HE WAS NOT HAVING THE BENEFIT OF ANY PARTNER OR ANY ASSOCIATE. DUE TO PAUCITY OF TIME, IT WAS NOT POSS IBLE FOR HIM TO CONTRADICT VARIOUS OBSERVATIONS AND, THEREFORE, UNDER THE CIR CUMSTANCES, THE ASSESSEE HAD AGREED THAT THE ASSESSMENT BE COMPLETED BY APPL YING RATE OF 8% ON NET RECEIPTS I.E. GROSS RECEIPTS MINUS MATERIAL SUPPLIE D BY CONCERNED DEPARTMENTS, SUBJECT TO DEPRECIATION AS PER RECORD AND SUBJECT TO NO PENALTY. AFTER CONSIDERING THE SUBMISSION, THE ADDL. CIT, R ANGE-IV, PATHANKOT, COMPLETED THE ASSESSMENT FOR THE A.Y. 2007-08 BY AP PLYING RATE OF 8%. THE 6 ASSESSEE, THEREFORE, SUBMITTED BEFORE THE LD. CIT(A ) THAT THE APPEAL FOR THE A.Y. 2006-07 MAY ALSO BE DECIDED ACCORDINGLY. 5. THE LD. CIT(A) ADOPTED THE RATE OF 8% AS AGAINST 13% APPLIED BY THE A.O., OBSERVING AS UNDER: 6. I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED CO UNSEL FOR THE APPELLANT AND GONE THROUGH THE MATERIAL PLACED BEFO RE ME AS WELL AS THE JUDICIAL RULINGS RELIED ON BY THE AO. FROM THE FACTS OF THE CASE, IT IS ABUNDANTLY CLEAR THAT AO NOTICED SEVERAL DEFECTS AS IN THE BOOKS OF ACCOUNTS AND BILLS/VOUCHERS AS MENTIONED IN PARA 4 ABOVE. THE AO ALLOWED OPPORTUNITY TO THE APPELLANT EITHER TO PROD UCE THE BILL OR CONFIRMATION OR ALSO PRODUCE CERTAIN PERSONS. THE A PPELLANT, HOWEVER, FAILED TO DISCHARGE THE ONUS THAT LIED ON HIM, IN A S MUCH AS THE CONFIRMATION WERE NOT FILED NOR THE DESIRED PERSONS WERE PRODUCED BEFORE THE AO FOR EXAMINATION. IT IS ALSO AN ADMITT ED FACT THAT THE ASSESSEE DID NOT FURNISH THE DETAILS OF SITE WISE PURCHASES AND CONSUMPTION OF RAW MATERIAL, WAGES AND OTHER EXPENS ES. IT WAS IN VIEW OF THESE DISCREPANCIES AND FAILURE OF APPELLAN T TO FURNISH THE DETAILS THAT THE AO CAME TO THE CONCLUSION THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE DID NOT REFLECT TRUE PROFITS. THE M AIN REASON FOR INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT W AS THE NON PRODUCTION OF DETAIL OF CLOSING STOCK AND CLAIM OF EXPENDITURE ON WAGES AT VARIOUS SITES AS WELL AS SEVERAL DISCREPAN CIES IN ACCOUNTS. HENCE, THE AO WAS FULLY JUSTIFIED IN RESORTING TO T HE BEST JUDGMENT ASSESSMENT UNDER SECTION 144 OF THE ACT. THE SAME R EASON APPLIES FOR REJECTION OF BOOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE ACT. THE REJECTION OF BOOKS OF ACCOUNTS AND INVOKING THE PRO VISIONS OF SECTION 145(3) OF THE ACT AS WELL AS 144 OF THE ACT BY THE AO IS WELL JUSTIFIED IN VIEW OF THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF KACHWALA GEMS (288 ITR 10) AND HONBLE ALLAHABAD HI GH COURT IN THE CASE OF BIMAL KUMAR ANANT KUMAR (288 ITR278). T HE ACTION OF AO WITH REGARD TO REJECTION OF BOOKS OF ACCOUNTS UN DER SECTION 145(3) OF THE ACT AND PASSING OF ORDER U/S 144 OF THE ACT IS UPHELD.THE GROUND TAKEN UP BY THE APPELLANT IN THIS REGARD IS DISMISSED. 6.1. THE NEXT GROUND IS REGARDING APPLICATION OF NE T PROFIT RATE OF 13% TO THE GROSS CONTRACT RECEIPTS. THE AO, WHILE A PPLYING THE RATE OF 13% HAS RELIED ON THE CASES OF M/S. J & K BUILDERS AND CONTRACTORS, GURDASPUR AND SHRI SANDEEP KUMAR DHAWAN OF PATHANKO T WHEREIN 7 THE PROFIT WAS SHOWN AT 13% AND 13.2% ON THE CONTRA CT RECEIPTS OF RS.2.32 CRORES AND RS.1.43 CRORES, RESPECTIVELY. IN THE REMAND REPORT, THE AO HAS FURTHER SUPPORTED HIS ACTION BY RELYING ON THE DECISION OF LD. CIT(A) JAMMU HQ AT AMRITSAR IN THE CASE OF M/S. AMARJIT SINGH BAJWA CONTRACTOR WHEREIN THE RATE OF 11% WAS APPLIE D; AND THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S. PRABHAT KUMAR CONTRACTOR, SIRSA (SUPRA) UPHOLDING T HE APPLICATION OF NET PROFIT RATE OF 12% ON THE CONTRACT RECEIPT EXCL UDING THE COST OF MATERIAL SUPPLIED BY THE DEPARTMENT. I HAVE GONE TH E DECISION IN THE CASE OF PRABHAT KUMAR (SUPRA). IN THIS CASE, THE TO TAL CONTRACT RECEIPTS WERE ONLY OF RS.91.65 LACS. THE AO/CIT(A) MADE SEP ARATE ADDITION OF RS.16.48 LACS BY HOLDING THAT CLAIM OF LABOUR PA YABLE OF RS.16.48 WAS NOT GENUINE AND THERE WAS CLEAR ADMISSION IN T HIS REGARD ON BEHALF OF ASSESSEE DURING APPELLATE PROCEEDINGS BEF ORE THE ITAT. THE HONBLE ITAT, CHANDIGARH, IN THESE FACTS CONSIDERED IT APPROPRIATE TO APPLY REASONABLE RATE OF 12%. THE ITAT ALSO RELIED ON ITS EARLIER DECISION IN THE CASE OF M/S. ESS ESS BUILDERS IN IT A NO.707/CHD/97 DATED 16.09.2003 WHICH WAS A CASE OF NON MAINTENANC E OF BOOKS OF ACCOUNTS. HENCE, THE DECISIONS RELIED ON BY THE AO INVOLVES VERY LESS TURNOVER AS COMPARED TO THE APPELLANT. THE ARGUMENT OF THE AO THAT WITH THE INCREASE OF TURNOVER, THE PROFIT MARGIN W OULD ALSO INCREASE BY VIRTUE OF PROPORTIONATELY LESSER ESTABLISHMENT C OST DOES NOT HOLD GOOD AS THIS IS A CASE OF CONTRACTOR WHEREIN THE ES TABLISHMENT COST IS VERY LESS AS COMPARED TO OTHER EXPENSES. IN THE CAS E OF M/S. DALJIT SINGH & BROS. OF PATHANKOT, THE HONBLE ITAT, AMRIT SAR FOR THE BLOCK PERIOD IN ITA NO. 201(ASR)/2002 IN THE ORDER DATED 14.11.2002 UPHELD THE NP RATE OF 8% IN A SEARCH CASE. THE APP ELLANT HAS FURTHER CONTENDED THAT IN THE A.Y. 2005-06, THE PROFIT RAT E OF 2.02% WAS ACCEPTED BY THE AO AS PER ASSESSMENT ORDER DATED 31 .07.2007, A COPY OF WHICH IS FILED. FURTHER, IN THE A.Y. 2007-08 TH E AO HAS FINALIZED THE ASSESSMENT BY ADOPTING THE RATE OF 8% AS PER AS SESSMENT ORDER, A COPY OF WHICH IS ALSO FILED. A PERUSAL OF ORDER FOR A.Y. 2007-08 IN APPELLANTS OWN CASE REVEALS AS UNDER: REFERENCE DISCUSSIONS WITH MY COUNSELS, IT IS HUMB LY SUBMITTED THAT I AM CARRYING ON MY CONSTRUCTION ACT IVITIES AT VARIOUS PLACED SINGLE-HANDEDLY. MY FAMILY IS LIVING AT PATHANKOT. I AM NOT HAVING THE BENEFIT OF ANY PARTN ER OR ANY ASSOCIATED. DUE TO PAUCITY OF TIME, IT IS NOT POSSI BLE TO CONTRADICT YOUR KIND OBSERVATIONS. 8 UNDER THE CIRCUMSTANCES, IT IS REQUESTED THAT THE A SSESSMENT MAY KINDLY BE COMPLETED BY APPLYING RATE OF 8% ( AS ALSO PROVIDED U/S 44AD) ON NET RECEIPTS I.E. GROSS RECEI PTS MINUS MATERIAL SUPPLIED BY CONCERNED DEPARTMENTS, SUBJECT TO DEPRECIATIONS AS PER RECORD & SUBJECT TO NO PENALTY . IT IS THUS, OBVIOUS THAT THE APPELLANT HIMSELF AS A DMITTED THE RATE OF 7% TO BE APPLIED ON CONTRACT RECEIPTS OF RS.8.55 CRORES IN A.Y. 2007-08. K EEPING IN VIEW THE ABOVE FACTS AND LEGAL POSITION, IT WOULD BE FAIR AND APPROPRIATE TO ESTIMATE THE PROFIT BY A PPLYING THE RATE OF 8% IN THIS YEAR ALSO. ACCORDINGLY, THE NET PROFIT O N THE RECEIPTS OF RS.6,20,78,789/- WORKS OUT T RS.49,66,303/-. IN THE REMAND REPORT, THE AO HAS SUBMITTED THAT THE DEPRECIATION OF RS.3,51,4 14/- IN RESPECT OF GHAGWAL AS PER SCHEDULE C HAS BEEN LEFT TO BE ALLOW ED. HENCE, THE TOTAL CLAIM OF DEPRECIATION WORKS OUT TO RS.12,08,9 21/-. AFTER ALLOWING THE ABOVE DEPRECIATION AND INCOME OF RS.7, 26,428/- DECLARE BY THE ASSESSEE IN THE RETURN, THE NET ADDITION WOK S OUT TO RS.30,30,954/- INSTEAD OF RS.64,86,334/- MADE BY TH E AO IN THE ORDER. HENCE, THE ADDITION OF RS.30,30,954/- IS CONFIRMED. THE AO IS DIRECTED TO VERIFY THE CLAIM OF DEPRECIATION OF G HAGWAL AND ALLOW THE ABOVE CLAIM OF DEPRECIATION SUBJECT TO VERIFICATION THAT DEPRECIATION OF GHAGWAL HAS NOT BEEN ALLOWED BY WAY OF RECTIFICATIO N EARLIER. 6. SH. AMRIK CHAND, THE LD. DR, STRONGLY SUPPORTED THE ORDER OF THE A.O. AND ON THE OTHER HAND, SH. SALIL KAPOOR, THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A) AND REIT ERATED THE SUBMISSIONS MADE BEFORE HIM. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE MATERIALS AVAILABLE ON RECORD. THE ONLY DISPUTE IN THIS CASE, RELATES TO RATE OF PROFIT. THE AO HAS APPLIED RATE OF PROFIT AT 13% BEFORE DEP RECIATION. HOWEVER, THE LD. CIT(A) HAS ADOPTED THE PROFIT BY APPLYING RATE OF 8% AFTER ALLOWING 9 DEPRECIATION. IT IS SEEN THAT THE ASSESSEE HIMSELF HAS ADMITTED THAT RATE OF 8% SHOULD BE APPLIED ON CONTRACT RECEIPTS OF RS.8.55 C RORES FOR THE ASSESSMENT YEAR 2007-08. THERE IS NO DISPUTE THAT IN THE ASSES SMENT YEAR 2007-08, THE DEPARTMENT ITSELF HAS ADOPTED RATE OF 8% AS PER AS SESSMENT ORDER FOR THE A.Y. 2007-08. THE LD. CIT(A) HAS ALSO REFERRED TO T HE DECISION OF ITAT, AMRITSAR BENCH, IN THE CASE OF M/S. DALJIT SINGH & BROS OF PATHANKOT, PASSED IN ITA NO.201(ASR)/2002 IN THE ORDER DATED 14 TH NOV., 2002, WHEREIN THE TRIBUNAL UPHELD NET PROFIT RATE OF 8% IN SEARCH CASE. IT IS SEEN THAT IN THE ASSESSMENT YEAR 2005-06 THE PROFIT RAT E OF 2.02% WAS ACCEPTED BY THE A.O. AS PER ASSESSMENT ORDER DATED 31.07.200 7. ADMITTEDLY, IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THE A.O. FRAME D EX-PARTE ASSESSMENT U/S 144 OF THE ACT AND ALSO RELIED ON THE DECISION OF M/S. J & K BUILDERS AND CONTRACTORS, GURDASPUR AND SHRI SANDEEP KUMAR DHAWA N OF PATHANKOT. SH. SALIL KAPOOR, THE LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT M/S. J & K BUILDERS AND CONTRACTORS, GURDASPUR AND SHRI SANDEE P KUMAR DHAWAN HAD NOT CARRIED OUT ANY WORK IN HIMACHAL PRADESH. THE L D. COUNSEL VEHEMENTLY ARGUED THAT THE RECEIPTS OF M/S. J & K BUILDERS AN D CONTRACTORS, GURDASPUR AND SHRI SANDEEP KUMAR DHAWAN WERE MUCH LESS THAN T HE ASSESSEE. IN OUR VIEW, THERE IS MERIT IN THE ABOVE SUBMISSIONS OF T HE LD. COUNSEL FOR THE ASSESSEE THAT THE ABOVE TWO CASES CANNOT BE CONSIDE RED AS COMPARABLE AS IT HAS BEEN HELD BY THE A.O. WE ALSO FIND THAT THE LD . CIT(A) HAS CORRECTLY 10 DISTINGUISHED THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S. PRABHAT KUMAR CONTRACTOR, SIRSA, IN ITR 293 OF 2008 DATED 14.11.2008, WHEREIN THE HONBLE HIGH COURT UP HELD THE APPLICATION OF NET PROFIT RATE OF 12% ON THE CONTRACT RECEIPT EXCL UDING THE COST OF MATERIAL SUPPLIED BY THE DEPARTMENT. THE LD. CIT(A) HAS CORR ECTLY OBSERVED IN THAT CASE THE TOTAL CONTRACT RECEIPTS WERE ONLY OF RS.9 1.65 LACS. THE AO MADE SEPARATE ADDITION OF RS.16.48 LACS BY HOLDING THAT CLAIM OF LABOUR PAYABLE OF RS.16.48 LACS WAS NOT GENUINE AND THERE WAS CLEA R ADMISSION ON BEHALF OF THE ASSESSEE DURING APPELLATE PROCEEDINGS BEFORE T HE TRIBUNAL. IN THAT CASE, THE TRIBUNAL CONSIDERED IT APPROPRIATE TO APPLY PRO FIT RATE OF 12%. IN OUR VIEW THE DECISION OF THE HONBLE PUNJAB & HARYANA H IGH COURT RELIED UPON BY THE DEPARTMENT (SUPRA) IS DISTINGUISHABLE ON FAC TS. WE ALSO FIND THAT WHILE APPLYING RATE OF 13%, THE A.O. RELIED ON ONE LOOSE PAPER WRITTEN IN THE HANDWRITING OF SH. GOPAL SINGH EX-ACCOUNTANT OF THE ASSESSEE. IN THE SAID PAPER, BITUMEN EXPENSES ARE NOT MENTIONED AND EXPENSES PAYABLE ARE NOT MENTIONED. CONSIDERING THE ENTIRE FACTS AND CIR CUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A), HAS CORRECTLY APPLIED PROFIT RATE OF 8% AS AGAINST 13% APPLIED BY THE AO. IN OUR VIEW, THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE AND, THEREFORE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE CIT(A). ACCORDIN GLY, THE APPEAL OF THE REVENUE IS DISMISSED. 11 8. C.O. NO.13(ASR)/2010 AT THE TIME OF HEARING, SH. SALIL KAPOOR, THE LD. COUNSEL FOR THE ASSESSEE, DID NOT PRESS FOR THE GROUNDS RAISED IN T HE C.O. ACCORDINGLY, WE DISMISS THE C.O. AS NOT PRESSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND C.O. BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13TH DECEMBER, 2011. SD/- SD/- (D.K.SRIVASTAVA) (H.L. KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 13TH DECEMBER, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE: SH. VIDYA SAGAR SAINI, GOVT. CONTRACT OR, PATHANKOT. 2. THE DCIT CIRCLE, PATHANKOT. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.