Shri Haridas Dhondiram Katkar, RAJKOT-GUJARAT V. The Income Tax Officer, Ward 4, Surendranagar

ITA 25/RJT/2011

• Counselvise Citation: 2524914 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 02-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT B JHAVERI DR
• Assessee Lawyers: DR ADHIA
• Keywords: Bonafide mistake
• Section: 145; 44AD; 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI B. R. JAIN, A M ITA NO. 25/RJT/2011 / ASSESSMENT YEAR : 2007-08 HARIDAS DHONDIRAM KATKAR C/O. VAMAN PRESTRESSING CO. PVT. LTD., NR. DIGSAR RAILWAY STATION, VIL. GODAVARI, TAL. MULI, SURENDRANAGAR PAN : AHBPK 5625 P ( / APPELLANT) THE I.T.O., WARD 4 SURENDRANAGAR / RESPONDENT ! ' #$ / ASSESSEE BY SHRI D. R. ADHIA, AR % ! ' #$ / REVENUE BY DR. JAYANT B. JHAVERI, DR # & ' ! ( / DATE OF HEARING 08.01.2014 ) ! ( / DATE OF PRONOUNCEMENT 07.03.2014 / ORDER .. , / T. K. SHARMA, J. M.: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 06.12.2010 OF LD. CIT(A) -XVI, AHMEDABAD FOR THE ASSESSMENT YEAR 2007-08. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL, DOING BUSINESS OF LABOUR CONTRACTOR IN HIS PROPRIETORSHIP CONCERN NAM ELY M/S. MAHESH FABRICATION. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN O F INCOME ON 31.10.2007 DECLARING TOTAL INCOME AT RS.1,63,920/-. THE ASSESSING OFFICE R FRAMED THE ASSESSMENT U/S 143(3) ON 31.12.2009, WHEREIN HE, INTER-ALIA, MADE THE FOL LOWING ADDITIONS/DISALLOWANCES:- (I) ADDITION OF RS.4,76,217/- ON ACCOUNT OF DIFFERENCE IN CONTRACT RECEIPTS. ACCORDING TO THE ASSESSING OFFICER, IN THE BOOKS OF ACCOUNTS, THE ASSESSEE HAS SHOWN CONTRACT RECEIPT OF RS.36,95,462/- AS AGA INST CONTRACT RECEIPTS OF RS.41,71,679/- SHOWN IN FORM NO.16A (TDS CERTIFICAT E). THE ASSESSEE EXPLAINED THIS DIFFERENCE VIDE LETTER DATED 29.12.2 009 AS UNDER:- REFERRING TO YOUR QUARIES RAISING DIFFERENCE BETWE EN TOTAL RECEIPT AS SHOWN IN TDS CERTIFICATE AND TOTAL RECEIPT TAKEN AS CONTRACT RECEIPTS WE CLARIFY THAT IN TDS CERTIFICATE RECEIPT SHOWN ARE T DS ON PAYMENT BASIS THEREFORE IS ALSO INCLUDE TDS ON ADVANCE PAYMENT. IN THIS REGARD WE ARE ENCLOSING COPY OF CONTRACT RE CEIPT ACCOUNT / LABOUR PAYMENT RECEIPT ACCOUNT ALONGWITH CONTRA ACCOUNT OF VAMAN PRESTRESSING 25-RJT-2011 HARIDAS DHONDIRAM KATKAR 2 CO. PVT. LTD., ALONGWITH ITS CONFIRMATION ALSO COP Y OF BANK ACCOUNT FROM YOU CAN FIND PAYMENT RECEIVED TDS THEREON AND RECEI PT SHOWN ARE DULY TALLIED IN CONTRACT RECEIPT SHOWN IN PROFIT & LOSS ACCOUNT, WHICH IS ALSO SHOWN TO YOU DURING HEARING AND AGREED BY YOU. THER EFORE, QUESTION OF ADDING DIFFERENCE BETWEEN TOTAL AMOUNT PAID/CREDITE D IN TDS CERTIFICATE ALWAYS BE HIGHER DUE TO ADVANCE PAYMENT AS AGAINST ACTUAL WORK DONE AND BILL RAISED THEREFORE THE DIFFERENCE CANNOT BE ADDED TO THE INCOME AS DISCUSSED. THERE IS A DIFFERENCE OF RS.89,398/- BILL RAISED AN D RECEIPT SHOWN IN CONTRACT RECEIPT WHICH IS DUE TO CREDIT NOTE TO EXT ENT OF TDS GIVEN TO THE CLIENT THEREFORE SUCH LESS CREDIT HAS BEEN SHOWN. THE ASSESSING OFFICER REJECTED THE AFORESAID EXPLAN ATION OF THE ASSESSEE AND SUBSEQUENTLY, HE TREATED THE DIFFERENCE OF RS.4,76, 217/- AS UNEXPLAINED AND ADDED BACK THE SAME TO THE TOTAL INCOME OF THE ASSE SSEE. (II) ADDITION ON ACCOUNT OF UNACCOUNTED CONTRACT RE CEIPT OF RS.22,35,140/-. ON VERIFICATION OF MANUFACTURING A/C., THE ASSESSIN G OFFICER FOUND THAT THE ASSESSEE HAS NOT SHOWN CONTRACT RECEIPTS OF RS.22,3 5,140/- ALLEGEDLY TO BE RECEIVED FROM CCI PRESTRESSTIES PVT LTD DURING THE FY 2006-07. (III) DISALLOWANCE OF RS.52,000/- ON ACCOUNT OF KIT CHEN EXPENSES, RS.80,000/- ON ACCOUNT OF LABOUR EXPENSES, RS.20,000/- ON ACCOU NT OF TRAVELLING EXPENSES AND RS.16,000/- ON ACCOUNT OF VEHICLE EXPE NSES. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER DISA LLOWED RS.52,000/- OUT OF KITCHEN EXPENSES, RS.80,000/- OUT OF LABOUR EXPENSE S, RS.20,000/- OUT OF TRAVELLING EXPENSES AND RS.16,000/- OUT OF VEHICLE EXPENSES. 2.1 ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A ) CONFIRMED THE ADDITION OF RS.2,00,000/- OUT OF TOTAL ADDITION OF RS.4,76,217/ - WHICH WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN CONTRACT RECEIP TS FOR THE DETAILED REASONING GIVEN IN PARAGRAPH 2.3 OF THE IMPUGNED ORDER, WHICH READS AS UNDER:- 2.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE A PPELLANT AND OBSERVATION OF THE AO. AS REGARDS LEGAL POSITION IS CONCERNED, I AGREE WITH THE APPELLANT THAT ADVANCES CANNOT BE TAXED. BUT IN THE PRESENT CASE T HE PERUSAL OF THE ACCOUNTS SHOWS THAT THERE ARE NOT ADVANCES BY ANY STRETCH OF IMAGINATION. THE APPELLANT HAS ALSO NOT LEAD ANY EVIDENCE TO SHOW THAT THESE A RE ADVANCES AND HAVE BEEN OFFERED IN THE SUBSEQUENT YEAR. DURING THE APPELLAT E PROCEEDING THE APPELLANT HAS CHANGED HIS STAND AND HAS STATED THAT DIFFERENC E BETWEEN THE ACCOUNT IS DUE TO WRONG AMOUNT MENTIONED IN TDS CERTIFICATES. FOR JUNE 2006, THE ACTUAL BILL IS RS.197352/- WHEREAS IN THE CERTIFICATE THE AMOUNT M ENTIONED IS RS.200992/-. FOR ANOTHER ENTRY OF JUNE 2006 THE ACTUAL BILL RAISED I S RS.156125/- WHEREAS THE CERTIFICATE SHOWS RS.161085/-. FOR MARCH 2007, THE ACTUAL BILL IS RS.128184/- AND THE TDS CERTIFICATE SHOWS RS.306403/- THE DIFFERENC E OF THESE IS RS.186819 AND RS.2 LAKHS WAS RECEIVED AS ADVANCE. THE APPELLANT H AS NOT GIVEN ANY EVIDENCE 25-RJT-2011 HARIDAS DHONDIRAM KATKAR 3 OR REASON TO SHOW WHY THE BILL AMOUNT IS DIFFERENT AND THE TDS CERTIFICATE AMOUNT IS MORE. THE ARGUMENT OF THE APPELLANT THAT RS.2 LA KH IS ADVANCE RECEIVED IS ACCEPTABLE AND THE SAME IS DELETED. HOWEVER, IN RES PECT OF THE DIFFERENCE MENTIONED BY THE APPELLANT NO EVIDENCE HAS BEEN GIV EN AND HENCE THE BALANCE ADDITION IS CONFIRMED. HENCE OUT OF THE ADDITION OF RS.476217. THE ASSESSEE GETS A RELIEF OF RS.2 LAKH AND BALANCE ADDITION OF RS.27 6217 IS CONFIRMED. 2.2 IN RESPECT OF ADDITION OF RS.22,35,140/- ON ACC OUNT OF UNACCOUNTED CONTRACT RECEIPT, THE ASSESSEE CONTENDED BEFORE THE LD. CIT( A) THAT THIS AMOUNT WAS SHOWN IN THE FINANCIAL YEAR 2007-08 RELEVANT TO ASSESSMENT Y EAR 2008-09. THE LD. CIT(A), IN THE IMPUGNED ORDER, ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO VERIFY THE INCOME-TAX RETURN FOR THE ASSESSMENT YEAR 2008-09 AND IF THIS AMOUNT IS SHOWN BY THE ASSESSEE IN ASSESSMENT YEAR 2008-09, THEN THE ADDITION MADE IN THE ASSESSMENT YEAR UNDER APPEAL SHOULD BE DELETED, FAILING WHICH THE ENTIRE ADDITIO N IS CONFIRMED. 2.3 IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.52,000/- ON ACCOUNT OF KITCHEN EXPENSES AS THE ASSESSEE MADE TH ESE PAYMENTS ON SELF PREPARED VOUCHERS. 2.4 ADDITION OF RS.80,000/- OUT OF LABOUR EXPENSES ALSO CONFIRMED SINCE THE ASSESSEE HAS NOT DENIED THE STATEMENT OF THE ASSESS ING OFFICER BEFORE THE LD. CIT(A) THAT SOME OF THE ENTRIES IN THE REGISTER DID NOT HA VE SIGNATURE AND FULL NAME. 2.5 FINALLY, THE LD. CIT(A) ALSO CONFIRMED THE DISA LLOWANCE OF RS.20,000/- OUT OF TRAVELLING EXPENSES AND RS.16,000/- OUT OF VEHICLE EXPENSES OBSERVING THAT PERSONAL USE OF THE VEHICLES CANNOT BE DENIED. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSESS EE IS NOW IN APPEAL BEFORE THIS TRIBUNAL, ON THE FOLLOWING GROUNDS:- 1.1 THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.4,76,217/- TREATING THE SAME AS CONTRACT RECEIPT . THE ADDITION NEEDS DELETION. 1.2 THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS I N DISBELIEVING THE EXPLANATION GIVEN BY THE ASSESSEE AND WITHOUT VERIF YING THE FACTUAL POSITION, HAS ERRED IN CONFIRMING AN ADDITION OF RS.4,76,217/-. T HE SAME NEEDS DELETION. 1.3 THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS I N CONFIRMING THE VIEW OF THE LD. A.O. RELATING TO MERCANTILE ACCOUNTING SYSTEM A ND APPLICATION OF PROVISIONS OF SEC. 145 AND BASED ON SUCH ERRONEOUS AND IRRELEVANT FACTOR HAS ERRED IN CONFIRMING ADDITION OF RS.4,76,217/-. THE SAME NEED S DELETION. 1.4 WITHOUT PREJUDICE, THE LD. C.I.T.(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.4,76,217/- INSTEAD OF TAXING THE SAID AMOUNT 25-RJT-2011 HARIDAS DHONDIRAM KATKAR 4 APPLYING RATIO OF THE BOOK RESULT SHOWN AND ACCEPTE D BY THE LD. A.O. THE ADDITION NEEDS SUITABLE REDUCTION. 1.5 WITHOUT PREJUDICE, THE LD. C.I.T.(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.4,76,217/- WITHOUT GIV ING DEDUCTION OF EXPENSES THERE FROM. THE ADDITION NEEDS SUITABLE REDUCTION. 1.6. WITHOUT PREJUDICE, THE LD. C.I.T.(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.4,76,217/- IN FULL WIT HOUT TAXING THE SAME AT THE HIGHEST PERCENTAGE AS PRESCRIBED UNDER THE STATUTES , I.E. 8% BEING CONTRACT RECEIPTS. THE ADDITION NEEDS SUITABLE REDUCTION. 2.1 THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS I N CONFIRMING AN ADDITION OF RS.22,35,140 TREATING THE SAME AS CONTRACT RECEIPT. THE ADDITION NEEDS DELETION. 2.2 THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS I N DISBELIEVING THE EXPLANATION GIVEN BY THE ASSESSEE AND WITHOUT VERIF YING THE FACTUAL POSITION, HAS ERRED IN CONFIRMING AN ADDITION OF RS.22,35,140/-. THE SAME NEEDS DELETION. 2.3 THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS I N CONFIRMING THE VIEW OF THE LD. A.O. RELATING TO MERCANTILE ACCOUNTING SYSTEM A ND APPLICATION OF PROVISIONS OF SEC. 145 AND BASED ON SUCH ERRONEOUS AND IRRELEVANT FACTOR HAS ERRED IN CONFIRMING ADDITION OF RS.22,35,140/-. THE SAME NEE DS DELETION. 2.4 WITHOUT PREJUDICE, THE LD. C.I.T.(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.22,35,140/- INSTEAD OF TAXING THE SAID AMOUNT APPLYING RATIO OF THE BOOK RESULT SHOWN AND ACCEPTE D BY THE LD. A.O. THE ADDITION NEEDS SUITABLE REDUCTION. 2.5 WITHOUT PREJUDICE, THE LD. C.I.T.(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.22,35,140/- WITHOUT GI VING DEDUCTION OF EXPENSES THERE FROM. THE ADDITION NEEDS SUITABLE REDUCTION. 2.6. WITHOUT PREJUDICE, THE LD. C.I.T.(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.22,35,140/- IN FULL WI THOUT TAXING THE SAME AT THE HIGHEST PERCENTAGE AS PRESCRIBED UNDER THE STATUTES , I.E. 8% BEING CONTRACT RECEIPTS. THE ADDITION NEEDS SUITABLE REDUCTION. 3.L. THE LD. CLT. (A) HAS ERRED IN LAW AND FACTS I N CONFIRMING AN ADDITION OF RS. 52.000/- MADE TOWARDS KITCHEN EXPENSES. 3.2. WITHOUT PREJUDICE. THE LD. C.I.T. (A) HAS ERR ED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.52,000/- MADE TOWARDS KITCHEN EXPENSES WHICH BEING EXCESSIVE. NEEDS SUITABLE REDUCTION. 4.1. THE LD. C.IT. (A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS.80,000/- MADE TOWARDS LABOUR EXPENSES. 4.2. WITHOUT PREJUDICE. THE LD. C.1.T. (A) HAS ERR ED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS. 80,000/- MADE TOWARDS LABOUR EXPENSES WHICH BEING EXCESSIVE, NEEDS SUITABLE REDUCTION. 5.1. THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS. 20,000/- MADE TOWARDS TRAVELING EXPENSES. 5.2. WITHOUT PREJUDICE, THE LD. C.I.T. (A) HAS ERRE D IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS. 20,000/- MADE TOWARDS TRAVELING EXPENSES WHICH BEING EXCESSIVE, NEEDS SUITABLE REDUCTION. 6.1. THE LD. C.I.T. (A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ALL ADDITION OF RS. 16,000/- MADE TOWARDS VEHICLE EXPENSES. 25-RJT-2011 HARIDAS DHONDIRAM KATKAR 5 6.2. WITHOUT PREJUDICE. THE LD. C.I.T. (A) HAS ERR ED IN LAW AND FACTS IN CONFIRMING AN ADDITION OF RS. 16,000/- MADE TOWARDS VEHICLE EXPENSES WHICH BEING EXCESSIVE, NEEDS SUITABLE REDUCTION. 7.1. TAKING INTO CONSIDERATION, THE LEGAL, STATUTOR Y AND FACTUAL ASPECTS, NO ADDITION AS MADE IN RESPECT OF GROUNDS NO. 1 TO 6 A S MENTIONED ABOVE OUGHT TO HAVE BEEN MADE. THE ADDITIONS NEED DELETION. 7.2. TAKING INTO CONSIDERATION, THE LEGAL, STATUTOR Y AND FACTUAL ASPECTS, NO ADDITION AS MADE IN RESPECT OF GROUNDS NO. 1 TO 6 A S MENTIONED ABOVE OUGHT TO HAVE BEEN MADE TO AN EXCESSIVE RATE. THE ADDITIONS NEED SUITABLE REDUCTION. 8. WITHOUT PREJUDICE, THE ASSESSMENT MADE BEING BA D IN LAW NEEDS ANNULMENT. 9. WITHOUT PREJUDICE, NO PROPER AND REASONABLE OPP ORTUNITIES WERE PROVIDED BY THE LD. A.O. THE ASSESSMENT NEEDS ANNULMENT. 10. WITHOUT PREJUDICE, NO PROPER AND REASONABLE OP PORTUNITIES WERE PROVIDED BY THE LD. CI.T.(A). THE ASSESSMENT NEEDS ANNULMENT . 11. THE APPELLANT CRAVES LEAVE TO ADD / ALTER / AM END AND / OR SUBSTITUTE ANY / ALL GROUNDS OF APPEAL BEFORE THE ACTUAL HEARING TAK ES PLACE. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI D.R. ADHIA, AR, APPEARED AND, IN RESPECT OF GROUND NO.1, POINTED OU T THAT THE ADDITION TO THE TUNE OF RS.2,76,217/- OUT OF TOTAL ADDITION OF RS.4,76,217/ - CONFIRMED BY THE LD. CIT(A) IN THE IMPUGNED ORDER BE TAXED AT THE RATE OF GP DECLARED AS PER THE DECISION OF ITAT, CUTTACK BENCH IN THE CASE OF R.R. CARRYING CORPORAT ION V. ACIT, REPORTED IN 30 DTR 569. 3.1 AS AGAINST THIS, LD. DEPARTMENTAL REPRESENTATIV E POINTED OUT THAT THIS ENTIRE RECEIPT IS TAXABLE AS THE EXPENSES INCURRED FOR EAR NING THIS INCOME ARE ALREADY DEBITED TO THE PROFIT & LOSS ACCOUNT. 3.2 WE FOUND CONSIDERABLE FORCE IN THE SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTATIVE. IT IS PERTINENT TO NOTE THAT BEFORE THE LD. CIT(A) THE FIGURES ARE RECONCILED TO CERTAIN EXTENT AND ACCORDINGLY RELIEF HAS BEEN ALLOWED. ADMITTEDLY, THE ASSESSEE FAILED TO RECONCILE THE FIGURES TO THE EXT ENT OF RS.2,76,217/-; THEREFORE, THIS ADDITION WAS RIGHTLY CONFIRMED BY THE LD. CIT(A). G ROUND NO.1 IS REJECTED. 4. WITH REGARD TO GROUND NO.2, THE LD. AUTHORIZED R EPRESENTATIVE FOR THE ASSESSEE PRODUCED A COPY OF ORDER DATED 21.2.2011 OF ITO GIV ING APPEAL EFFECT TO THE ORDER OF LD. CIT(A) AND FAIRLY ADMITTED THAT CONTRACT RECEIPT OF RS.22,35,140/- WAS NEITHER DISCLOSED 25-RJT-2011 HARIDAS DHONDIRAM KATKAR 6 IN THE ASSESSMENT YEAR 2007-08 NOR IN THE ASSESSMEN T YEAR 2008-09. ON THIS CONTRACT RECEIPT, THERE WAS TDS DEDUCTED OF RS.50,157/- WHIC H WAS ALSO NEITHER CLAIMED IN THE ASSESSMENT YEAR UNDER APPEAL NOR IN THE ASSESSMENT YEAR 2008-09. HE FURTHER SUBMITTED THAT THIS AMOUNT WAS CREDITED IN SOME OTH ER ACCOUNT AND EXPENSES FOR CARRYING OUT THESE CONTRACTS ARE ALSO NOT CLAIMED I N THE REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. HE ACCORDINGLY SUGGEST ED THAT FOLLOWING THE DECISION OF ITAT, CUTTACK BENCH IN THE CASE OF R.R. CARRYING CO RPORATION V. ACIT (SUPRA), THE AMOUNT BE TAXED EITHER AT THE RATE OF GP DECLARED O R, AT THE MOST, AT THE RATE OF 8%, TAKING GUIDANCE FROM THE PROVISIONS CONTAINED IN SE CTION 44AD OF INCOME-TAX ACT AS THE ASSESSEE ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCT ION OR SUPPLY OF LABOUR FOR CIVIL CONSTRUCTION AND PRESUMPTIVE PROFIT FROM SUCH BUSIN ESS IS ALSO APPLICABLE AS HELD BY THE HONBLE ORISSA HIGH COURT IN THE CASE OF MANOHAR RA M CHANDRA PATIL VS UNION OF INDIA (UOI) AND ORS, 260 ITR 87 (ORISSA). HE ACCORDINGLY POINTED OUT THAT KEEPING IN VIEW OF THESE CONSPICUOUS FACTS, THIS UNRECORDED RECEIPT BE TAXED AT THE RATE OF 8% AND CREDIT OF TDS AMOUNTING TO RS.50,157/- BE ALLOWED AS THIS WAS NEITHER CLAIMED IN THE CURRENT ASSESSMENT YEAR NOR IN THE ASSESSMENT YEAR 2008-09. THIS IS ALSO EVIDENT FROM THE ORDER DATED 21.02.2011 OF ITO GIVING APPEAL EFFECT TO THE CIT(A)S ORDER WHICH IS PLACED ON RECORD. 4.1 DR. JAYANT B. JHAVERI, DR, OBJECTED THE AFORESA ID PRAYER ON THE GROUND THAT THIS PLEA WAS NOT RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A); THEREFORE, NOW THIS PLEA CANNOT BE ADMITTED. 4.2 IN REJOINDER, LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT THIS WAS DUE TO BONAFIDE MISTAKE. WHEN INCOME IS TA XED, THE ASSESSING OFFICER HAS NO OPTION BUT TO ALLOW THE CREDIT OF TDS. HE ACCORDING LY REITERATED THAT THIS INCOME BE TAXED BY APPLYING APPROPRIATE NET PROFIT RATE AND THE ASS ESSING OFFICER BE DIRECTED TO ALLOW THE CREDIT OF TDS OF RS.50,157/-, AS INFORMATION TO THI S EFFECT WAS COLLECTED BY THE ASSESSING OFFICER HIMSELF THROUGH AIR AS MENTIONED BY THE ASSESSING OFFICER IN PARAGRAPH 4 OF THE ASSESSMENT ORDER. 25-RJT-2011 HARIDAS DHONDIRAM KATKAR 7 4.3 RIVAL SUBMISSIONS WERE CONSIDERED. THE ITAT, C UTTACK BENCH IN THE CASE OF R.R. CARRYING CORPORATION V. ACIT (SUPRA), FOLLOWIN G THE DECISIONS OF CIT V. PRESIDETN INDUSTRIES, 158 CTR 372 (GUJ) AND CIT V. BALCHAND A JIT KUMAR, 186 CTR 419 (MP), HELD THAT IN CASE OF DIFFERENCE BETWEEN GROSS RECEIPTS A S SHOWN IN THE ASSESSEES BOOKS AND AS PER TDS CERTIFICATE, ADDITION COULD ONLY BE MADE IN RESPECT OF PROFITS EMBEDDED THEREIN. STRICTLY SPEAKING, SECTION 44AD IS NOT APP LICABLE BUT THERE IS NOTHING IN LAW WHICH PREVENTS THE ASSESSING OFFICER, IN AN APPROPR IATE CASE, IN TAXING THE CONTRACT RECEIPT AT THE RATE OF 8% TAKING INSPIRATION FROM T HE PROVISIONS CONTAINED IN SECTION 44AD. WE ACCORDINGLY HELD THAT ENTIRE RECEIPT OF R S.22,35,140/- IS NOT TAXABLE AND ONLY NET PROFIT WHICH AT THE MOST AT 8% IS TAXABLE. WE A CCORDINGLY DIRECT THE ASSESSING OFFICER TO TAX RS.1,78,811/- BEING 8% OF RS.22,35,1 40/- AND ALSO ALLOW THE CREDIT OF TDS OF RS.50,157/- WHICH WAS DEDUCTED BY CCI PRESTRESST IES PVT. LTD. GROUND NO.2 OF ASSESSEES APPEAL IS PARTLY ALLOWED. DISALLOWANCE OF RS.52,000/- OUT OF KITCHEN EXPENSES :- 5. IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.52,000/- OUT OF KITCHEN EXPENSES SOLELY ON THE GROUND THAT A FEW VO UCHERS ARE INTERNAL VOUCHERS. FOR KITCHEN VOUCHERS, IT IS NOT POSSIBLE TO OBTAIN PROP ER VOUCHER ALL THE TIME. THIS ADDITION WAS MADE ON DOUBT AND SUSPICION; THEREFORE, THE ADD ITION OF RS.52,000/- IS DELETED. GROUND NO.3 OF ASSESSEES APPEAL IS ALLOWED. DISALLOWANCE OF RS.80,000/- OUT OF LABOUR EXPENSES: - 6. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DI SALLOWED RS.80,000/- OUT OF LABOUR EXPENSES ON THE GROUND THAT ON THE REGISTER OF PAYMENTS TO DAILY WAGES SOME OF THE ENTRIES ARE WITHOUT SIGNATURES OF THE CONCERNED PERSONS AND IN SOME OF THE ENTRIES THE NAME AND FULL ADDRESS ARE NOT GIVEN. IN OUR OPI NION, IT IS NOT POSSIBLE TO GIVE ADDRESS OF ALL THE LABOURERS. THE ASSESSEE IS A LABOUR SUP PLIER AND KEEPING IN VIEW THE NUMBER OF LABOURERS SUPPLIES SOME DISCREPANCY IN MAINTAINI NG THE RECORD CANNOT BE RULED OUT. THIS ALONE CANNOT BE A GROUND FOR MAKING THE DISALL OWANCE WHEN THERE IS NO VERIFICATION FROM THE CONCERNED LABOUR WAS MADE BY THE ASSESSING OFFICER. THUS, WE ARE OF THE VIEW THAT THIS AD-HOC DISALLOWANCE OF RS.80,000/- O UT OF LABOUR EXPENSES IS MADE PURELY ON DOUBT AND SUSPICION; THEREFORE, THE SAME IS DELE TED. GROUND NO. 4 IS ALLOWED. 25-RJT-2011 HARIDAS DHONDIRAM KATKAR 8 DISALLOWANCE OF RS.20,000/- OUT OF TRAVELLING EXPEN SES AND RS.16,000/- OUT OF VEHICLE EXPENSES:- 7 THE DISALLOWANCE OF RS.20,000/- OUT OF TRAVELLING EXPENSES AND RS.16,000/- OUT OF VEHICLE EXPENSES IS FAIR AND REASONABLE. WE, THE REFORE, DECLINE TO INTERFERE. GROUNDS NO.5 AND 6 ARE REJECTED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 9. SINCE ONE OF US (THE AM) IS NOT AVAILABLE AT RAJ KOT, THIS ORDER SHALL BE DEEMED TO HAVE BEEN PRONOUNCED ON THE DATE ON WHICH IT IS NOT IFIED ON THE NOTICE BOARD OF RAJKOT BENCH IN TERMS OF RULE 34 OF THE INCOME-TAX (APPELL ATE TRIBUNAL) RULES. SD/- SD/- (B. R. JAIN) (T. K. SHARM A) $( #*% / ACCOUNTANT MEMBER #*% /JUDICIAL MEMBER *$+ ,*-/ ORDER DATE 07.03.2014 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- HARIDAS DHONDIRAM KATKAR, C/O. VAMAN PRESTRESSING CO. PVT. LTD., NR. DIGSAR RAILWAY STATION, VIL. GODAVARI, TAL. MULI, SURENDRANAGAR 2. /RESPONDENT- THE I.T.O., WARD 4, SURENDRANAGAR 3. #-2- & 3 / CIT-V, AHMEDABAD 4. & 3 - / CIT(A)-XVI, AHMEDABAD 5 . 678 , , / DR, ITAT, RAJKOT 6 . 89 :; / GUARD FILE. *$+ #$ / BY ORDER , PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.