M/s. Gufran Contractor, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 2507/DEL/2014

• Counselvise Citation: 250720114 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 01-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P D TAN EJA
• Assessee Lawyers: PREM PRAKASH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2: NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER I.T.A .NO. 2507/DEL/2014 (ASSESSMENT YEAR- 2010-11) GUFRAN CONTRACTOR, C/O PREM PRAKASH, ADVOCATES, 183/2, NORTH CIVIL LINES, MUZAFFARNAGAR. AAGFG3613B VS ITO, WARD 2(1), MUZAFFARNAGAR. APPELLANT BY SH. PREM PRAKASH, ADV. & SH. ASHIS H AGGARWAL, ADV. RESPONDENT BY SH. P.D. TANEJA, SR. DR DATE OF HEARING 01/07/2015 DATE OF PRONOUNCEMENT 30/07/2015 O R D E R THE ASSESSEE HAS IMPUGNED THE FIRST APPELLATE ORDE R ON THE SOLE GROUND THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE NET PROFIT RATE OF 11% WITHOUT ANY BASIS. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE ASSESSEE, AN INDIVIDUAL IS DERIVING INCOME F ROM CIVIL CONTRACT WORK. THE AO NOTED THAT THE ASSESSEE HAD DEBITED VARIOUS EXPENSE S LIKE AUDIT FEE, FREIGHT, MISCELLANEOUS EXPENSES, SALARY, TELEPHONE EXPENSES AND TRAVELLING EXPENSES. THE AO ASKED THE ASSESSEE TO PRODUCE COMPLETE BOOKS OF ACC OUNT ALONG WITH SUPPORTING BILLS AND VOUCHERS. THE ASSESSEE ADMITTED THAT NO BILLS AND VOUCHERS HAVE BEEN MAINTAINED IN RESPECT OF THE CLAIMED EXPENSES. THE AO ACCORDINGL Y HELD THAT THE EXPENSES OF RS. 4,82,830/- WERE NOT VERIFIABLE AND REJECTED THE BOO KS OF ACCOUNT. HE ESTIMATED THE PROFIT BY APPLYING NET PROFIT @ 11% ON TOTAL RECEIPTS DECL ARED AT RS. 70,96,312/- RESULTING IN THE ADDITION OF RS. 2,18,564/-. THE LD. CIT(A) HAS UPHELD THE SAME. 4. BEFORE THE TRIBUNAL THE CONTENTION OF THE ASSESS EE REMIND THAT THERE WAS NO BASIS FOR ESTIMATING THE PROFIT BY APPLYING NET PROFIT RA TE OF 11% OF THE TOTAL RECEIPTS ESPECIALLY ITA NO. 2507/D/2014 GUFRAN CONTRACTOR 2 WHEN THE ASSESSEE HAD SHOWN NET PROFIT RATE OF 7.91 % DURING THE YEAR AND IN THE A.Y. 2008-09 THE AO HAD APPLIED THE NET PROFIT RATE OF 7 .5% IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT. THE LD. AR SUBMITTED THAT IN TH E WORK OF CIVIL CONTRACTS THERE ARE NUMBER OF DECISIONS OF THE TRIBUNAL IN WHICH NET PR OFIT RATE OF 8% AND LESS HAS BEEN APPLIED. THE LD. SR. DR, ON THE OTHER HAND, TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. 5. CONSIDERING THE ABOVE SUBMISSION, I FULLY AGREE WITH CONTENTION OF THE LD. AR THAT EVEN FOR ESTIMATION OF PROFIT BY APPLYING A PARTICU LAR RATE SOME BASIS LIKE COMPARABLE CASES IS REQUIRED AND ASSESSEES OWN CASE IS A BEST COMPARABLE. THE AO HAS NOT ASSIGNED ANY BASIS FOR APPLICATION OF NP RATE OF 11 % ON THE DECLARED RECEIPTS. HENCE, THE SAME CANNOT BE SUSTAINED. THE PAST RESULT OF T HE ASSESSEE IS AVAILABLE, WHICH IS OF THE ASSESSMENT YEAR 2008-09 WHEN THE AO HIMSELF HAD APP LIED NET PROFIT RATE OF 7.5%. KEEPING IN MIND THE SAID RESULT AND THAT THE ASSESS EE HAS NOT MAINTAINED BILLS AND VOUCHERS IN SUPPORT OF THE CLAIMED EXPENSES DURING THE YEAR, I AM OF THE VIEW THAT APPLICATION OF NET PROFIT RATE AT 8% OF THE DECLARE D RECEIPTS WILL BE REASONABLE AND MEET THE END OF JUSTICE. IT IS ORDERED ACCORDINGLY. TH E GROUND IS THUS, PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/07/ 2015 SD/- (I.C. SUDHIR) JUDICIAL MEMBER DATED: 30/07/2015 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO. 2507/D/2014 GUFRAN CONTRACTOR 3 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 22.07.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 23.07. 2015, 30.7.15 3. DRAFT PLACED BEFORE THE SECOND MEMBER 30.07.2015 4. DRAFT APPROVED BY THE SECOND MEMBER 30.07.2015 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 30.07 .2015 6. DATE OF PRONOUNCEMENT OF ORDER 30.07.2015 7. DATE OF FILE SENT TO THE BENCH CLERK 31.07.2015 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER