ACIT, Muzaffarpur V. M/s Rishi Builders (India) Pvt. Limited, Motihari

ITA 253/PAT/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9627 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 16-12-2013
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Assessee Lawyers: SUPRIYA BISWAS DR SHRI

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH:P ATNA BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 253/PAT/2013 ASSESSMENT YEAR:2009-10 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, MUZAFFARPUR. / V/S . RISHI BUILDERS (INDIA) PVT. LTD. SRI KRISHNA NAGAR, MOTIHARI PAN: AADCR4366C /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SUPRIYA BISWAS, DR /BY RESPONDENT SHRI S. K. NARAYAN, ADVOCATE /DATE OF HEARING 07-04-2017 /DATE OF PRONOUNCEMENT 12-04-2017 /O R D E R PER BENCH: THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF CIT(A)-1, PATNA DATED 17.09.2013 FOR AY 2009-10. 2. THE ONLY GROUND THAT HAS BEEN RAISED BY THE REVE NUE IS AGAINST THE PARTIAL RELIEF GIVEN BY THE LD. CIT(A) OUT OF DISALLOWANCE OF MATERIAL P URCHASE ACCOUNT. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE I S A CIVIL CONTRACTOR AND MAINLY EXECUTED THE CONTRACT WORK FOR NHPC AND SOME WORK FOR RCD RO AD, DIVISION AND PMGSY. DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS SHOWN GRO SS RECEIPTS AT RS.38,44,01,542/- AND DECLARED NET INCOME AT RS.2,53,97,110/- WHICH INCOM E COMES TO 6.57% OF THE GROSS CONTRACT RECEIPTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEES AR SUBMITTED THE DETAILS OF MATERIAL PURCHASES AND THE SAME WERE EXAMINED BY THE AO AND FOUND THAT ONLY THE EXPENSES DEBITED ON ACCOUNT OF PURCHASE OF BITUMEN, STEEL AND CEMENT AND TO SOME EXTENT MACHINE RUNNING EXPENSES (THE MA JOR PART OF EXPENSES HAVE BEEN INCURRED ON DIESEL FOR WHICH BILLS/VOUCHERS HAVE BE EN PRODUCED) IS VERIFIABLE. IN RESPECT OF EXPENSES DEBITED ON ACCOUNT OF PURCHASE OF OTHER MA TERIALS DURING THE EXAMINATION OF BOOKS OF ACCOUNTS, THE AO OBSERVED THAT THERE WAS NO PRIM ARY EVIDENCE TO SUPPORT THESE EXPENSES. 2 ITA NO.253/PAT/2013 RISHI BUILDERS (INDIA) PVT. LTD. AY 2009-10 ACCORDING TO HIM, SOME SELF GENERATED VOUCHERS WERE PRODUCED WHERE CONSOLIDATED PAYMENT FOR MANY DAYS IN THE RANGE OF RS.19,000/- H AS BEEN SHOWN. CONSIDERING THE ABOVE DISCREPANCIES THE AO HAS ADDED RS.50,00,000/- OUT O F THE TOTAL EXPENDITURE CLAIMED ON ACCOUNT OF PURCHASE OF MATERIAL. AGGRIEVED, ASSESS EE PREFERRED APPEAL BEFORE HE LD. CIT(A), WHO AFTER CONSIDERING THE DECISIONS OF THE ITAT WAS OF THE OPINION THAT ADDITION MADE BY THE AO AT RS.50,00,000/- WAS ON AN AD HOC BASIS WAS ON A HIGHER SIDE AND TOOK NOTE OF THE FACT THAT THE AO WITHOUT POINTING OUT A NY SPECIFIC DEFECTS IN THE PURCHASE ACCOUNT OF MATERIAL, THE AD-HOC DISALLOWANCE OF RS. 50 LACS WAS NOT WARRANTED, HOWEVER, HE RESTRICTED THE ADDITION TO RS.10,00,000/- AND DELET ED THE BALANCE ADDITION MADE BY THE AO OF RS.40,00,000/-. AGGRIEVED, THE REVENUE IS BEFOR E US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO HAS MADE THE ADDITIO N OF RS.50,00,000/- ON AN AD-HOC BASIS WITHOUT POINTING OUT ANY SPECIFIC ITEMS ON WHICH TH E ASSESSEE FAILED TO PRODUCE ANY EVIDENCE TO SUBSTANTIATE ITS CASE. IT IS SETTLED P OSITION OF LAW THAT THE ADDITION SHOULD NOT BE MADE ON AD HOC BASIS. THE AO IN CASE FOUND THAT TH E ASSESSEES CLAIM OF EXPENSES ARE NOT SUPPORTED BY EVIDENCE/MATERIAL, THEN WAS EMPOWERED TO DISALLOW THE CLAIM ITEM WISE, AND NOT ON AN AD HOC BASIS, WHICH ACTION OF THE AO SMAC KS OF ARBITRARINESS AND, THEREFORE CANNOT STAND THE SCRUTINY OF LAW. WE NOTE THAT THE LD. CIT(A) TOOK NOTE OF THE FACT THAT AO FAILED TO POINT OUT ANY SPECIFIC DEFECTS IN THE CLA IM OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING THE DECISION OF COORDINATE BENCH, ITAT PATNA, RESTRICTED THE DISALLOWANCE TO RS.10,00,000/- OUT OF RS.50,00,000/- MADE BY THE AO , WHICH ACTION OF THE LD. CIT(A) HAS NOT BEEN CHALLENGED BY THE ASSESSEE BY PREFERRING A N APPEAL OR CO AND HENCE, WE DECLINE TO INTERFERE IN THE IMPUGNED ORDER OF THE LD. CIT(A) A ND THE SAME IS HEREBY UPHELD. APPEAL OF REVENUE IS THUS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE STANDS DISMISSE D. ORDER IS PRONOUNCED IN OPEN COURT ON 12.04.2017 SD/- SD/- (WASEEM AHMED) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 12 TH APRIL, 2017 JD. SR. PS 3 ITA NO.253/PAT/2013 RISHI BUILDERS (INDIA) PVT. LTD. AY 2009-10 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT ACIT, CIRCLE-1, MUZAFFARPUR 2. / RESPONDENT - RISHI BUILDERS (INDIA) PVT. LTD 3. ' / CONCERNED CIT 4. ' - / CIT (A) 5. # && , / DR, ITAT, PATNA 6. ( / GUARD FILE. BY ORD ER/ , ASSISTANT REGI STRAR, ITAT, PATNA,