The ITO, Ward-5(1), Baroda V. M/s. Satish D.Patel, Baroda

ITA 26/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6767 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G D BALVA
• Keywords: Deemed to accrue or arise in india; TDS
• Section: 44AD; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH (BEFORE S/SHRI T.K. SHARMA, JUDICIAL MEMBER AND A.N. PAHUJA, ACCOUNTANT MEMBER) ITA NO.26/AHD/2009 [ASSTT. YEAR : 2005-2006] ITO, WARD-5(1) BARODA. VS. M/S.SATISH D. PATEL 30, VINOD VATIKA WAGHODIA ROAD, BARODA. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI G.D.BALVA ASSESSEE BY : NONE O R D E R PER T.K. SHARMA, JUDICIAL MEMBER : THIS REVENUES APPEAL IS AGAINST THE ORDER OF THE CIT(A)-V, BARODA DATED 14.10.2008 FOR A.Y.2005-2006 FOR DELETING THE ADDITION OF RS.6,70, 831/- WHICH THE AO STATED TO BE ADMITTED BY THE ASSESSEE. 2. DESPITE SERVICES OF NOTICE FOR HEARING OF THE CA SE THROUGH REGISTERED AD POST, NONE APPEARED ON BEHALF OF THE ASSESSEE NO R FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE. IN THESE CIRCUMSTANCES, WE PROCEED TO DECIDE THE CASE EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DR AND CONSIDERING THE MATERIAL AVAILABLE O N RECORD. 3. THE BRIEF FACTS RELATING TO THE CONTROVERSY INVO LVED IN THIS APPEAL IS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIV IL CONSTRUCTION ON CONTRACT BASIS. FOR THE ASSESSMENT YEAR IN APPEAL, THE AO FRAMED THE ASSESSMENT UNDER SECTION 143(3) OF THE IT ACT ON 22 -11-2007 WHEREIN THE HE MADE ADDITION OF RS.6,71,160/- ON ACCOUNT OF UNACCOUNTED RECEIPTS FOR THE DETAILED REASONS GIVEN IN PARA-4 OF THE ASS ESSMENT ORDER. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED CIT(A) H ELD THAT THE ENTIRE ITA NO.26/AHD/2009 -2- RECEIPT CANNOT BE TAXED. HE ACCORDINGLY, APPLIED P ROVISIONS CONTAINED IN SECTION 44AD AND WORKED THE DEEMED INCOME AT RS.97, 350/-. IN THE IMPUGNED ORDER, HE CONFIRMED THE ADDITION TO THE EX TENT OF RS.97,021/- AND ALLOWED RELIEF OF RS.5,73,810/-. 4. THE AGGRIEVED REVENUE IS IN APPEAL BEFORE US. 5. THE CIT(A) ALLOWED THE RELIEF TO THE ASSESSEE BY THE FOLLOWINGS FINDING: 3.2 I HAVE GONE THROUGH THE FACTS OF THE CASE AS W ELL AS THE FINDINGS OF THE AO. IT IS SEEN FROM THE RECORDS TH AT THERE WAS DIFFERENCE BETWEEN THE RECEIPTS ADMITTED BY THE APP ELLANT AS SEEN FROM E TDS CERTIFICATES ISSUED BY THE EXECUTIVE ENG INEER R&D DIVISION AND SO AS SEEN FROM THE RECEIPTS AS OBSERV ED FROM THE BANK ACCOUNT. THESE STAND AT RS.11,91,614/-, RS.12,16,80 1/- AND RS.18,18,074. SINCE THE DIFFERENCE HAPPENED TO BE R S.6,70,831/- THE SAME IS ADDED TO THE RETURNED INCOME OF RS.329/- RE TURNED IN TERMS OF THE PROVISIONS OF SECTION 44AD. THE FINDINGS OF THE AO WERE NOT DISPUTED BY THE APPELLANT. THE DIFFERENCE IN RECEIP TS CANNOT BE ADDED, BUT THE ELEMENT OF INCOME HAS TO BE CURBED O UT. THE TOTAL RECEIPTS AS PER THE INFORMATION AVAILABLE FROM THE BANK ALSO WERE LESS THAN RS.40,00,000/- AND STILL THE PROVISIONS O F SECTION 44AD ARE APPLICABLE. THUS, IN VIEW OF THE FINDING OF THE FAC T BY THE AO THE DEEMED INCOME COMES TO RS.97,350/ AND THUS, THE ADD ITION TO THE EXTENT OF RS.97,021/- IS CONFIRMED AND THE APPELLAN T GETS A RELIEF OF RS.5,73,810/-. 6. THE LEARNED DR POINTED OUT THAT CONTRACT RECEIPT SHOWN FOR THE PURPOSE OF COMPUTATION OF THE INCOME UNDER SECTION 44AD WAS RS.11,91,614/-, WHEREAS AS PER THE DETAILS FURNISHE D BY EXECUTIVE ENGINEER, R&D DIVISION, DIST: BARODA RECEIPT AMOUNT ING TO RS.12,16,801/-. THUS, THERE WAS A DIFFERENCE OF RS .25,187/-. HAVING NOTICED THE DIFFERENCE IN THE RECEIPTS, THE AO COND UCTED INQUIRY WITH THE BANK ACCOUNT OF THE ASSESSEE (SB A/C.NO.20499 WITH ORIENTAL BANK OF COMMERCE, ALKAPURI, BARODA). FROM THE STATEMENT SU PPLIED BY THE BANK, THE AO OBSERVED THAT THE ASSESSEE HAD EARNED INCOME TO THE EXTENT OF ITA NO.26/AHD/2009 -3- RS.18,62,445/- AND NOT RS.11,91,614/-. HE ACCORDIN GLY, ADDED RS.6,70,831/- TO THE TOTAL INCOME OF THE ASSESSEE. THE LEARNED AR POINTED OUT THAT THIS CONTENTION WAS CONSIDERED BY THE LEAR NED CIT(A), HOWEVER, THE CIT(A) IS NOT JUSTIFIED IN RESTRICTING THIS ADD ITION TO RS.97,021/-. 7. HAVING HEARD THE LEARNED DR, WE HAVE GONE THROUG H THE ORDERS OF THE AUTHORITIES BELOW. IN THE IMPUGNED ORDER, THE LEARNED CIT(A) HELD THAT ENTIRE DIFFERENCE IN RECEIPT CANNOT BE ADDED, BUT THE ELEMENT OF INCOME HAS TO BE CURBED OUT. ON THIS BASIS, HE APP LIED PROVISIONS OF SECTION 44AD AND WORKED OUT THE DEEMED INCOME OF RS .97,350/-. TO SUM UP, IN OUR OPINION, THE LEARNED CIT(A) HAS GIVE N COGENT REASON FOR RESTRICTING THE ADDITION TO RS.97,021/-. WE THEREF ORE DECLINE TO INTERFERE WITH THE ORDER OF THE CIT(A). 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 4 TH MAY, 2011 SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (T.K. SHARMA) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 04-05-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD