The ITO, Ward-9(2), Ahmedabad V. M/s. Amardeep Associates, Ahmedabad

ITA 2712/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5949 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAK
• Assessee Lawyers: P L SHAH
• Keywords: Business income
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 2712/AHD/2014 (ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER, WARD- 9 (2), AHMEDABAD V/S M/S. AMARDEEP ASSOCIATES 1, RAJ KAMAL SOCIETY, NR. SHYAMAL RAW HOUSE, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAUFA5420A APPELLANT BY : SHRI O.P. PATHAK, SR. D.R . RESPONDENT BY : SHRI P.L. SHAH, A.R. ( )/ ORDER DATE OF HEARING : 23 -02-201 8 DATE OF PRONOUNCEMENT : 26 -02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-XX, AHMEDABAD DATED 25.07.2014 PERTAINING TO A.Y. 2009- 10. ITA NO. 2712 /AHD/2014 . A.Y. 2009-1 0 2 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE L D. CIT(A) ERRED IN TAKING INCOME AT 10% OF RECEIPT OF RS. 74,00,000/- IGNORIN G THE FACT THAT AN AMOUNT OF RS. 53.50 LACS WAS ON ACCOUNT OF SALE CONSIDERAT ION OF TERRACE RIGHT WHICH SHOULD HAVE BEEN ADDED SEPARATELY. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT DURIN G THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE A SSESSEE HAS SOLD 13 SHOPS FOR RS. 20.50 LACS AND HAS ALSO SOLD THE RIGHTS OF TERRACE FOR RS. 53.50 LACS. THE TOTAL RECEIPTS FOR THE YEAR WAS RS. 74 LACS. 4. SINCE THE GROSS RECEIPTS WERE IN EXCESS OF RS. 40 L ACS, THE ASSESSEE WAS REQUIRED TO GET ITS BOOKS OF ACCOUNTS AUDITED U/S. 44AB OF T HE ACT. ON FINDING NO AUDIT REPORT, THE A.O. ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN WHY THE RECEIPTS AMOUNTING TO RS. 74 LACS SHOULD NOT BE CON SIDERED AS TOTAL SALES FOR THE YEAR UNDER CONSIDERATION AND WHY THE BOOK RESULT SH OULD NOT BE REJECTED. ASSESSEE FILED A DETAILED REPLY WHICH DID NOT FIND ANY FAVOUR WITH THE A.O. THE A.O. OBSERVED THAT THE ASSESSEE IS IN THE BUSINESS OF CONSTRUCTION SINCE LAST 10 YEARS AND EARNING SUBSTANTIAL INCOME WHICH WAS LIAB LE TO INCOME TAX. THE A.O. FOUND THAT THE ASSESSEE HAS NOT FILED ANY RETU RN OF INCOME UP TO A.Y. 2008-09, THE RETURN FOR THE YEAR UNDER CONSIDERATIO N WAS FILED FOR THE FIRST TIME. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS NOT SHOWN HIS TOTAL RECEIPTS OF RS. 74 LACS. THE A.O. CONCLUDED BY REJECTING THE BO OK RESULTS AND COMPLETED THE ASSESSMENT BY ASSESSING TOTAL INCOME AT RS. 72, 18,116/-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND PLEADED THAT IT IS MAINTAINING BOOKS OF ACCOUNTS ON CASH SYSTEM, THERE FORE, THE RECEIPTS WERE NOT INCLUDED. AFTER CONSIDERING THE FACTS AND THE SUBMI SSIONS, THE LD. CIT(A) WAS ITA NO. 2712 /AHD/2014 . A.Y. 2009-1 0 3 OF THE OPINION THAT A PROFIT RATE SHOULD BE APPLIED ON THE GROSS TURNOVER OF THE ASSESSEE. TAKING A LEAF OUT OF THE PROVISIONS OF SE CTION 44AD OF THE ACT, THE LD. CIT(A) DIRECTED THE A.O. TO ESTIMATE THE PROFIT @ 1 0% OF THE TURNOVER AND CONFIRMED THE ADDITION TO THE EXTENT OF RS. 7.40 LA CS. 6. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. THE L D. D.R. STRONGLY STATED THAT THE LD. CIT(A) HAS ERRED IN TAKING THE ENTIRE RECEI PTS AS GROSS TURNOVER OF THE ASSESSEE FOR THE PURPOSES OF ESTIMATING THE NET PRO FIT. IT IS THE SAY OF THE LD. D.R. THAT THE ASSESSEE HAS SOLD TERRACE RIGHT SEPAR ATELY AND THEREFORE THE ENTIRE RECEIPTS OF RS. 53.50 LACS SHOULD BE TAXED OVER AND ABOVE, THE RATE OF 10%. 7. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. WE FIND THAT THE ASSESSEE HAS SOLD THE SHOPS TO THE FOLLOWING PA RTIES:- SR.N O. SHOP NO. SHOP OWNER (GROUND FLOOR) DASTAVEJ DATE DESTAVEJ NO. DASTAVEJ AMT. 1 1,2&57 PATEL RASHIKBHAI P. CHAUHAN CHIRAGBHAI MAHENDRABHAI PATEL DINESHBHAI RAMESHCHANDRA 17.10.2008 9267 3,350.000.00 2 58 TO 68 RAMSHING SAMBHUSHING RAJPUT 25.02.2009 2981 2982 800,000.00 1,200,000.00 3 46 PATEL PRAVINBHAI PURSHOTAMBHAI 21.05.2008 5326 105,000.00 4 59 PATEL DAHYABHAI KARSHANTBHAI 21.05.2008 5324 105,000.00 5. 61 RAVAL DINESHBHAI RAMBHAI 21.05.2008 5325 105, 000.00 6. 6 PATEL KAUSHIKBHAI RATIBHAI 31.05.2008 5323 105,000.00 7. 39 PATEL HITENDRABHAI JAYANTIBHAI 03.07.2008 6610 225,000.00 8. 55 PATEL HITENDRABHAI 03.07.2008 6610 225,000.00 ITA NO. 2712 /AHD/2014 . A.Y. 2009-1 0 4 JAYTIBHAI 9 . 38 PATEL JAYESHBHAI AMIRATBHAI 26.08.2008 8188 200,000.00 10. 51 PATEL KARTIKABEN HITENDRABHAI 26.08.2008 8187 220,000.00 11 56 PATEL DASHARATBHAI MAFATBHAI 216.08.2008 8189 200,000.00 12 11 ANKALA DINESHBHAI SANKARBHAI 05.11.2008 9592 50,000.00 13 1 PATEL YOGESHBHAI RAMBHA I 27.01.2009 497 170,000.00 14 9 PRAJUPATTI SAILESHBHAI DASHRATBHAI 27.01.2009 498 170,000.00 15 10 PATEL VIDHYABEN KIRITBHAI 27.01.2009 496 170,000.00 TOTAL 74,00,000.00 8. IT IS AN UNDISPUTED FACT THAT THE A.O. HAS CONSIDER ED THE ENTIRE RECEIPTS AS THE GROSS TURNOVER OF THE ASSESSEE. THE GROSS TURNOVER OF RS. 74 LACS INCLUDES THE CONSIDERATION ON ACCOUNT OF TERRACE RIGHTS. THEREFO RE, THE LD. CIT(A) HAS RIGHTLY ESTIMATED THE PROFIT RATE AT 10% ON THE ENTIRE TURN OVER OF THE ASSESSEE. IN OUR CONSIDERED OPINION, THE CONSIDERATION ON ACCOUNT OF TERRACE RIGHT IS ALSO PART OF THE GROSS TURNOVER OF THE ASSESSEE AND THEREFORE CA NNOT BE CONSIDERED FOR SEPARATE ADDITION. WE DO NOT FIND ANY ERROR OR INFI RMITY IN THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE REVENUE IS ACCORDIN GLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 26 - 02- 20 18 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 26/02/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT.