Shri Kirtikumar M.Bhangdia, Nagpur V. Joint commissioner of Income Tax Range-8, Nagpur

ITA 273/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3891 (ITAT-NAGPUR)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 06-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR MILLIND BHUSARI
• Section: 80C; 133A; 234B; 80G; 194C; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI BEFORE SHRI R.K.GUPTA , J M & SHRI D.KARUNAKAR A RAO , A M ITA NO S . 268 , 269 & 285 / N AG / 20 1 2 ( ASSESSMENT YEAR S 200 6 - 0 7 , 2008 - 09 & 2007 - 08) ) SHRI MITESH G. BHANGADIYA, BHANGADIA HO USE, NEAR GETWEL HOSPITAL, DHANTOLI, NAGPUR - 440 010 VS. JCIT, RANGE - 8, NAGPUR - 06 PAN NO. : A ERPB 2503 E ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 2 70 / NAG /20 12 ( ASSESSMENT YEAR 200 7 - 08 ) M/S S.S.PATIL & CO. AND M.G.BHANGADIYA, BHANGADIA HOUSE, NEAR GE TWEL HOSPITAL, DHANTOLI, NAGPUR - 440 010 VS. JCIT, RANGE - 8, NAGPUR - 06 PAN NO. : A BIFS 3645 L ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 2 7 1 / NAG /20 12 ( ASSESSMENT YEAR 200 7 - 0 8 ) M/S MAHENDRA CONSTRUCTION CO. AND M. G. BHANGADIYA, BHANGADIA HOUSE, NEAR GETWEL HOSPITAL, DHANTOLI, NAGPUR - 440 010 VS. JCIT, RANGE - 8, NAGPUR - 06 PAN NO. : A ANFM 5658 B ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO S . 2 7 2 TO 274 / NAG /20 12 ( ASSESSMENT YEAR 2006 - 07 , 2007 - 08 & 2008 - 09 ) SHRI KIRTIKUMAR M. BHANGADIYA, BHANGADIA HOUSE, NEAR GETWEL HOSPITAL, DHANTOLI, NAGPUR - 440 010 VS. JCIT, RANGE - 8, NAGPUR - 06 PAN NO. : A GYPB 1659 G ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : MR. K.P.DEWANI REVENUE BY : DR. MILLIND BHUSARI DATE OF HEARING : 7 TH MARCH ., 201 3 DATE OF PR ONOUNCEMENT : 03/04/ 201 3 ITA NO S . 268 TO 274 & 285/NAG/2012 2 O R D E R P ER BENCH : THESE EIGHT APPEALS HAVE BEEN PREFERRED BY FOUR DIFFERENT ASSESSEES BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAIN ST THE ORDER OF LEANED CIT(A) - II , NAGPUR (MAHARASHTRA) RELATING TO ASSESSMENT YEARS 200 6 - 07, 2007 - 08 & 2008 - 09 , RESPECTIVELY , WHICH HA VE BEEN HEARD THROUGH E - COURT, MUMBAI. \ 2 . SINCE COMMON ISSUES ARE INVOLVED IN ALL THE CASES, THEREFORE, FOR THE SAKE OF CONVENIENCE , THESE CASES HAVE BEEN HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER. 3 . THE ARGUMENTS WERE ADVANCED BY BOTH THE PARTIES IN THE CASE OF SHRI MITESH G. BHANGADIYA, LISTED UNDER ITA NO. 268/NAG/2012 AND IT WAS STATED THAT AS IDENTICAL FACTS ARE INVOLVED IN OTHER CASES ALSO, THEREFORE, THE OUTCOME OF THE SAME CAN BE MADE APPLICABLE IN ALL THE CASES . AS SUBMITTED BY BOTH THE PARTIES, WE WILL NOW DISCUSS THE FACTS IN CASE OF SHRI MITESH G. BHANGADIYA, LISTED UNDER ITA NO.268/NAG/2012 AND THE OUTCOME OF THE SAME WILL BE APPLICABLE IN ALL THE CASES AS THE FACTS ARE SIMILAR. 4 . BRIEF FAC TS OF THE CASE ARE THAT A SURVEY U/S.133A OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE AND HIS ASSOCIATES ON 17.02.2009. DURING THE COURSE OF SURVEY OPERATIONS IT WAS FOUND THAT MOST OF THE BILLS, VOUCHERS AND OTHER EVIDENCE IN SUPPORT OF THE ENTRIES IN THE BOOKS OF ACCOUNT LIKE LABOUR CHARGES, MATERIAL PURCHASES, 'MACHINE HIRE CHARGES, SITE ITA NO S . 268 TO 274 & 285/NAG/2012 3 EXPENSES, SUB CONTRACT EXPENSES, OIL AND LUBRICANTS, REPAIRS AND MAINTENANCE ETC. PERTAINING TO THIS A. Y. WERE NOT AVAILABLE. S TATEMENT OF SRI MITHESH BHANGADIYA WAS RECORDED UNDER SECTION 133A AND U/S. 131 OF THE ACT ON BEHALF OF THE ASSESSEE. IN THE STATEMENT DT.24.02.2009 AND 13.03.2009, IN RESPONSE TO VARIOUS QUESTIONS RELATING TO THE GENUINENESS OF THE PAYMENTS TO THIRD PARTY SUB CONTRACTORS AND IN RESPECT TO OTHER DEFICIENCIES , THE ASSESSEE ADMITTED ADDITIONAL INCOME IN GROUP CASES OF RS. 11, CRORE AND PROPORTIONATELY WERE ALLOCATED BETWEEN ALL THE ASSESSMENT YEARS RELATING TO THESE FOUR ASSESSEES. FOR THE YEAR UNDER CONSIDER ATION I.E. FOR ASSESSMENT YEAR 2006 - 07 IN CASE OF SRI MITHESH BHANGADIYA , THE ADDITION AL INCOME WAS OFFERED AT RS.23 , 97,361/ - BESIDES THE INCOME SHOWN ORIGINALLY AT RS. 23,63,910/ - . DUE TAX WAS PAID BEFORE THE ISSUANCE OF NOTICE UNDER SECTION 148 AS ADMITTE D BY THE AO IN PARA 2 OF HIS ORDER. THE IMPORTANT CONTENTS OF SUBMISSION RECORDED ON 24 - 2 - 2009 AND ON 13 - 3 - 2009 OF SRI MITHESH BHANGADIYA ARE INCORPORATED IN THE ORDER OF THE AO. IN QUER Y OF QUESTION NO.11, IT WAS ANSWERED THAT DURING THE COURSE OF SURVEY , IT WAS NOTICED THAT THERE ARE CERTAIN DISCREPANCIES AND OMISSIONS AND TO COVER UP ALL SUCH DISCREPANCIES WE HAVE MADE OUR MIND TO OFFER ADDITIONA L I NCOME OVER AND ABOVE THE REGULAR INCOME. WE ARE UNDER THE PROCESS TO DETERMINE SUCH ADDITIONAL INCOME TO A VOID LITIGATION AND, TO BUY PEACE OF MIND. THEREAFTER IN RESPONSE TO QUESTION NO S . 18 & 19 OF THE STATEMENT RECORDED ON 13 - 3 - 2009, IT WAS ANSWERED THAT THE SUB CONTRACTORS WERE AWARDED THE SUB CONTRACT WORK BY OUR ITA NO S . 268 TO 274 & 285/NAG/2012 4 FIRMS AS PER CONTRACT NOTES AND THE NATURE OF SUB CONTRACTS HAS BEEN THAT LABOUR CHARGES AND MACHINE HIRE CHARGES. THE SUB CONTRACTORS BY AND LARGE ILLITERATE AND THEREFORE, THEIR BOOKS OF ACCOUNTS FOUND TO BE INCOMPLETE, WITHOUT MAINTENANCE OF ANY BILLS AND VOUCHERS. THE EXPENSES INCURRED BY OUR F IRM HAS BEEN ON THE BASIS OF THE SO CALLED VOUCHERS RAISED BY THEM AND THEREFORE, THERE APPEARS THE DISCREPANCIES IN THE EXPENSES CLAIMED . IT WAS FURTHER STATED THAT THE ASSESSEE HAS ADMITTED IN HIS PREVIOUS STATEMENT RECORDED DURING THE COURSE OF SURVEY THAT THERE ARE CERTAIN DISCREPANCIES AND ANOMALIES IN THE SUB CONTRACT EXPENSES IN THEIR BOOKS OF ACCOUNTS, NON AVAILABILITY OF BILLS AND VOUCHERS FOR THE PAST THREE ASSESSMENT YEARS. ACCORDINGLY, IT WAS SUBMITTED THAT THERE WERE CERTAIN DISCREPANCIES AND ANOMALIES IN THE SUB CONTRACT ACCOUNTS, IN BOOKS OF ACCOUNTS FOR ASSESSMENT YEARS 2006 - 07 TO 2009 - 10. THE ASSESSEE DECLARED THE ADDITIONAL INCOME OF RS.11 CRORE IN THEIR FIRM AND THE FIVE SISTER CONCERNS IN THE ASSESSMENT YEAR 2006 - 07 TO 2009 - 10. THE WORKI NG OF THE ADDITIONAL INCOME OF RS. 11 CRORES WILL BE DONE ACCORDINGLY AND THE SAME WILL BE SHOWN. THESE PART OF THE STATEMENTS HAVE BEEN INCORPORATED IN THE ORDER OF THE AO AS STATE ABOVE. THEREAFTER THE AO STARTED SCRUTINY OF THE CASE. THE AO NOTED THAT THE ASSESSEE HAS SHOWN VARIOUS EXPENSES UNDER THE HEAD LABOUR & WAGES , MACHINE HIRE CHARGES, SITE EXPENSES AND SUB CONTRACT EXPENSES ETC. ON VERY HIGHER SIDE, WHICH ARE NOT SUPPORTED BY VALID VOUCHERS. NEITHER ANY FURTHER EVIDENCE WAS FILED. IT WAS ALSO OB SERVED BY THE AO THAT SINCE THERE ARE VARIOUS DEFICIENCIES ITA NO S . 268 TO 274 & 285/NAG/2012 5 IN ACCOUNTS OF SUB CONTRACTS AND THE ASSESSEE HAS OFFERED A SUM OF RS. 23,97,361/ - ON ACCOUNT OF DISCREPANCIES IN RESPECT TO SUB CONTRACT, THEREFORE, HE PROCEEDED TO MAKE FURTHER ADDITION ON ACCOUNT OF VARIOUS DEFICIENCIES I.E. IN ABSENCE OF BILLS AND VOUCHERS, EXCESS CLAIM TOWARDS MACHINERY HIRE CHARGES, VERIFICATION OF APPLICABILITY OF PROVISION OF SECTION 194C AND DENIAL OF ALLEGED SUB CONTRACTORS REGARDING THE SUB CONTRACT GIVEN BY THE ASSESSEE . ALL THESE DISCREPANCIES ARE NOTED BY THE AO IN HIS ORDER. THEREAFTER IN PARA 7, THE AO HAS OBSERVED THAT AFTER HAVING REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE UNDER SECTION 145(3) OF THE ACT, THE PROFIT OF THE ASSESSEE HAS TO BE ESTIMATED REASONABLY. THE AO ALSO OBSERVED THAT THE ASSESSEE HAS DECLARED NET PROFIT RATIO OF 6% AND 7% OF THE TOTAL TURNOVER IN ASSESSMENT YEARS 2006 - 07 & 2007 - 08 . AFTER OFFERING ADDITIONAL INCOME OF RS. 23,97,360/ - FOR ASSESSMENT YEAR 2006 - 07, THE RESULTS IN REVISED NET PROFI T COMES TO 12. 87 % OF THE CONTRACT RECEIPTS. HOWEVER, THIS NET PROFIT WAS FOUND BY THE AO ON LOWER SIDE. THE AO NOTED THAT IN ONE OF THE GROUP CASE NAMELY, M/S MAHENDRA CONSTRUCTION & M.G. BHANGADIA (JV) , WHO HAD DECLARED ADDITIONAL INCOME OF RS. 1,57, 47, 760 / - IN THE ASSESSMENT YEAR 2007 - 08 , WHICH GIVES A NET PROFIT RATIO OF 13.84% OF THE NET CONTRACT RECEIPTS. IN VIEW OF THESE FACTS THE AO ADOPTED 14% NET PROFIT. THEREAFTER THE AO COMPLETED THE ASSESSMENT AND MADE ADDITION OF RS. 30,12,722/ - AGAINST ADDITIONA L INCOME SHOWN BY THE ASSESSEE AT RS. 23,97,360/ - , WHICH RESULTED FURTHER ADDITION OF RS. 6,15, 362/ - . ITA NO S . 268 TO 274 & 285/NAG/2012 6 5 . BEING AGGRIEVED WITH THE ORDER OF THE AO, THE THESE ASSESSEES PREFERRED APPEAL BEFORE THE CIT(A) . DETAIL SUBMISSION WERE FILED BEFORE THE CIT(A) , WHICH A RE INCORPORATED IN THE ORDER OF THE CIT(A) AT PAGES 8 TO 10. THEREAFTER THE CIT(A) AFTER DISCUSSING THE FACTS ONCE AGAIN AND TAKING INTO CONSIDERATION THE RATIO PROFITS SHOWN IN VARIOUS OTHER CASES, FOUND THAT THE ESTIMATE OF NP @ 14% ADOPTED BY THE AO IS REASONABLE. LEARNED CIT(A) HAS NOTED THAT FOR ASSESSMENT YEAR 2006 - 07 , THE ASSESSEE HAS SHOWN PROFIT AT 6.16% . T HE NET PROFIT AFTER ADDITION COMES TO 12. 87 % AND THE AO HAS ADOPTED 14%. SIMILAR LY FOR ASSESSMENT YEAR 2007 - 08 , THE ASSESSEE HAS SHOWN NP RATE A T 7.19% AND AFTER SHOWING ADDITIONAL INCOME OF RS. 42,69,450/ - , THE NP RATE COMES TO 10 . 69%. F OR ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAS SHOWN N P RATE OF 4.21% AND AFTER ADDITIONAL INCOME OF RS. 41,62,970/ - , THE NET PROFIT COMES TO 10.53% AND THE AO HAS AD OPTED 14%. SIMILARLY, IN OTHER CASES ALSO, LEARNED CIT(A) EXAMINED THE FACTS AND FOUND THAT THE NP RATE DERIVES BETWEEN 10 TO 11.94% AND, THEREFORE, HELD THAT THE RATE ADOPTED AT 14% IS REASONABLE. LEARNED CIT(A) ALSO NOTED THAT IN CASE OF M/S MAHENDRA CON STRUCTION & M.G. BHANGADIA (JV) , THE NP RATE FOR ASSESSMENT YEAR 2007 - 08 COMES TO 13.84 % AFTER OFFERING ADDITIONAL INCOME OF RS. 3,14,67,720/ - , THEREFORE, THE AO HAS BASED ON THIS RATE, HAS APPLIED 14%, WHICH IS REASONABLE. ACCORDINGLY, LEARNED CIT(A) CONFI RMED THE RATE OF 14% ADOPTED BY THE AO . NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. ITA NO S . 268 TO 274 & 285/NAG/2012 7 6 . DETAIL SUBMISSIONS HAVE BEEN FILED ON BEHALF OF THE ASSESSEE FOR ALL THE THREE YEARS SEPARATELY. ON THE OTHER HAND, LEARNED DR HAS STRONGLY, PLACED RELIAN CE ON THE ORDER OF LEARNED CIT(A) . 7 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE DESERVES TO SUCCEED IN HIS APPEAL IN PART. WE NOTED FOR THE YEAR UNDER CONSIDERATION I.E. FOR ASSESSMENT YEAR 2006 - 07 , T HE ASSESSEES NP RATE COMES TO 12.87%, FOR ASSESSMENT YEAR 2007 - 08, THE ASSESSEES NP RATE COMES TO 10.69% AND FOR ASSESSMENT YEAR 2008 - 09, THE ASSESSEES NP RATE COMES TO 10.53%, RESPECTIVELY. WE ALSO NOTED THAT IF THE NP RATE OF ALL THE CONCERNS ARE TAKE N INTO CONSIDERATION, THEN IT IS SEEN THAT ALL THE ASSESSEES HAVE SHOWN GOVERNMENT RECEIPT AT RS. 258,55,37,850/ - AND INCOME ON THESE CONTRACTS HAVE BEEN SHOWN BY THESE ASSESSEE AT RS. 16,49,57,111/ - WHICH GIVES A NP RATE OF 6.38%. THE ASSESSEE HAS OFFERED A DDITIONAL INCOME DECLARED DURING THE SURVEY AT RS. 11,03,85,877/ - , WHICH GIVES A NP RATE OF 4.27% AND THE TOTAL NP RATE IN ALL THESE CONCERNS COMES TO 10.65%. OF COURSE, THE ADDITIONAL INCOME OF RS. 11 CRORE OR ODD WAS SEGREGATED PROPORTIONATELY ON THE BASIS OF CONTRACT RECEIPTS IN THE HANDS OF EACH CONCERN. IN CASE OF M/S MAHENDRA CONSTRUCTION & M.G. BHANGADIA (JV), THE NP RATE COMES TO 13.84% I.E. FOR ASSESSMENT YEAR 2007 - 08 AND THIS RATE HAS BEEN ADOPTED BY THE AO AND HAS APPLIED THE NP RATE OF 14% IN ALL THE YEARS IN CASE OF ALL THESE ASSESSEES ON WHOM A SURVEY WAS CONDUCTED. IN OUR VIEW, THIS APPROACH OF THE AO WAS NOT CORRECT APPROACH . IN CASE OF ITA NO S . 268 TO 274 & 285/NAG/2012 8 M.G.BHANGADIYA, THE NP RATE OF THREE YEARS COME TO 9.87%, WHEREAS IN CASE OF OTHER ASSESSEES I.E. SANJAY HED A, M/S MAHENDRA CONSTRUCTION & M.G. BHANGADI Y A (JV), THE NP RATE COMES TO 9.50% AND IN CASE OF M/S MAHENDRA CONSTRUCTION & M.G. BHANGADI Y A (JV) , THE AVERAGE NP RATE OF THREE YEARS COMES TO 11.28% AND IN CASE OF M/S KIRTIKUMAR BHANGADIYA, THE NP RATE COMES TO 8.72% AND IN CASE OF M.G.BHANGADIYA AND M/S MAHENDRA CONSTRUCTION & M.G. BHANGADI Y A (JV) , THE NP RATE COMES TO 6.12%. IN CASE OF M.G.BHANGADIYA AND S.S.PATIL & M.G.BHANGADIYA, THE NP OF THREE YEARS COMES TO 11.55% . A S STATED ABOVE, THE AVERAGE NP RATE O F ALL THE ASSESSEES FOR ALL THE THREE YEARS COMES TO 10.65%. THEREFORE, IN OUR VIEW, A RATIONAL APPROACH SHOULD HAVE BEEN ADOPTED BY THE AO OR BY THE LEARNED CIT(A) . FOR ONE CASE I.E. M/S MAHENDRA CONSTRUCTION & M.G. BHANGADIA (JV) , THE NP RATE WAS 13.84% AND IF THIS RATE IS APPLIED IN ALL OTHER CASE S , WHICH IN OUR VIEW, IS NOT JUSTIFIED . HOWEVER, THERE IS ALSO NO DISPUTE THAT THERE WERE SO MANY DISCREPANCIES IN MAINTAINING VOUCHERS , BILLS, SUB CONTRACTS ACCOUNTS AND OTHER HEADS, WHICH WERE NOT VERIFIABLE, THEREFORE, THE ASSESSEE AND HIS GROUP CAME FORWARD TO OFFER AN ADDITIONAL INCOME OF RS. 11 CRORE AND THE SAME HAS ALSO OFFERED AND DUE TAX HAS BEEN PAID. SINCE AS STATED ABOVE, THERE ARE CERTAIN DISCREPANCIES, WE ARE OF THE VIEW, THAT IF NP RATE OF 12% IS ADOPTED INSTEAD OF 14%, THAT WILL MEET THE END OF JUSTICE. WE MADE IT CLEAR THAT WHERE NP RATE SHOWN BY THE ASSESSEE IN ANY YEAR IS MORE THAN 12%, THEN THE MORE NP RATE SHOWN BY THE ASSESSEE HAS TO BE ITA NO S . 268 TO 274 & 285/NAG/2012 9 TAKEN AS ASSESSEE HAS DECLARED HIMSELF AND IN OTHER YEA RS WHERE NP RATE SHOWN BY THE ASSESSEE IS LOWER THAN 12%, THEN 12% NP RATE HAS TO BE TAKEN. T HE AO WILL RECOMPUTE THE INCOME ACCORDINGLY. FOR THE SAKE OF CLARIFICATION, IN CASE OF ASSESSEE FOR ASSESSMENT YEAR 2006 - 07, THE NP RATE COMES TO 12.87% AFTER SHOW ING THE ADDITIONAL INCOME, THEREFORE, THE INCOME SHOWN BY THE ASSESSEE HAS TO BE ACCEPTED. HOWEVER, FOR ASSESSMENT YEARS 2007 - 08 & 2008 - 09 , THE NP RATE SHOWN BY THE ASSESSEE AFTER ADDITIONAL INCOME COMES TO 10.69% AND 10.53%. THE AO WILL ADOPT THE RATE OF 12% AND WILL COMPUTE THE INCOME ACCORDINGLY. 7.1 SINCE G ROUNDS NO. 4 & 5 IN APPEAL OF SHRI MITESH G. BHANGADIA FOR THE ASSESSMENT YEAR 2006 - 07 (I.E ITA NO. 268/NAG/ 20 12 ) , HAVE NOT BEEN PRESSED, THEREFORE, THEY ARE DISMISSED AS NOT PRESSED. GROUND NO. 6 IN T HIS APPEAL IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASS E SSEE. 8. IN APPEAL OF THE ASSESSEE (I.E. ITA NO. 269/NAG/2012 ) FOR ASSESSMENT YEAR 2 008 - 09, GROUNDS NO. 4 & 5 ARE AGAINST ALLOWING DEDUCTION UNDER SECTION 80G & 80C. 8.1 AFTER CONSIDERING THE SUBMISSION, WE FOUND THAT THE AO WILL ALLOW THESE EXEMPTIONS AS PER PROVISION OF LAW AND AFTER ASCERTAINING THE FACTUAL ASPECT OF THE CASE. WE ORDER ACCORDINGLY. ITA NO S . 268 TO 274 & 285/NAG/2012 10 8.2 GROUND NO.6 IN THIS APPEAL IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. 9. IN APPEAL FOR THE ASSESSMENT YEAR 2007 - 08 (I.E. ITA NO. 285/NAG/12) , GROUNDS NO. 4 & 5 RELATE TO CERTAIN ARITHMETICAL MISTAKE. 9.1 AFTER CONSIDERING THE SUBMISSION, WE DIRECT THE AO TO RECTIFY THE ARITHMETIC MISTAKE AFTER AFFORDING OPPORTUNITY TO THE ASSESSEE S . WE ORDER ACCORDINGLY. 9.2 . GROUN D NO.6 IN THIS APPEAL IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. 10 . IN CASE OF OTHER ASSESSEES, THE FACTS ARE SIMILAR AND WE HAVE ALREADY DISCUSSED THE FACTS ABOVE, HOWEVER, COMPUTATION HAS TO BE MADE AT THE RATE OF 12%. FOR THE SAKE OF CLARIFICATION, IN CASE OF M/S MAHENDRA CONSTRUCTION & M.G. BHANGADIA (JV) , LISTED UNDER ITA NO. 271/NAG/2012 , FOR ASSESSMENT YEAR 2007 - 08 THE ASSESSEE HAS SHOWN NP RATE OF 13.84 %, THEREFORE, IN THIS CASE THE NP RATE HAS TO BE ACCEPTED AT 13.84 % AS SHOWN BY THE ASSESSEE. ACCORDINGLY, THE ADDITION MADE IN THIS CASE IS HEREBY DELETED. 10.1 REMAINING GROUND IN THIS APPEAL IS AGAINST CHARGING OF INTEREST U NDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. ITA NO S . 268 TO 274 & 285/NAG/2012 11 11 . IN CASE OF M/S S.S.PATIL AND M.G. BHANGADIYA (JV) , LISTED UNDER ITA NO. 270/NAG/2012 , FOR ASSESSMENT YEAR 2007 - 08, THE ASSESSEE HAS SHOWN NP RATE OF 12.3% AND WE HAVE HELD THAT THE NP RATE OF 12% HAS TO BE APPLIED, THEREFORE, IN THIS CASE THE RETURN SHOWN BY THE ASSESSEE AFTER ADDITIONAL INCOME HAS TO BE ACCEPTED AND THE REMAINING ADDITION MADE BY THE AO BY APPLYING NP RAT E OF 14% IS HEREBY DELETED. 11.1 REMAINING GROUND IN THIS APPEAL IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. 12 . IN CASE OF SHRI KIR TIKUMAR M. B HANGADIYA , LISTED UNDER ITA NO S . 272 TO 274 /NAG/2012 , FOR ASSESSMENT YEAR 2006 - 07, THE ASSESSEE HAS SHOWN 11.94% NP RATE AFTER ADDITIONAL INCOME OFFERED. WE HAVE HELD THAT THE NP RATE OF 12% HAS TO BE APPLIED AND ACCORDINGLY, THE AO WILL RECOMPU TE THE INCOME BY ADOPTING NP RATE OF 12% INSTEAD OF 14% ADOPTED BY THE AO. SIMILARLY, FOR ASSESSMENT YEAR 2007 - 08, THIS ASSESSEE HAS SHOWN THE NP RATE OF 9.45%. WE HAVE HELD THAT THIS SHOULD BE 12% AND ACCORDINGLY, THE AO WILL RECOMPUTE THE INCOME BY ADOPT ING THE NP RATE OF 12% INSTEAD OF 14% AS ADOPTED BY HIM. SIMILARLY, FOR ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAS SHOWN THE NP RATE OF 9.13% , HOWEVER, THE INCOME HAS TO BE COMPUTED AT THE RATE OF 12% INSTEAD OF 14% AS ADOPTED BY THE AO . ACCORDINGLY, WE DIR ECT THE AO TO RECOMPUTE THE INCOME AS STATED ABOVE. WE ORDER ACCORDINGLY. ITA NO S . 268 TO 274 & 285/NAG/2012 12 12.1 IN APPEAL FOR ASSESSMENT YEAR 2006 - 07 (I.E. ITA NO.272/NAG/2012 ) , THE ASSESSEE HAS NOT PRESSED GROUNDS NO. 4 & 5, THEREFORE, THEY ARE DISMISSED AS NOT PRESSED. 12.2 REMAINING GR OUND IN TH IS APPEAL IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. 13 . IN APPEAL FOR ASSESSMENT YEAR 200 7 - 08 (I.E. ITA NO.27 3 /NAG/2012 ) , R EMAINING GROUND IN IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. 14 . IN APPEAL FOR ASSESSMENT YEAR 200 8 - 0 9 (I.E. ITA NO.27 4 /NAG/201 2 ), GROUNDS NO.4 & 5 ARE AGAINST ALLOWING DEDUCTION UNDER SECTION 80G & 80C. 14 .1 THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80C & 80G IN THE INCOME TAX RETURN. AFTER CONSIDERING THE SUBMISSION, WE RESTORE THIS ISSUE TO THE FILE OF THE AO FOR EXAMIN ING THIS ISSUE AFRESH. THE DEDUCTION UNDER SECTIONS 80C & 80G SHOULD BE ALLOWED AS PER PROVISION OF LAW AND AFTER VERIFYING THE SAME FROM THE DETAILS AND EVIDENCES FILED. WE ORDER ACCORDINGLY. 14.2 REMAINING GROUND IN THIS APPEAL IS AGAINST CHARGING OF IN TEREST UNDER SECTION 234B & C OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE, THEREFORE THE AO WILL ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE ITA NO S . 268 TO 274 & 285/NAG/2012 13 1 5 . RESULTANTLY, ALL THE APPEAL S OF THE ASSESSEE S ARE ALLOWED IN PART AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF A PRIL 2013. SD/ - SD/ - ( D.KARUNAKAR A RAO ) ( R.K.GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED : 03 / 04 / 201 3 . PKM , PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) ,NAGPUR . 4. CIT 5. DR, ITAT, MUMBAI /NAGPUR 6. GUARD FILE. //TRUE COPY// BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUM BAI