Sri Balraj Singh, Cuttack V. ITO, Dhenkanal

ITA 278/CTK/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4186 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2010
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 03-12-2009
• Court: TRIBUNAL
• Department Lawyers: D J ROY
• Assessee Lawyers: P R MOHANTY
• Section: 44AD; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE HONBLE SHRI D.K.TYAGI, JUDICIAL MEMBER. /AND HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER . / I.TA.NO . 278/CTK/2009 / ASSESSMENT YEAR 2005 - 06 SRI BALARAJ SINGH, C/O. S.K.ACHARYA & ASSOCIATE, AT: VIYA SARANI,MAHATAB ROAD, A.D.MARKET, CUTTACK 12 PAN ATLPS 7026 E - - - VERSUS - . I NCOME - TAX OFFICER, WARD 2, DHENKANAL. / A PPELLANT RESPONDENT FOR THE APPELLANT : SHRI P.R.MOHANTY, AR FOR THE RESPONDENT : SHRI D.J.ROY, DR / ORDER SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THE ASSESSEE IN THIS APPEAL AGITATING THE GROUND ON ESTIMATING NET PROFIT @ 6% AS AGAINST RETURNED BY THE ASSESSEE. 2. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE DERIVES INCOME FROM EXECUTING CON TRACTS AS SUB - CONTRACTOR. WHILE FILING RETURN HE DISCLOSED INCOME AT RS.2,51,470. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME, HAVING PASSED THE ORDER OF ASSESSMENT U/S.144 OF THE INCOME - TAX ACT,1961, @8% OF THE CONTRACT R ECEIPTS. THE ESTIMATION RESULTED IN ENHANCEMENT TO THE RETURNED INCOME FROM RS.2,51,470 TO RS.10,00,050. 3. AGGRIEVED, THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY. HE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE APPELLANT BEFORE HIM AND TAKIN G RECOURSE TO THE PROVISIONS OF SECTION 44AD AND ALSO THE FACT THAT THE ASSESSEE HAD NOT CHALLENGED THE BEST JUDGEMENT ORDER U/S.144 , PARTLY GRANTED RELIEF TO THE ASSESSEE BY ESTIMATING THE NET PROFIT AT 6% OF THE TOTAL TURNOVER. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY CRITERIA SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT / I.TA.NO . 278/CTK/2009 2 BEING A SUB - CONTRACTOR THE ESTIMATION, IF AT ALL, WAS TO BE RESORTED TO, ON REJECTION OF BOOKS OF ACCOUNT, WOULD HAVE RES ULTED IN ESTIMATING THE NP @4% IN VIEW OF THE FACT THAT IT IS UNDISPUTED ACCEPTANCE OF THE ASSESSEE BEING A SUB - CONTRACTOR. HE POINTED OUT THAT THE LEARNED HAD ACCEPTED THE FACT THAT PROVISIONS OF SECTION 44AD IS APPLICABLE TO A CONTRACTOR AND THEREFORE IN CONSEQUENCE THERETO A SUB - CONTRACTOR SHOULD BE ASSESSED AT 4% NP WHICH HE IN HIS ORDER GAVE PART RELIEF ESTIMATING IT AT 6%. THE LEARNED DR OPPOSED THE CONTENTIONS OF THE LEARNED COUNSEL OF THE ASSESSEE INDICATING THAT THE LEARNED CIT(A) HAD CONSIDERED TH E FAC TS OF THE ASSESSEES CASE BY OBSERVING THAT THERE CANNOT BE ANY HARD AND F AST RULE ABOUT APPLYING ONE PARTICULAR RATE FOR ESTIMATION OF NET PROFIT. HE FULLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) FOR HIS PART OF SUBMISSIONS. 5. IN THE LIGHT OF THE ABOVE SAID, WE ARE INCLINED TO UPHOLD THE ORDER OF THE LEARNED CIT(A) IN GIVING PART RELIEF TO THE ASSESSEE BY ESTIMATING THE NP/INCOME AT 6% OF THE TURNOVER IN VIEW OF THE FACT THAT THE ASSESSMENT WAS FRAMED UNDER THE PROVISIONS OF SECTION 144 OF THE ACT AGAINST WHICH NO MATERIAL HAS BEEN BROUGHT ON RECORD EITHER BEFORE THE LEARNED CIT(A) OR BEFORE THE TRIBUNAL FOR HOLDING INCOME OF A SUB - CONTRACTOR EXACTLY HALF OF THAT IN CASE OF CONTRACTOR UNDER THE PROVISIONS OF SECTION 44AD. 6. IN THE RESULT, THE APPEA L FILED BY THE ASSESSEE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 27.07.2010 SD/ SD/ - ( ), D.K.TYAGI JUDICIAL MEMBER (K.K.GUPTA), ACCOUNTANT MEMBER. DATE: 27.07.2010 ( /) H.K.PADHEE SENIOR.PRIVATE SECRETARY. / I.TA.NO . 278/CTK/2009 3 - COPY OF THE ORDER FORWARDED TO : / THE APPELLANT : SRI BALARAJ SINGH, C/O. S.K.ACHARYA & ASSOCIATE, AT: VIYA SARANI,MAH ATAB ROAD, A.D.MARKET, CUTTACK 12 / THE RESPONDENT : INCOME - TAX OFFICER, WARD 2, DHENKANAL THE CIT, THE CIT(A), DR, CUTTACK BENCH GUARD FILE TRUE COPY , BY ORDER , [ ] SENIOR PRIVATE SECRETARY