Assistant Commissioner of Income tax, V. Mohan Bal Kasar, Ratnagiri

ITA 2981/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5836 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SABHANA PARVEEN
• Assessee Lawyers: SANJAY M VHANBATTE
• Keywords: Corroborative evidences; Tax effect
• Section: 68; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 2981 /PUN/201 6 / ASSESSMENT YEAR : 201 0 - 1 1 THE ASST. COMMISSIONER OF INCOME TAX, RATNAGIRI CIRCLE, RATNAGIRI ....... / APPELLANT / V/S. MOHAN BAL KASAR PROP. OF M/S. KASAR CONSTRUCTION, 28, PUSHKARAJ COMPLEX, BAHADURSHAIKH NAKA, CHIPLUN, DIST. RATNAGIRI PAN : A MZPK0086M / RESPONDENT APPELLANT BY : MS. SABHANA PARVEEN RESPONDENT BY : SHRI SANJAY M. VHANBATTE / DATE OF HEARING : 30 .0 1 .201 9 / DATE OF PRONOUNCEMENT : 30 .0 1 .201 9 / ORDER PER D. KARUNAKARA RAO, AM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF C IT(A) - 2 , KOLHAPUR , DATED 24 - 1 0 - 201 6 FOR THE A.Y. 201 0 - 1 1 . 2. GROUNDS RAISED BY THE REV E NUE ARE EXTRACTED BELOW : (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN ASSESSING THE NET PROFIT @ 1 % ON THE GROSS CONTRACT RECEIPTS FROM L&T THEREBY ALLOWING EXPENDITURE OF RS.7,03,38,456 / - WHICH THE ASSESSEE COULD NOT PROVE BEFORE THE AO AS WELL AS CIT(A). 2 ITA NO. 2981 /PUN/201 6 MOHAN B. KASAR (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF EXPENDITURE OF RS.7,03,38,456/ - OUT OF CONTRACT RECEIP TS FROM L&T ALTHOUGH THE ASSESSEE COULD NOT FURNISH ANY BOOKS OF ACCOUNTS AND ANY SUPPORTING EVIDENCE. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE EXPENDITURE OF RS.7,03,38,456/ - OUT OF CONTRACT R ECEIPTS FROM L&T SINCE NONE OF PARTIES CONFIRMED THE EXPENDITURE OUT OF 21 MAJOR PAYMENTS VERIFIED BY THE AO. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITIONS OF RS.3,96,000 / - ON ACCOUNT OF U NACCOUNTED CASH CREDITS BY ADMITTING FRESH EVIDENCE WITHOUT GIVING OPPORTUNITY TO THE AO UNDER RULE 46A. (5) THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 2, KOLHAPUR BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.10,46,190/ - . IN THE FIRST ROUND OF ASSESSMENT PROCEEDINGS , AO COMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE ACT BY DETERMINING TOTAL INCOME OF ASSESSEE AT RS.72,64,433/ - BY MAKING ADDITION ON ACCOUNT OF ESTIMATION OF NET PROFIT FROM CONTRACT BUSINESS AT RS.67,03,433/ - AND DISALLOWANCE UNDER SECTION 68 OF THE ACT. THE MATTER TRAVELLED TO THE TRIBUNAL AND THE TRIBUNAL SET ASIDE THE ISSUE TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE AND DECIDE THE CASE. IN COMPLIANCE WITH THE DIRECTIONS OF TRIBUNAL, THE ASSESSING OFFICER COMPLETED THE ASSESSM ENT AND COMPUTED THE TOTAL INCOME AT RS.72,64,433/ - BY MAKING ADDITION ON ACCOUNT OF ESTIMATION OF NET PROFIT FROM CONTRACT BUSINESS AT RS.67,03,433/ - AND DISALLOWANCE UNDER SECTION 68 OF THE ACT. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) PARTLY ALLO WED THE CLAIM OF ASSESSEE . AGGRIEVED WITH THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US WITH THE GROUNDS REFERRED ABOVE. 3 ITA NO. 2981 /PUN/201 6 MOHAN B. KASAR 4 . AT THE OUTSET, LD. AR FOR THE ASSESSEE SUBMITTED THAT THE APPEAL FILED BY THE DEPARTMENT IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT. THE LD . AR POINTED THAT AS PER CBDT CIRCULAR NO.3 /201 8 DATED 11 TH JULY, 2018 , THE MONETARY LIMIT FOR FILING OF APPEAL BY THE DEPARTMENT BEFORE THE TRIBUNAL IS RS. 20 LAKH S, THEREFORE, THE APPEAL FILED BY THE DEPARTMENT IS NOT MAINTAINABLE. 5 . ON THE OTHER HAND, THE LD. DR FOR THE REVENU E DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE FINDINGS OF THE CIT(A) . HOWEVER, THE L D. DR FAIRLY ADMITTED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.2 0 LAKHS . 6 . BOTH SIDES HEARD. ON GOING THROUGH THE FACTS OF THE CASE AND THE ORDERS OF THE REVENUE, T HE TOTAL TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS UNDISPUTEDLY LESS THAN RS.2 0 LAKHS. THE CBDT CIRCU LAR NO. 3 /201 8 DATED 11 TH JULY, 2018 RAISED THE MONETARY LIMIT OF TAX EFFECT FOR FILING OF APPEAL BY THE DEPART MENT BEFORE THE TRIBUNAL TO RS. 2 0 LAKHS. THE CIRCULAR APPLIES TO THE PENDING APPEALS OF THE DEPARTMENT BEFORE THE TRIBUNAL TOO . THUS, IN VIEW OF THE CBDT CIRCULAR , WE ARE OF THE OPINION THAT THE PRESENT APPEAL OF THE REVENUE IS LIABLE TO BE DISMISS ED ON ACCOUNT OF LOW TAX EFFECT WITHOUT GOING INTO THE MERITS OF THE CASE. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 30 TH DAY OF JANUARY , 201 9 . SD/ - SD/ - ( /V IKAS AWASTHY ) ( . / D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 3 0 TH JANUARY , 201 9 . GCVSR 4 ITA NO. 2981 /PUN/201 6 MOHAN B. KASAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS) - 2 , KOLHAPUR 4. THE PR. CIT - 2 , KOLHAPUR 5. , , BENCH A PUNE . 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE