Shri. Awdhoot M. Shirpure, Nagpur V. Income tax Officer,Ward 8(1), Nagpur

ITA 302/NAG/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2191 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D RAVI KUMAR
• Keywords: Presumptive income; Business income
• Section: 44AD

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 302 /NAG/20 1 2 ASSESSMENT YEAR: 200 7 - 20 08 SHRI AWDHOOT M. SHIRPURE 302, DAHIPURA, MEDICAL SQUAR E, UNTKHANA, NAGPUR - 440003 PAN:A KBPS5966L VS INCOME TAX OFFICER WARD 8 (1), DR. AMBEDKAR BHAWAN, SEMINARY HILLS, NAGPUR - 44000 6 (APPELLANT) (RESPONDENT) I.T.A. NO. 325 /NAG/201 2 ASSESSMENT YEAR: 200 8 - 20 09 SHRI VISHAL RACHALWAR 204, DAHIPURA, MEDIC AL SQUARE, UNTKHANA, NAGPUR - 440003 PAN:A DQPR9886E VS INCOME TAX OFFICER WARD 8(1), DR. AMBEDKAR BHAWAN, SEMINARY HILLS, NAGPUR - 440006 (APPELLANT) (RESPONDENT) I.T.A. NO. 326 /NAG/201 2 ASSESSMENT YEAR: 200 7 - 20 08 SHRI SANJAY D.PAREKAR 905, B - WING, LOKMAT BHAWAN , WARDHA RD,NAGPUR - 440010 PAN:A JJPP9654P VS INCOME TAX OFFICER WARD 8(1), DR. AMBEDKAR BHAWAN, SEMINARY HILLS, NAGPUR - 440006 (APPELLANT) (RESPONDENT) I.T.A. NO. 327 & 328 /NAG/201 2 ASSESSMENT YEAR: 200 7 - 20 0 8 AND 2008 - 09 SHRI SANJAY R.M ALANI 405, SHREERAM PALACE, DHANTOLI WARDHA RD,NAGPUR - 440012 PAN:A HGPM7315P VS INCOME TAX OFFICER WARD 8(1), DR. AMBEDKAR BHAWAN, SEMINARY HILLS, NAGPUR - 440006 (APPELLANT) (RESPONDENT) - 2 - ITA NO. 302, 325 TO 328,330 & 331 /NAG/201 2 I.T.A. NO. 330/NAG/2012 ASSESSMENT YEAR: 200 7 - 08 & I.T.A. NO. 331 /NAG/2012 ASSESSMENT YEAR: 200 8 - 09 SHRI S AMIR S. RACHALWAR 15A, RAMCHANDRA APTS, PANDE LAYOUT, KHAMLA , NAGPUR - 440015 PAN: AKTPR0982P VS INCOME TAX OFFICER WARD 8(1), DR. AMBEDKAR BHAWAN, SEMINARY HILLS, NAGPUR - 440006 (APPELLANT) (RESPONDENT) APPELLA NT BY SHRI K.P. DEWANI, A.R. RESPONDENT BY SHRI D.RAVIKUMAR, D.R. DATE OF HEARING: 04 - 0 5 - 201 6 DATE OF PRONOUNCEMENT: - 31 /05 /2016 O R D E R PER MUKUL K. SHRAWAT, J.M. ALL THESE SEVEN APPEALS HAVE BEEN FILED BY THE RESPECTIVE APPELLANTS RAISING THE IDENTICAL GROUNDS PERTAINING TO THE DETERMINATION OF BUSINESS INCOME O N ESTIMATE BASIS. AS PER THE MAIN GROUND IT IS OBJECTED THAT LD. CIT (A) HAD ERRED IN CONFIRMING BUSINESS INCOME ASSESSED BY AO ON ESTIMATE BASIS. THESE APPELLANTS ARE STATED TO BE SU B - CONTRACTORS OF BHANGDIYA GROUP OF CASES. A CONTRACT WORK WAS ASSIGNED IN RESPECT OF IRRIGATION DEPARTMENT RELATING TO CANAL IRRIGATION PROJECT. THERE ARE NUMBER OF ENTITIES AND SEVERAL PERSONS ASSOCIATED OF THE SAID GROUP. THE FIRST APPELLATE AUTHORITY H AS LISTED THE NAMES OF ALL THOSE PARTIES. AS FAR AS THE QUESTION OF ESTIMATION OF INCOME IS CONCERNED, IN IDENTICAL MANNER THE AO HAD ASSESSED THE INCOME @10% IN THE HAND OF THESE APPELLANTS. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY , THE LD. CIT(A) HAS RESTRICTED THE PROFIT AT 8%. 2. IN ONE APPEAL OF THIS GROUP NAMELY SHRI NARESH B. MAS RAM BEARING ITA NO.292/NAG/2012 FOR A.Y.2007 - 08 VIDE ORDER DATED 26/02/2016 ITAT, NAGP UR BENCH HAS DIRECTED TO ASSESS THE PROFIT @5% OF THE TURNOVER. RELEVANT PORTION OF THE ORDER IS REPRODUCED BELOW: - WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A SUB CONTRACTOR OF BHANGADIYA GROUP. HE SUBMITTED THAT IN THE CASE OF BHANGADIY A GROUP THEY HAVE DISCLOSED SUBSTANTIAL AMOUNT OF INCOME WHICH WAS AS HIGH AS 12% GROSS PROFIT. HE SUBMITTED THAT THE HUGE AMOUNT OFFERED / ACCEPTED FOR TAXATION BY BHANGADIYA GROUP WAS ALSO ON THE PREMISE THAT TAXES WERE BEING PAID EVEN IN CASE OF SUB CON TRACTOR PAYMENTS. HENCE LEARNED COUNSEL SUBMITTED THAT THIS ASSESSEE BEING A SUB CONTRACTOR SHOULD NOT BE FURTHER PENALISED MERELY BECAUSE SOME - 3 - ITA NO. 302, 325 TO 328,330 & 331 /NAG/201 2 VOUCHERS WERE NOT AVAILABLE. LEARNED COUNSEL SUBMITTED THAT AS EVIDENT FROM THE AOS ORDER IT IS CLEAR THAT BOOK S OF ACCOUNTS AND VOUCHERS HAVE BEEN PRODUCED. HE SUBMITTED THAT THE AO HAS FOUND ONLY SOME SHORT COMINGS. HE SUBMITTED THAT THE AO HAS NOT EVEN BOTHERED TO QUANTIFY THE DISCREPANCIES FOUND. HE FURTHER SUBMITTED THAT THE AO HAS NOT MADE ANY COMPARISON OF T HE PROFIT DECLARED WITH PREVALENT IN THE INDUSTRY OR THAT ACCEPTED BY THE DEPARTMENT IN THE PRECEDING YEARS. HENCE LEARNED COUNSEL PLEADED THAT SOME DISALLOWANCES CAN BE MADE FOR SOME MISSING VOUCHERS BUT BY NO MEANS AN EXCESSIVE ESTIMATE OF 8% OF GROSS PR OFIT SHOULD BE DONE. 6. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT BOOKS OF ACCOUNTS AND VOUCHERS HAVE BEEN PRODUCED BEFORE THE AO. THE AO HAS NOTICED THAT SEVERAL VOUCHERS WERE NOT AVAILABLE AND IN SOME CASES SELF MADE VOUCHERS WERE PROVIDED. NO QUANTIFICATION OF THE AMOUNT INVOLVED IN THESE VOUCHERS HAS BEEN DONE. THE AO HAS FURTHER NOTED THAT THE ASSESSEE IN THE CASE OF SURVEY IN THE CASE OF BHANGADIYA GROUP HAS ADMITTED THE DISCREPANCIES AND INFIRMITIES IN ITS BOOKS OF ACCOUNTS. THE AO HAS FOUND THE ABOVE AS GOOD REASON FOR REJECTING THE BOOKS OF ACCOUNTS. WE FURTHER NOTE THAT THE LEARNED CIT(APPEALS) ALSO HAS NOT SPECIFICALLY DEALT WITH THE CASE OF THE ASSESSEE. HIS ORDER IS TOTALLY DEVOID OF THE SPECIFIC FACTS AND THE AOS ORDER IN THIS CASE. RATHER HE HAS PASSED AN ORDER AS IF HE IS DEALING WITH SCORES OF SUB CONTRACTORS OF BHANGADIYA GROUP. 8. BE THAT AS IT MAY, WE FIND THAT THE PROFI T DISCLOSED BY THE ASSESSEE IS EXTR EMELY LOW. WHEN THIS IS COUPLED WITH THE FACT THAT PROPER SUPPORTING VOUCHERS ARE NOT AVAILABLE, WE ARE CONSTRAINED TO OBSERVE THAT AN ESTIMATE OF INCOME IS CALLED FOR. HOWEVER, WE NOTE THAT THE AO HAS NOT GIVEN ANY COGEN T BASIS FOR MAKING AN ESTIMATE OF PROFIT OF 10%. LEARNED CIT(APPEALS) HAS MADE AN ESTIMATE OF 8% WHICH TO SOME EXTENT DRAWS SUPPORT FROM PROVISIONS OF SECTION 44AD WHICH PROVIDES THAT PRESUMPTIVE TAXATION AT THE RATE OF 8% OF BUSINESS IS GENERAL. HOWEVER, SINCE IN THE PRESENT CASE THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNTS AND SOME VOUCHERS, IN OUR CONSIDERED OPINION, ESTIMATE OF 5% OF THE TOTAL TURNOVER AS PROFIT OF THE YEAR WILL SERVE THE ENDS OF JUSTICE. ACCORDINGLY WE MODIFY THE ORDERS OF AUTHORIT IES BELOW AND HOLD THAT 5% ESTIMATE OF PROFIT SHOULD BE MADE IN THIS CASE. 3. SINCE ON IDENTICAL FACTS AND CIRCUMSTANCES, A VIEW HAS ALREADY BEEN TAKEN BY THIS BENCH , H ENCE ON THE SAME LI N ES WE HEREBY DIRECT TO ADOPT THE PROFIT @5% ON THE TURNOVER TO BE ASSESSED RESPECTIVELY IN THE HANDS OF THESE APPELLANTS. SINCE PART RELIEF HAS BEEN GRANTED, THEREFORE THE GROUNDS RAISED ARE PART L Y ALLOWED. 13. I N THE RESULT , ALL T H E S E APPEAL S OF THE RESPECTIVE APPELLANTS ARE HEREBY PART L Y ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON THIS 31 ST DAY OF MAY , 2016 SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: - 31 / 05 /2016 - 4 - ITA NO. 302, 325 TO 328,330 & 331 /NAG/201 2 MANGESH BODKHE/ SR. PS COPY FORWARDED TO : 1. SHRI AWDHOOT M. SHIRPURE 302, DAHIPURA, ME DICAL SQUARE, UNTKHANA, NAGPUR - 440003 2. INCOME TAX OFFICER , WARD 8(1), DR. AMBEDKAR BHAWAN, SEMINARY HILLS, NAGPUR - 440006 3. C.I.T. - IV,NAGPUR 4. CIT ( APPEALS) - I I , NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR MANGESH BODKHE/SR. PS (JM SIR)