Appeal details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 9200 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 1 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-02-2017
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
D
Next Hearing Date
22-02-2017
Assessment Year
2009-2010
Appeal Filed On
26-12-2013
Judgement Text
, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.3089/AHD/2013 AND ITA.NO.3122/AHD/2013 / ASSTT. YEAR: 2009-2010 FATEHSINHMOHANSINHCHAUHAN HAVELI, SWAMINARAYANMARGSILVASA. PIN 396230 PAN : ABPPC6997C VS DCIT, CENTRAL CIRCLE - 2, SURAT ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI HARDIKVORA, A R REVENUE BY : SHRI OM PRAKASHMEENA, SR.DR / DATE OF HEARING : 22/02/2017 / DATE OF PRONOUNCEMENT: 23/02/2017 $%/ O R D E R PER BENCH: THEASSESSEE AND REVENUE ARE IN CROSS APPEAL AGAINST THE ORDER OF CIT(A)-II, SURAT, DATED 10/10/2013 PASSED FOR THE ASSTT. YEAR 2009-10. 2. THE GRIEVANCE OF THE REVENUE IS THAT LD.CIT(A) H AS ERRED IN DELETING THE ADDITION OF RS.13,00,000/- WHICH WAS A DDED BY THE AO WITH THE AID OF SECTION 68 OF THE INCOME TAX, ACT, 1961. ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 2 3. WITH THE ASSISTANCE OF LD. REPRESENTATIVES WE HA VE GONE THROUGH THE RECORD. WE FIND THAT THE APPEAL OF THE REVENUE WASPRESENTED ON 30/12/2013. ON 10.12.2015 THE CBDT HAS ISSUED INST RUCTIONS BEARING NO. 21/2015 PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT (A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RET ROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRESENT CASE, TOTAL ADDITION DELETED BY THE LD.CIT(A) IS OF RS.13,00,000/- WHICH WAS CHALLENGED BY THE REVENUE IN THE PRESENT APPEAL. IN ACCORDANCE WITH THE ABOVE CBDT CIRCULAR THE TAX EFFECT ON THE IMPUGNED DELETION OF ADDITION WOULD BE LESS THA N RS.10 LAKHS, AND THEREFORE, THE PRESENT APPEAL OF THE REVENUE DESERV ES TO BE DISMISSED BEING TREATED TO BE FILED IN VIOLATION OF CBDT INST RUCTIONS. FURTHER, THE CASE DOES NOT FALL WITHIN THE AMBIT OF EXCEPTIONS P ROVIDED IN THE INSTRUCTIONS. IT IS FURTHER OBSERVED THAT SINCE, W HILE HEARING THE APPEALS, SUCH FACTORS COULD NOT BE CROSS-VERIFIED, THEREFOR E, IN CASE, ON RE- VERIFICATION AT THE END OF THE AO, IT CAME TO THE N OTICE THAT THE TAX EFFECT IS MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATIO N SHOULD BE FILED WITHIN TIME LIMIT. IN VIEW OF THE ABOVE, THE APPEAL OF TH E REVENUE IS DISMISSED. ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 3 4. NOW, WE TAKE THE APPEAL OF THE ASSESSEE, THE GRI EVANCE OF THE ASSESSE IS THAT LD.CIT(A), HAS ERRED IN CONFIRMING ADHOC DISALLOWANCE OF RS15,79,749/- OUT OF THE LAND DEVELOPMENT EXPENSES. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 30/09/2009 DECLARING TOTAL INCOME OF R S.2,15,16,828/- THE CASE WAS SELECTED FOR SCRUTINY, ASSESSMENT AND A NOTICE UNDER SECTION 143(2) AND 142(1) WAS ISSUED AND SERVED UPO N THE ASSESSEE. IT EMERGES OUT FROM THE RECORD THAT ASSESSEE AT THE RE LEVANT TIME WAS ENGAGED IN THE BUSINESS OF PURCHASING LAND, DEVELOP ING IT AND SELLING THE SAME. THIS BUSINESS WAS CARRIED OUT IN THE NAME OF M/S.HAVELI ENTERPRISES. THE ASSESSEE HAS DEBITED SUM OF RS.63, 18,996/- TOWARD LAND DEVELOPMENT EXPENDITURE, IT IS THE CASE OF ASSESSEE THAT SUM OF RS.63,18,996/- WAS PAID TO THE NINE INDIVIDUALS, WH O HAVE CARRIED OUT LAND DEVELOPMENT ACTIVITIES ON BEHALF OF THE ASSES SEE. IN THE OTHER WORDS THESE ARE THE EXPENDITURES INCURRED BY THEASSESSEE. ACCORDING TO THE LD.AO, THE ASSESSEE FAILED TO FURNISH SUFFICIENT EV IDENCE WHICH CAN BUTTRESS HIS CLAIM FOR THE EXPENDITURE. ACCORDINGLY , HE DISALLOWED 25% OF THE TOTAL EXPENDITURE BY MAKING FOLLOWING OBSERV ATIONS. 9.8 SSUE OF UNVERIFIABLE & UNCONFIRMED EXPENDITURE S: HENCE, IT IS SETTLED AS PER DISCUSSION ABOVE THAT T HE EXPENDITURES SHOWN BY THE ASSESSEE VERIFIABLE AND UNSUBSTANTIATED AND HAV E NOT BEEN CROSS- CONFIRMED PROPERLY. EVEN DURING THE ENTIRE ASSESSM ENT PROCEEDINGS, THE ASSESSEE HAS FAILED TO FURNISH THE PROPER ADDRESS O F THE PARTIES AND THE IT RETURNS. ALSO THAT, THE BURDEN RESTED ON ASSESSETO PROVE AND ESTABLISH THAT THE EXPENDITURE HAS BEEN ACTUALLY INCURRED AND LAID OUT 'WHOLLY EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND SOME BUSINESS RELAT ED SERVICES HAVE ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 4 OBTAINED IN RETURN. HOWEVER, THE ASSESSEE HAS FAILE D TO PERFORM THE ONUS CAST UNDER SECTION 37 OF THE I.T. ACT AND HAS ATTEM PTED TO SHIFT THE ONUS TO REVENUE . SUCH AN ACTION IS NOT SUSTAINABLE. IN SUC HG A SCENARIO IT IS LOGICAL TO HOLD THAT THE ASSESSE MUST HAVE MADE LAND DEVELO PMENT EXPENDITURES IN OPEN LABOUR MARKET FOR BENEFITS LIKE BETTER CONT ROL, GREATER BARGAINING POWER ETC., TIMELY COMPLETION OF WORKS ETC AND OTHE R CAUSES BEST KNOWN TO THE ASSESSE AND NOT DISCLOSED BEFORE REVENUE. THIS REASONING IS AKIN TO AND IN CONSONANCE TO THE LOGIC APPLIED BY THE JURIS DICTIONAL I.T.A.T IN THE LANDMARK CASE OF VIJAY PROTEINS LTD. CO. V. A. C.I. T. 58 ITD 428, (AHD). HENCE RELIANCE IS PLACED ON THE DECISION OF HONBLE JURISDICTIONAL I.T.A.T IN THE CASE OF VIJAY PROTEINS LTD. (SUPRA), WHEREIN IT HAS BEEN HELD THAT OWING TO NON-VERIFIABILITY OF CLAIMED EXPENDITURES, 25% O F THE CLAIM CAN BE REASONABLE AMOUNT OF DISALLOWANCE. 9.9 THUS, CONSIDERING THE TOTALITY OF FACTS AND CIR CUMSTANCES OF THE CASE AND IN VIEW OF THE DECISION OF HONBLE JURISDICTION AL I.T.A.T., AHMEDABAD IN THE CASE OF VIJAY PROTEINS LTD.(SUPRA), IT WOULD BE FAIR AND REASONABLE TO DISALLOW 25% OF THE EXPENDITURE CLAIMS OF 63,18,996 /- AS SHOWN IN RESPECT OF THE ABOVE DISCUSSED CONCERNS ON ACCOUNT OF UNVER IFIABLE EXPENDITURES. THE DIS ALLOWANCE ON THIS ACCOUNT WORKS TORS.15,79, 749/- BEING 25% OF THE AGGREGATE. THE SAME IS , THEREFORE, DISALLOWED AND ADDED BACK TO THE TAXABLE INCOME OF THE ASSESSE ON ACCOUNT OF BEING U NVERIFIABLE AND UNSUBSTANTIATED. 9.10 THUS, FROM THE ABOVE DISCUSSION, IT IS EVIDENT THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS BY INFLATING AND O VER-REPORTING THE EXPENDITURES DEDUCTIBLE IN BUSINESS. THE ENSUING IN COME HAS BEEN UNDER- REPORTED BY THIS FUNCTIONING OF INACCURATE PARTICUL ARS. THEREFORE, SATISFIED ON ACCOUNT OF THESE REASONS AS ABOVE, PENALTY PROCEEDI NG U/S.271(1)(C) IS BEING INITIATED FOR FURNISHING INACCURATE PARTICULA RS OF INCOME. GROUND NO.1: REJECTION OF UNVERIFIABLE EXPENDITURE CLAIMS:RS.15,79,749/- 6. APPEAL TO THE CIT(A), DID NOT BRING ANY RELIEF T O THE ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBM ITTED THAT THOUGH THE ASSESSEE HAS FILED SUFFICIENT EVIDENCES, NAMELY, C ONFIRMATION ADDRESSES OF THE ALLEGED NINE PERSONS. POSTAL AUTHORITIES HAV E AFFECTED THE SERVICE OF SUMMONS ISSUED BY THE AO ON 6 PERSONS, BUT AT T HIS STAGE THE ASSESSEE DOES NOT WANT TO AGITATE ALL THESE ISSUES AND ONLY PRESSED GROUND FOR ESTIMATION OF DISALLOWANCE AT 25% OF THE TOTAL EXPENDITURE. ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 5 THE AO HAS NOT CONSIDERED ANY MATERIAL FOR WORKING OF DISALLOWANCE AT 25% OF THE TOTAL EXPENDITURE. HE FURTHER CONTENDED THAT LD.AO HAS PUT IN SERVICE, DECISION OF ITAT IN THE CASE OF VIJAY PROT EINS LTD. CO. V/S ACIT REPORTED IN 58ITD, PAGE 428. IN THIS CASE THE DISALLOWANCE WAS MADE OUT OF TOTAL PURCHASES. THE ASSESSEE WAS ENGAG ED IN EXTRACTION OF OIL FROM COTTON SEED ETC. THE ASSESSEE COULD NOT PR ODUCE THE DETAILS OF ITS PURCHASES BUT SUBMITTED THE QUANTITATIVE DETAILS OF SALES EXHIBITING THE SALES MADE BY IT. TRIBUNAL FOUND THAT WITHOUT MAKIN G PURCHASE, FINISHED PRODUCT COULD NOT BE PRODUCED BY THE ASSESSEE AND T HEREFORE ASSESSEE MIGHT HAVE INDULGE IN PROCURING RAW MATERIAL FROM X AND PROCURING THE BILLS FROM Y, UNDER THESE CIRCUMSTANCES 25% OF THE TOTAL PURCHASE WERE DISALLOWED. THE NATURE OF BUSINESS AND THE FACTS AR E ALTOGETHER DIFFERENT IN PRESENT CASE. 7. ON THE OTHER HAND LD.DR RELIED UPON THE ORDER O F CIT(A) 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE THROU GH THE RECORD. SECTION 145 OF THE INCOME TAX ACT IS THE RELEVANT PROVISION FOR THIS ISSUE, THEREFORE, IT IS PERTINENT TO TAKE NOTE OF THIS SECTION. IT READS AS UNDER : 145. (1) INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OR 'INCOME FROM OTHER SOURCES' SHALL , SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), BE COMPUTED IN ACCOR DANCE WITH EITHER CASH OR MERCANTILE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 6 (2) THE CENTRAL GOVERNMENT MAY NOTIFY IN THE OFFICI AL GAZETTE FROM TIME TO TIME [ACCOUNTING STANDARDS] TO BE FOLLOWED BY ANY CLASS OF ASSESSEES OR IN RESPECT OF ANY CLASS OF INCOME. (3) WHERE THE ASSESSING OFFICER IS NOT SATISFIED AB OUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE, OR WH ERE THE METHOD OF ACCOUNTING PROVIDED IN SUB-SECTION (1) [OR ACCOUNTI NG STANDARDS AS NOTIFIED UNDER SUB-SECTION (2), HAVE NOT BEEN REGULARLY FOLL OWED BY THE ASSESSEE], THE ASSESSING OFFICER MAY MAKE AN ASSESSMENT IN THE MAN NER PROVIDED IN SECTION 144.] 9. A BARE READING OF SECTION 145 WOULD REVEAL THAT IT PROVIDE THE MECHANISM HOW TO COMPUTE THE INCOME OF THE ASSESSEE . ACCORDING TO SUB-SECTION 1, THE INCOME CHARGEABLE UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION OR INCOME FROM OTHER SOURCE SHALL BE COMPUTED IN ACCORDANCE WITH THE METHOD OF ACCOUNTANCY EMPLOYED BY AN ASSESSEE REGULARLY, SUBJECT TO SUB-SECTION 2 OF SECTION 145 OF THE ACT. SUB-SECTION 2 PROVIDES THAT THE CENTRAL GOVERNMENT MAY NOTIFY I N THE OFFICIAL GAZETTE FROM TIME TO TIME, THE ACCOUNTING STANDARD REQUIRED TO BE FOLLOWED BY ANY CLASS OF ASSESSEE IN RESPECT OF ANY CLASS OF IN COME. THUS, IT INDICATES THAT INCOME HAS TO BE COMPUTED IN ACCORDA NCE WITH THE METHOD OF ACCOUNTANCY FOLLOWED BY AN ASSESSEE I.E. CASH OR MERCANTILE, SUCH METHOD HAS TO BE FOLLOWED KEEPING IN VIEW THE ACCOU NTING STANDARD NOTIFIED BY THE CENTRAL GOVERNMENT FROM TIME TO TIM E. SUB CLAUSE 3 PROVIDES A SITUATION, THAT IS, IF THE ASSESSING OFF ICER IS UNABLE TO DEDUCE THE TRUE INCOME, ON THE BASIS OF METHOD OF ACCOUNTA NCY FOLLOWED BY AN ASSESSEE, THAN, HE CAN REJECT THE BOOK RESULT AND ASSESSEE INCOME ACCORDING TO HIS ESTIMATION OR ACCORDING TO HIS BES T JUDGMENT. THE ASSESSING OFFICER IN THAT CASE IS REQUIRED TO POINT OUT THE DEFECTS IN THE ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 7 ACCOUNTS OF ASSESSEE AND REQUIRED TO SEEK EXPLANATI ON OF THE ASSESSEE QUA THOSE DEFECTS. IF THE ASSESSEE FAILED TO EXPLAI N THE DEFECTS THAN ON THE BASIS OF THE BOOK RESULT, INCOME CANNOT BE DETERMIN ED AND ASSESSING OFFICER WOULD COMPUTE THE INCOME ACCORDING TO HIS E STIMATION KEEPING IN VIEW THE GUIDING FACTOR FOR ESTIMATING SUCH INCO ME. 10. FOR EXERCISING THE BEST JUDGMENT, SECTION 144 O F THE INCOME TAX ACT PROVIDE THE GUIDANCE TO THE LD.AO. THIS SECTIO N READS AS UNDER: 144. [(1)] IF ANY PERSON (A) FAILS TO MAKE THE RETURN REQUIRED [UNDER SUB-S ECTION (1) OF SECTION 139] AND HAS NOT MADE A RETURN OR A REVISED RETURN UNDER SUB- SECTION (4) OR SUB-SECTION (5) OF THAT SECTION, OR (B) FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB- SECTION (1) OF SECTION 142 [OR FAILS TO COMPLY WIT H A DIRECTION ISSUED UNDER SUB-SECTION (2A) OF THAT SECTION], OR (C) HAVING MADE A RETURN, FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB-SECTION (2) OF SECTION 143, THE [ASSESSING] OFFICER, AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH THE [ASSESSING] OFFICER HAS GATHERED, [SHAL L, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, MAKE THE AS SESSMENT] OF THE TOTAL INCOME OR LOSS TO THE BEST OF HIS JUDGMENT AN D DETERMINE THE SUM PAYABLE BY THE ASSESSEE [* * *] ON THE BASIS OF SU CH ASSESSMENT : [PROVIDED THAT SUCH OPPORTUNITY SHALL BE GIVEN BY THE ASSESSING OFFICER BY SERVING A NOTICE CALLING UPON THE ASSESSEE TO SH OW CAUSE, ON A DATE AND TIME TO BE SPECIFIED IN THE NOTICE, WHY THE ASS ESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF HIS JUDGMENT : PROVIDED FURTHER THAT IT SHALL NOT BE NECESSARY TO GIVE SUCH OPPORTUNITY IN A CASE WHERE A NOTICE UNDER SUB-SECTION (1) OF S ECTION 142 HAS BEEN ISSUED PRIOR TO THE MAKING OF AN ASSESSMENT UNDER T HIS SECTION.] ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 8 [(2) THE PROVISIONS OF THIS SECTION AS THEY STOOD I MMEDIATELY BEFORE THEIR AMENDMENT BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 (4 OF 1988), SHALL APPLY TO AND IN RELATION TO ANY ASSESS MENT FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR AND REFERENCES IN THIS SECT ION TO THE OTHER PROVISIONS OF THIS ACT SHALL BE CONSTRUED AS REFERE NCES TO THOSE PROVISIONS AS FOR THE TIME BEING IN FORCE AND APPLI CABLE TO THE RELEVANT ASSESSMENT YEAR.] IT IS PERTINENT TO NOTE THAT THAT SECTION 144 WOULD SUGGEST THAT IN ORDER TO ESTIMATE INCOME, LEARNED ASSESSING OFFICER HAS TO E XERCISE HIS DISCRETION WHICH SHOULD BE IN CONSONANCE WITH BEST OF HIS JUDG MENT. WE ARE CONSCIOUS OF THE FACT THAT IN VARIOUS AUTHORITATIVE PRONOUNCEMENTS, IT HAS BEEN PROPOUNDED THAT IN MAKING A BEST JUDGMENT ASSE SSMENT, THE ASSESSING OFFICER MUST NOT ACT DISHONESTLY OR VINDI CTIVELY OR CAPRICIOUSLY. HE MUST MAKE, WHAT HE HONESTLY BELIEV E TO BE A FAIR ESTIMATE OF THE PROPER FIGURE OF ASSESSMENT AND FOR THIS PURPOSE HE MUST BE ABLE TO TAKE INTO CONSIDERATION, LOCAL KNOWLEDGE , REPUTATION OF THE ASSESSEE ABOUT HIS BUSINESS, THE PREVIOUS HISTORY O F THE ASSESSEE OR THE SIMILARLY SITUATED ASSESSEE. IT IS ALSO PERTINENT T O MENTION THAT JUDGMENT IS A FACULTY TO DECIDE MATTER WITH WISDOM, TRULY AN D LEGALLY. JUDGMENT DOES NOT DEPEND UPON THE ARBITRARY, CAPRICE OF AN A DJUDICATOR, BUT ON SETTLED AND INVARIABLY PRINCIPLES OF JUSTICE. THUS, IN A BEST JUDGMENT, EVEN IF, THERE IS AN ELEMENT OF GUESS WORK, IT SHOU LD NOT BE A WILD ONE, BUT SHALL HAVE REASONABLE NEXUS TO THE AVAILABLE MA TERIAL AND CIRCUMSTANCES OF EACH ASSESSEE. ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 9 11. IN THE LIGHT OF ABOVE LETS EXAMINE THE STAND OF AO. THE FINDING OF AO HAS BEEN EXTRACTED SUPRA. A PERUSAL OF THESE FIN DINGS WOULDINDICATE THAT THE LD.AO HAS NOT DRAWN INTERFERE FROM CASE OF ANY ASSESSEE WHO WAS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT.THE NATURE OF ASSESSE BUSINESS IS ALTOGETHER DIFFERENT. IT IS TO BE SEEN THENATURE OF EXPENDITURE INCURRED AND ELEMENT OF PROFIT INVOLVED IN THE LAND DEVELOPMENT ACTIVITIES, IT CANNOT BE COMPARED WITH THE MANUFACT URING OF OIL, CAKE ETC. THUS DECISION OF VIJAY PROTEINS LTD. CANNOT BE A GU IDING FACTOR FOR ESTIMATING DISALLOWANCE OUT OF EXPENDITURE AT 25% IN A CASE WHERE ACTIVITIES OF ASSESSEE IS OF LAND DEVELOPMENT. SECT ION 44 AD PROVIDES ESTIMATION OF PROFIT AT 8% IN THE CASE OF ASSESSEE WHO WAS ENGAGED IN CONSTRUCTION ACTIVITIES OR DOING CONTRACTUAL JOB. T HOUGH THIS GUIDANCE OF ESTIMATION OF PROFIT AT 8% IS FOR THOSEASSESSEES W HOSE TURNOVER IS LESSTHAN 40 LACS AND WE ARE NOT STRICTLY USING IT , BUT FOR THE PURPOSE OF EXERCISING OUR DISCRETION AS TO FIND OUT WHAT COULD BE ELEMENT OF INFLATION IN CLAIMING EXPENDITURE AT THE END OF ASS ESSE, WE JUST TOOKCOGNIZANCE OF THIS SECTION. TAKING INTO CONSIDE RATION ALL THESE ASPECTS, WE ARE OF THE VIEW THAT END OF JUSTICE WOU LD MEET IF THE EXPENDITURE OUT OF LAND DEVELOPMENT COULD BE ESTIMA TED AT 10% FOR DISALLOWANCE. 12. ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASSESSE E, MODIFY THE ORDER OF LD.REVENUE AUTHORITIES. AO IS DIRECTED TO RESTRI CT THE DISALLOWANCE AT 10% OUT OF THE LAND DEVELOPMENT EXPENDITURE. ITA NO.3089/AHD/2013 WITH CO NO.3122/AHD/2013 FOR ASSESSMENT YEAR 2009-10 10 13. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D AND APPEAL OF THE ASSESSE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 23 RD FEBRUARY, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER TRUE COPY AHMEDABAD; DATED 23/02/2017 $% & ''() *$)' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. $%& '' , / DR, ITAT, 6. &)* + / GUARD FILE. $% + / BY ORDER, ,/ - ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
