M/s Ram Kumar, Kurukshetra V. ITO, Kurukshetra

ITA 31/CHANDI/2012

• Counselvise Citation: 3121514 RSA 2012
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTA
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BEN CH B BEFORE MS. SUSHMA CHOWLA, JM AND SHRI MEHAR SINGH, AM ITA NO. 31/CHD/2012 ASSESSMENT YEAR 2008-09 RAM KUMAR, VPO JHANSA V. I.T.O. WARD 2, KURUKSHET RA KURUKSHETRA PAN: AACFR 3025 L (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING: 15.2.2012 DATE OF PRONOUNCEMENT: 15.03.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE, FOR ASSE SSMENT YEAR 2008-09, IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), KARNAL DATED 3.10.2011 U/S 250(6) OF THE INCOME-TAX ACT (I N SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 THE ORDER CONFIRMED BY THE LD. CIT(A) IS NULL A ND VOID AND AGAINST THE LAW OF NATURAL JUSTICE. 2. THE LD. CIT(A) ERRED IN LAW BY CONFIRMING THE IS SUE OF REJECTION OF ACCOUNT BOOKS WHICH IS PROPERLY MAINTA INED AND PRODUCED BEFORE THE LD. CIT(A) DURING PROCEEDINGS. 3. THE LD. CIT(A) WRONGLY CONFIRMED THE ORDER PASSE D BY THE AO BY APPLYING THE RATE OF 12% WHICH IS AGAIN A GAINST THE LAW AS ALL VOUCHERS ALONG WITH BOOKS OF ACCOUNT ARE PRODUCED BEFORE THE LD. CIT(A) AGAIN AND AT THE TIME OF PROC EEDINGS OF APPEAL. 4. THE LD. CIT(A) ERRED IN LAW BY CONFIRMING THE CA SE REFERRED BY AO WHICH IS OF TRADING BUSINESS OUTSIDE INDIA WITH CONTRACTOR. 5. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, DELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. GROUND NOS. 1 AND 4 ARE GENERAL IN NATURE AND HE NCE NEED NO SEPARATE ADJUDICATION. THUS, THE SAME ARE DISMISSE D. 2 3. THE ASSESSEE IS A CIVIL CONTRACTOR AND IS ENGAG ED IN THE BUSINESS OF EXECUTING WORKS OF HARYANA STATE. THE A O OBSERVED THAT THE ASSESSEE FAILED TO MAINTAIN PROPERLY THE MUSTER-ROLL. THE ASSESSEE FURNISHED PHOTOCOPIES OF THE REGISTER. THE SE PHOTOCOPIES DID NOT CONTAIN PROPER PARTICULARS OF THE LABOURERS . IT WAS, FURTHER, OBSERVED BY THE AO THAT THE ASSESSEE FAILED TO PROD UCE THE BILLS OF PURCHASE OF STONE CONCRETE, SAND AND SOIL. THE AO FOUND THAT THE RELIABILITY OF SUCH SELF-MADE VOUCHERS IS IN DOUBT. SIMILAR OBSERVATIONS WERE GIVEN BY THE AO, IN RESPECT OF OT HER PURCHASES LIKE ITEMS I.E. BRICKS, DIESEL, ROAD LABOUR EXPENSE S AND MISCELLANEOUS EXPENSES. THE ASSESSEE DID NOT MAINT AIN STOCK REGISTER. ACCORDING THE AO REJECTED THE BOOKS OF A CCOUNT U/S 143(3) OF THE ACT AND ESTIMATED THE INCOME AT 12% OF THE G ROSS RECEIPTS AFTER EXCLUDING SALE TAX AND MATERIAL SUPPLIED BY T HE GOVERNMENT. THE AO PLACED RELIANCE ON THE DECISION IN THE CASE OF PRABHAT KUMAR, CONTRACTOR, SIRSA. THUS THE AO ESTIMATED TH E INCOME AT RS. 16,69,060/- AS AGAINST DECLARED INCOME AT RS. 1,78 ,577/-. 4. IN COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FILED WRITTEN SUBMISSIONS AND CONTENDED THAT HE IS NOT ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR BEING ENGAGED IN THE CONSTRUCTI ON AND REPAIR OF ROADS. THE LD. CIT(A) DID NOT ACCEPT THE PLEA OF T HE ASSESSEE. THE APPELLANT, FURTHER, STATED THAT NON-MAINTENANCE OF STOCK REGISTER COULD NOT BE VALID GROUND FOR REJECTION OF BOOKS OF ACCOUNT, ON THE BASIS OF SOME DECISIONS OF THE TRIBUNALS. THE LD. CIT(A), DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND UPHELD TH E FINDINGS OF AO. 5. WE HAVE CAREFULLY PERUSED THE SUBMISSIONS AND RE LEVANT RECORDS. THE ASSESSEE CHALLENGED THE ESTIMATION OF INCOME @ 12% OF NET RECEIPT. THE ASSESSEE FURTHER SUBMITTED THA T THE TRADING 3 RESULTS AFTER REJECTION OF BOOKS OF ACCOUNT SHOULD BE BASED ON SOME VALID BASIS SUCH AS PAST HISTORY OF THE CASE. COMP ARATIVE CHART FILED BY THE APPELLANT REVEALS THAT PROFIT WAS DECLARED A T 8.27% IN AY 2006-07, AT 6.06% IN AY 2007-08 AND 2.57% IN AY 200 8-09. THE AO PLACED RELIANCE ON THE DECISION OF PRABHAT KUMAR, C ONTRACTOR, SIRSA AS INDICATED EARLIER WHICH WAS UPHELD BY THE HON'BL E JURISDICTIONAL HIGH COURT AND ESTIMATED THE INCOME OF THE ASSESSEE . THE FACT SITUATION OF THE PRESENT CASE IS NOT IDENTICAL TO T HE FACT SITUATION IN THE CASE OF PRABHAT KUMAR (SUPRA), HENCE, THE CASE RELIED UPON IS FACTUALLY DIFFERENT AND DISTINGUISHABLE. THE ESTIM ATE AFTER REJECTION OF BOOKS OF ACCOUNT IS REQUIRED TO BE MADE ON TANGI BLE, CREDIBLE AND OBJECTIVE CRITERIA. THIS VIEW IS SUPPORTED BY A PL ETHORA OF JUDICIAL DECISIONS. IT IS WELL SETTLED PROPOSITION THAT THE RE CAN BE AN ELEMENT OF GUESS, IN ESTIMATING THE INCOME. HOWEVER, THE S AME SHOULD NOT BE PURELY ARBITRARY AND BASED ON SURMISES AND CONJE CTURES. HAVING REGARD TO THE PAST HISTORY OF THE CASE, WE ARE OF T HE CONSIDERED OPINION THAT THE END OF JUSTICE WOULD BE SERVED, I F 7% NET PROFIT IS ADOPTED, AS INCOME OF THE ASSESSEE. ACCORDINGLY, T HE RELIEF IS GIVEN TO THE ASSESSEE AND THE AO IS DIRECTED TO RECOMPUTE THE INCOME OF THE ASSESSEE. THE ASSESSEE GETS PART RELIEF. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 15 .03.2012 SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNANT MEMBER CHANDIGARH, THE 15 .03.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE CIT(A)/THE DR 4