M/S Sunil Kumar Bariar, Ranchi V. DCIT CIRCLE-1, Ranchi

ITA 31/RAN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9651 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 13-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY
• Assessee Lawyers: MANJEET KUMAR VERMA
• Keywords: Depreciation; Principle of natural justice; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.31 /RAN/201 7 ASSESSMENT YEAR : 2012 - 2013 M/S. SUNIL KUMAR BARIAR, ANNAT TOWER, RATU ROAD, HEHAL, RANCHI VS. DCIT, CIRCLE - 1, RANCHI PAN/GIR NO. ACEPB 6763 H (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY: SHRI MANJEET KUMAR VERMA, ADV REVENUE BY : SHRI A.K.MOHANTY, JCIT DATE OF HEARING : 30 /05 / 201 8 DATE OF PRONOUNCEMENT : 31 /05/ 2018 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE A GAINST THE ORDER OF THE CIT(A) - RANCHI DATED 17.10.2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2. GROUND NO.1 OF APPEAL IS AGAINST CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN REJECTING BOOKS OF ACCOUNT U/S.145(3) OF THE ACT. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER REJECTED THE BOOKS OF THE ASSESSEE ON THE GROUND THAT IT FAILED TO PRODUCE BILLS AND VOUCHERS RELATING TO CONTRACT WORKS, ALL ITEMS DEBI T ED TO PROFIT AND LOSS ACCOUNT AND SUPPORTING EVIDENCES FOR THE SAME. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. WE FIND THAT BEFORE THE CIT(A), THE ASSESSEE HAD NOT CHALLENGED THE REJECTION OF BOOKS OF ACCOUNT BY THE ASSESSEE. THEREFORE, T HIS GROUND IS NOT ARISING OUT OF THE ORDER OF THE CIT(A). HENCE, THIS GROUND IS DISMISSED. 6. GROUND NO.2 OF APPEAL IS DIRECTED AGAINST THE ESTIMATION OF INCOME OF THE ASSESSEE BY APPLYING RATE OF 8 .5% ON THE GROSS CONTRACT RECEIPT. 7. AFTER REJECTING THE BOOK RESULTS OF THE ASSESSEE, THE ASSESSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE BY APPLYING RATE OF 8.5% ON THE GROSS RECEIPTS FROM CONTRACT WORKS AT RS.11,28,64,641/ - , WHICH WORKED OUT TO RS.95,93,495/ - . 8. BEFORE THE CIT(A), THE ASSESSEE TOOK P LEA THAT THE ASSESSEE HAS OBTAINED CONTRACTS AT BELOW 15% RATES AND, ACCORDINGLY, THE ESTIMATION OF PROFIT @ 8.5% WAS VERY HIGH. THE CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE CANNOT BE ALLOWED TO GAIN FROM NOT FOLLOWING THE MANDATE OF LAW. IF THE APPELLANT CONTENTION WAS THAT THE PROFIT WAS DERIVED FROM AUDITED BOOKS THEN IT WAS ITS DUTY TO PRODUCE ALL EVIDENCES BEFORE THE ASSESSING OFFICER WHICH IT FAILED TO DO. 3 9. BEFORE US, LD A.R. FILED A CHART SHOWING PERCENTAGE OF NET PROFIT EARNED IN THE PRECEDING ASSESSMENT YEAR AND SUBSEQUENT ASSESSMENT YEAR AND SUBMITTED TH AT THE NET PROFIT OF 5.04 % WAS REASONABLE AND SHOULD BE ACCEPTED. 10. ON THE OTHER HAND, LD D.R. OBJECTING TO THE SUBMISSIONS OF LD A.R. SUBMITTED THAT FROM THE CHART, IT WILL BE OBSERVED THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2011 - 12, THE ASSESS E ITSELF HAS SHOWN NET PROFIT AT 7.94% WHEN THE TURNOVER OF THE ASSESSEE WAS RS.112.12 CRORES AS AGAINST THE TURNOVER OF RS.56.92 CRORES IN THE ASSESSMENT YEAR UNDER CONSIDERATION. HENCE, HE PRAYED THAT ORDER OF THE ASSESSING OFFICER IS REASONABLE IN ES TIMATING THE INCOME BY APPLYING THE NET PROFIT AT 8.5% AND THE SAME SHOULD BE UPHELD. 11. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE ASSESSEE DID NOT CHALLENGE THE REJECTION OF BOOK RESULTS BEFORE THE CIT(A). THE ONLY OBJECTION OF THE ASSESSEE IS AGAINST THE ESTIMATION OF INCOME AT THE RATE OF 8.5%. WE FIND TH A T THE ASSESSEE HAD NOT PRODUCED THE BILLS AND VOUCHERS AND OTHER SUPPORTING EVIDENCES IN SUPPORT OF THE EXPENSES CLAIMED AND DEBITED IN THE PR OFIT AND LOSS ACCOUNT. IN ABSENCE OF THE SAME, IN OUR CONSIDERED VIEW, THE INFLATION OF EXPENDITURE CANNOT BE RULED OUT. WE FIND TH A T IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2011 - 12, WHEN THE TURNOVER OF THE ASSESSEE WAS RS.112.12 CRORES, THE A SSESSEE ITSELF HAD SHOWN NET PROFIT AT 7.94%. CONSIDERING THE SAME, IN 4 OUR CONSIDERED VIEW, ESTIMATION OF INCOME BY THE ASSESSING OFFICER 8.5% IS FULLY JUSTIFIED. HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CO NFIRMED AND GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 12. GROUND NOS.3 & 4 ARE AS UNDER: 3. ASSESSING OFFICER NOT REDUCED DEPRECIATION FROM ESTIMATE INCOME, THIS IS AGAINST THE NATURAL JUSTICE. 4. ADDITION ON ACCOUNT OF DISALLOWANCE OF CAPITAL EXPEND ITURE DEBITED TO PROFIT AND LOSS ACCOUNT ATTRACTS DOUBLE TAXATION. 13. NO ARGUMENTS WERE ADVANCED BY LD A.R. OF THE ASSESSEE. HENCE, THESE GROUNDS ARE DISMISSED FOR WANT OF PROSECUTION. 14. GROUND NO. 5 IS AGAINST IMPOSITION OF INTEREST U/S.234B AND 234 OF RS.759734/ - . 15. IN VIEW OF THE DECISION OF HONBLE JHARKHAND HIGH COURT IN THE CASE OF AJAY PRAKASH VERMA, IN T.A. NO.38 OF 2010 REPORTED IN 2013( (1) TMI 140 , THE ASSESSING OFFICER IS DIRECTED TO CHARGE INTEREST ON THE RETURNED INCOME. 16 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRON OUNCED IN THE OPEN COURT ON 3 1 /05 /201 8 S D / - S D / - (PAVAN KUMAR GADALE) (N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER RANCHI; DATED 3 1 /05 /20 1 8 5 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : M/S. SUNIL KUMAR BARIAR, ANNAT TOWER, RATU ROAD, HEHAL, RANCHI 2. THE RESPONDENT: DCIT, CIRCLE - 1, RANCHI 3. THE CIT(A), RANCHI 4. PR. CIT , RANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//