ACIT, New Delhi V. Mana Ram Ganpat Ram & Co., New Delhi

ITA 3346/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7877 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCE E, NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3346 /DEL./2016 (ASSESSMENT YEAR : 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX VS. MANA RAM GANPAT RAM & CO. CYCLE MARKET, JHANDEWALAN, EXTN., CIRCLE-62(1), NEW DELHI NEW DELHI PAN : AAHFM2570Q APPELLANT RESPONDENT ASSESSEE BY : SH. K.V.S.R. KRISHNA, CA, SH. AMAN GOEL, CA REVENUE BY : SMT. RINKU SINGH, SR.DR DATE OF HEARING : 11 .04.2019 DATE OF ORDER : 18.04.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, ASSISTANT COMMISSIONE R OF INCOME TAX, NEW DELHI (HEREINAFTER REFERRED TO AS 'THE REVEN UE') BY FILING THE AFORESAID APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 31/03/2016 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-20, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA THAT : ITA NO. 3346/DEL/2016 (MANA RAM GANPAT RAM & CO.) 2 1IN THE FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 16,00,349 /- ON ACCOUNT OF REJECTION OF BOOKS OF ACCOUNT. 2. IN THE FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 84,60,000/- U/S 68 OF THE I.T.ACT, 1961. 3. THAT THE APPELLANT, CRAVES, LEAVE TO ADD, AMEND OR MODIFY THE GROUNDS OF APPEAL AT ANY TIME. 2. BRIEFLY STATED THAT FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS ENGAGED IN T HE BUSINESS OF CIVIL CONTRACTORS WITH FOUR PARTNERS AND HAS SHOWN NET PROFIT OF RS. 21,51,578/- ON GROSS RECEIPT OF 7,50,38,533/- W ITH NET PROFIT RATE OF 2.86%. AO AFTER REJECTING THE BOOKS OF ACCO UNTS MADE AN ADDITION OF RS. 16,00,349/- IN THE TRADING RESULTS BY APPLYING THE PROFIT RATE AT 5% OF THE CONTRACT RECEIPTS. AO FURT HER MADE ADDITION OF RS. 84,60,000/- ON ACCOUNT OF CASH DEPO SITS IN THE SAVING BANK ACCOUNTS AND THEREBY ASSESSED THE TOTAL INCOME OF ASSESSEE AT RS. 1,25,67,460/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A ) BY WAY OF FILING THE APPEAL WHO HAS DELETED THE ADDITION IN QUESTION BY PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED THE R EVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. ITA NO. 3346/DEL/2016 (MANA RAM GANPAT RAM & CO.) 3 4. THE LD. DR FOR THE REVENUE CHALLENGING THE IMPUG NED ORDER PASSED BY LD. CIT(A) CONTENDED INTER ALIA THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION DESPITE THE FACT THA T HE HAS ACCEPTED THE GP RATE AT 5% ADOPTED BY THE AO; THAT THE BOOK S OF ACCOUNTS HAS NEVER BEEN PRODUCED RATHER LD. CIT(A) HAS ASSUM ED THE FACT THAT ASSESSEES ACCOUNT ARE AUDITED ONE ; THAT WHE N BOOKS OF ACCOUNTS HAVE NOT BEEN PRODUCED HOW THE LD. CIT(A) HAS ACCEPTED THE EXPLANATION OF THE ASSESSEE QUA CASH D EPOSIT OF RS. 84.60 LAKHS. 5. LD. DR FOR THE REVENUE ALSO FILED WRITTEN SUBMIS SIONS WHICH ARE MADE PART OF THE RECORD AND ALSO RELIED U PON DECISION RENDERED BY HONBLE HIGH COURT CITED AS 1. KAVITA CHANDRA VS. CIT [2017] 81 TAXMANN.COM 317 (PUNJAB & HARYANA) / [2017] 248 TAXMAN 358 (PUNJAB & HARYANA) / [2017] 398 ITR 641 (PUNJAB & HARYANA) 2. DINESH KUMAR JAIN VS. PCIT [2018] 97 TAXMANN.COM 113 (DELHI). 6. HOWEVER, ON THE OTHER HAND TO REPEL THE ARGUMENT AD DRESSED BY LD. DR, THE LD. AR FOR THE ASSESSEE CONTENDED TH AT BY ACCEPTING THE APPLICATION MOVED BY ASSESSEE FOR LE ADING ADDITIONAL EVIDENCE AND WAS ALLOWED AND CONSEQUENT LY ALL THE CASH BOOKS, BANK STATEMENT ETC. HAVE BEEN PRODUCED BEFORE THE ITA NO. 3346/DEL/2016 (MANA RAM GANPAT RAM & CO.) 4 LD. CIT(A), WHICH ORDER HAS NOT BEEN CHALLENGED BY THE REVENUE ; THAT ASSESSEE HAD MADE A REQUEST TO THE AO TO PRODU CE THE BOOK OF ACCOUNTS WHICH WAS DECLINED. GROUND NO. 1 7. UNDISPUTEDLY AS PER AUDITED FINANCIALS FOR THE Y EAR UNDER ASSESSMENT AVAILABLE AT PAGE 1 TO 7 OF THE PAPER B OOK THE RATIO OF NET PROFIT / SALES IS 11.92% ( RS. 7,33,25,983/- / RS. 87,42,856/-). IT IS ALSO NOT IN DISPUTE THAT WHEN INTEREST OF INC OME RS. 41,09,735/- IS REMOVED THE NP / SALES RATIO COMES TO 6.31%, WHICH IS WITHIN THE RANGE OF 5% TO 8% AS DETERMINED BY THE AO. 8. WHEN WE EXAMINE THE CONTENTIONS RAISED BY LD. DR FOR THE REVENUE THAT WHEN BOOK OF ACCOUNTS HAVE NOT BEEN PR ODUCED BY THE AO, HOW THE LD. CIT(A) HAS ASSUMED THE FACT THA T ACCOUNTS OF THE ASSESSEE ARE AUDITED ONE, IN THE LIGHT OF FINDI NG RETURNED BY LD. CIT(A) AT PAGE 15 AND 16 OF THE IMPUGNED ORDER IT I S CATEGORICALLY PROVED THAT THE ASSESSEE HAD MOVED AN APPLICATION F OR ADDITIONAL EVIDENCE ON WHICH REMAND REPORT WAS CALLED AND THER EAFTER ADDITIONAL EVIDENCE IN THE FORM OF BOOK OF ACCOUNTS , BANK STATEMENT, CASH BOOKS ETC. WERE PRODUCED AND ENTERT AINED, THE CONTENTION RAISED BY LD. DR IS NOT MISCONCEIVED, H ENCE NOT SUSTAINABLE. ITA NO. 3346/DEL/2016 (MANA RAM GANPAT RAM & CO.) 5 9. NO DOUBT, LD. CIT(A) HAS RETURNED SELF-CONTRADI CTORY FINDINGS AS HAS BEEN RECORDED IN PARA 5.3 REGARDING PRODUCTION OF BOOK OF ACCOUNTS BY THE ASSESSEE BUT RESULT OF THE ISSUE RAISED BEFORE HIM IS CORRECT ON THE BASIS OF FACTS AND LAW . 10. FROM THE AUDITED FINANCIAL WHEN IT IS NOT IN DI SPUTE THAT THE ASSESSEE HAS DECLARED GROSS PROFIT AS PER P & L ACC OUNT FOR THE YEAR UNDER ASSESSMENT AT 11.92% ON THE WORK RECEIP T OF 7,33,25,983/- AND EVEN IF INTEREST INCOME OF RS. 41 ,09,735/- IS EXCLUDED FROM THE PROFIT EVEN THEN THE NET PROFIT C OMES TO 6.31%, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION ON THE GROUND THAT WHEN NET PROFIT ALREADY DECLARED BY THE ASSESSEE IS MORE THAN THE NET PROFIT ESTIMATED BY THE AO, THE ADDITION IS LI ABLE TO BE DELETED. SO, GROUND NO. 1 IS DETERMINED AGAINST TH E REVENUE. GROUND NO. 2 11. WHEN THE ASSESSEE BY PRODUCING ADDITIONAL EVIDE NCES BEFORE LD. CIT(A) HAS PRODUCED THE CASH BOOK, BANK STATEMENT ETC. TO EXPLAIN THE CASH DEPOSIT OF RS. 84,60,000/- AND FROM THE CASH BOOK ON WHICH REMAND REPORT OF AO WAS CALLED B UT HE HAS NOT SUBMITTED THE SAME, THE LD. CIT(A) HAS REACHED THE CONCLUSION THAT WHEN ADEQUATE CASH BALANCE IN THE B OOK OF ACCOUNTS ON THE DAYS WHEN CASH IN QUESTION WAS DEPO SITED IN THE ITA NO. 3346/DEL/2016 (MANA RAM GANPAT RAM & CO.) 6 BANK WAS THERE NO ADDITION CAN BE MADE AND AS SUCH HAS RIGHTLY DELETED THE SAME. SO THE ENTIRE DELETION HAS BEEN M ADE BY THE LD. CIT(A) BY DULY EXAMINING THE CASH BOOKS AUDITED ACC OUNTS AND RELATED EVIDENCES ON WHICH AO HAS NOT MADE ANY COMM ENT DURING REMAND PROCEEDINGS RATHER PREPARED THE REMAND REPOR T EX PARTE. SO, WE AFFIRM THE FINDINGS RETURNED BY LD. CIT(A) H ENCE, GROUND NO. 2 IS DETERMINED AGAINST THE ASSESSEE. THE CASE LAW RELIED UPON BY LD. DR IS NOT APPLICABLE TO THE FACTS AND CIRCUM STANCES OF THE CASE. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF APRIL, 2019. SD/- SD/- (R.K.PANDA) ( KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 /04/ 2019 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI ITA NO. 3346/DEL/2016 (MANA RAM GANPAT RAM & CO.) 7 DATE OF DICTATION 15.04.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 18/04/2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 24/04/2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 24/04/2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER