M/s Indu Devling Pvt. Ltd, Bhopal V. The ACIT, Bhopal

ITA 338/IND/2010

• Counselvise Citation: 33822714 RSA 2010
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 28-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DIWAN
• Assessee Lawyers: RAVI SARDA
• Keywords: Corroborative evidences

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO338/IND/2010 AY: 2006-07 M/S INDUS DWELLING PRIVATE LIMITED BHOPAL PAN AAACI5777R ..APPELLANT V/S. ACIT, CIR. 2(1), BHOPAL ..RESPONDENT APPELLANT BY : SHRI RAVI SARDA, ADVOCATE RESPONDENT BY : SHRI ARUN DIWAN, SR. DR ORDER PER JOGINDER SINGH, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE ON THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APP EALS) WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT U/S 145(3 ) OF THE ACT. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I RAVI SARDA, LD. COUNSEL FOR ASSESSEE AND SHRI ARUN DEWAN, LEARNED S R. DR. THE ASSESSEE HAS ALSO FILED AN APPLICATION FOR CONDONAT ION OF DELAY FOR TWO DAYS WHEREIN IT HAS BEEN CLAIMED THAT THE APPEAL WA S DESPATCHED THROUGH SPEED POST ON 21.5.2010 WHICH COULD BE DELI VERED ON 28.5.2010. THE ASSESSEE ALSO FURNISHED THE PHOTOCOP Y OF THE SPEED POST 2 RECEIPT. KEEPING IN VIEW THE TOTALITY OF FACTS, TH E DELAY OF TWO DAYS IS CONDONED AND THE APPEAL IS ADMITTED FOR HEARING. 3. SO FAR THE MERITS OF THE CASE IS CONCERNED, THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS REJECTION OF BOOKS OF ACCOUNT AND ESTIMATION OF PROFIT AGAINST THE PROFIT DECLARED BY THE ASSESS EE. OUR ATTENTION WAS INVITED TO PAGES 62 TO 64 OF THE PAPER BOOK ALONG W ITH PAGE 32 OF THE AUDIT REPORT. HOWEVER, THE LEARNED SR. DR DEFENDED THE IMPUGNED ORDER. 4 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION AND SELLING OF HOUSES/BUNGALOWS, DECLARED INCOME OF RS.17,36,298/- AGAINST THE SALE RECEIPT OF RS. 11,60,48,561/- THE ASSESSEE MAINTAINS REGULAR BOOKS OF ACCOUNT ON MERCANTILE BASIS AND THE SAME ARE AUDITED. THE CLAIM OF THE ASSESSEE IS THAT THE LEARNED ASSESSING OFFICER WITHOUT POINTING OUT ANY DEFECT I N THE BOOKS OF ACCOUNT/SYSTEM OF ACCOUNTING, REJECTED THE SAME AND ESTIMATED THE PROFIT AT THE RATE OF 4% OF RECEIPT ESPECIALLY WHEN NECESSARY DETAILS WERE FILED ALONG WITH SUPPORTING EVIDENCE. THE ASS ESSEE WAS HAVING DIFFERENT SITES WHERE ACTIVITIES OF CONSTRUCTION WE RE IN PROGRESS. THE 3 WHOLE DISPUTE IS ABOUT ESTIMATION OF PROFIT AT THE RATE OF 4% AGAINST 1.47% DECLARED BY THE ASSESSEE. THE STAND OF THE R EVENUE IS THAT IF THE VALUATION OF WORK IN PROGRESS IS ANALYSED, IT GIVES THE DISTORTED PICTURE AND THE VALUE OF ITEMS SUCH AS STEEL, BLACK METAL, SAND, BRICKS, CEMENT, ETC., THE ASSESSEE HAS NOT INCLUDED IN THE WORK IN PROGRESS. HOWEVER, NO SPECIFIC FINDING HAS BEEN RECORDED BY THE ASSESSING OFFICER SUGGESTING ANY EXPENSES HAVING BEEN INCURRED AND DEBITED TO PR OFIT AND LOSS ACCOUNT BUT NOT INCLUDED IN THE VALUE OF WORK IN PR OGRESS. IT IS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT THE DEPARTME NT HAS PHYSICALLY CARRIED OUT THE VALUATION OF WORK IN PROGRESS AS ON 31 ST MARCH, 2006 AND THE SAME WAS FOUND TO BE VALUED AT LOWER FIGURE BY THE ASSESSEE. UNDER THESE FACTS, THERE IS NO MERIT IN REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT. WE ARE OF THE VIEW THAT ESTIMATI ON OF PROFIT AT 4% IS ON HIGHER HIGHER SIDE. THEREFORE, KEEPING IN VIEW T HE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD MEET THE EN DS OF JUSTICE IF THE DECLARED PROFIT IS ESTIMATED AT 2% IN PLACE OF 4% E STIMATED BY THE DEPARTMENT AND 1.47% DECLARED BY THE ASSESSEE. THER EFORE, THE LEARNED ASSESSING OFFICER IS DIRECTED TO COMPUTE THE PROFIT AT THE RATE OF 2% AGAINST 4% ESTIMATED BY HIM. THEREFORE, THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 4 ORDER PRONOUNCED IN THE OPEN COURT IN THE PRES ENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 27 TH JUNE, 2011. (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27.6.2011 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD F ILE