JAIN CONSTRUCTION CO., KARNAL V. ITO, WARD-1, KARNAL

ITA 3389/DEL/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3713 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJEEV SACHDEVA
• Keywords: Revision of order; Set aside
• Section: 147; 263; 143(3); 145(3)

Judgement Text

ITA No.-3389/Del/2018 Jain Construction Co. Page 1 of 6 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘C’: NEW DELHI) BEFORE SH. CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No:-3389/Del/2018 ( Assessment Year: 2013-14) Jain Construction Co.15, First Floor Mohyal Market, Sadar Bazar, Karnal Vs. ITO Ward-1, Karnal APPELLANT RESPONDENT PAN NO. AAFFJ3772K Assessee By : Sh. Rajeev Sachdeva, CA Revenue By : Shri Sanjay Kumar Nargas, SR DR (A) This appeal has been filed by the assessee against impugned appellate order dated 02.01.2018 of Learned Commissioners of Income Tax (Appeals), Karnal [“Ld. CIT(A)”, for short] for Assessment Year 2007-08. Original assessment in this case was completed u/s 143(3) of the Income Tax Act, ( “IT Act”, for short) at an income of Rs. 9,19,980/- vide order dated 18.12.2009 ; as against returned income of Rs. 1,58,170/-. While making assessment, accounts books were rejected u/s 145(3) of the I.T. Act and net profit rate of 12% was applied on the gross contract receipt. However, deduction on account of material & labour charges was allowed by the Assessing Officer. The CIT ITA No.-3389/Del/2018 Jain Construction Co. Page 2 of 6 Karnal set aside the aforesaid order dated 18.12.2009 passed u/s 143(3), by passing order dated 03.02.2012 u/s 263 of the I.T. Act. Vide fresh assessment order dated 15.03.2013, the assessee’s income was assessed at estimated figure of Rs.25,45,350/- by applying net profit rate of 12% on net contract receipts amounting to Rs.2,12,11,265/-; as against returned income of Rs.1,58,170/-. The assessee filed appeal against the aforesaid order dated 15.03.2013 before Ld. CIT(A). The assessee’s appeal filed before the Ld. CIT(A) was dismissed vide the aforesaid impugned appellate order dated 02.01.2018 of Ld. CIT(A). The present appeal before us has been filed by the assessee against the order of the Ld.CIT(A). (B) In the present appeal, the assessee has taken many grounds of appeal. All these grounds are related to the assessee’s contention that estimation of assessee’s income by adopting net profit ratio 12% of net contract receipts is excessive and unreasonable. For the sake of convenience, all the grounds of appeal are disposed of together. In the course of appellate proceedings in Income Tax Appellate Tribunal the assessee has filed a paper book containing the following particulars :- Sr. No. Particulars 1 Assessment Order passed u/s. 147 / 143 (3) of the Income Tax Act on 15.03.2013 2 Order passed by CIT (Appeals) on 02.01.2018 3 Copy of Form 36 Appeal of ITAT 4 Copy of Original Assessment Order passed under section 143 (3) on 18.12.2009 ITA No.-3389/Del/2018 Jain Construction Co. Page 3 of 6 5 Copy of order passed by CIT, Karnal Under Section 263 Of the Income Tax Act 6 Copy of Show cause notice under section 263 91) of Income Tax Act, 1961 7 Reply of Show cause Notice u/s. 263 (1) 8 Reply Regarding Assessment Proceedings for A.Y.2 007-08 9 Order of Hon’ble Punjab & Haryana High Court in case of CIT Vs. M/s. Prabhat Kumar Contractor 10 Order of ITAT – Chandigarh in the case of ACIT Circle Kurushetra Vs. Jaswant Singh Contractor 11 Order of ITAT Chandigarh in the case of I.T. O Ward-2 KUK Vs. Ram Kumar 12 Order of ITAT Chandigarh in the case of the DCIT Circle KUK Vs. Sukhvinder Singh Contractor 13 Order of ITAT Chandigarh in the case of the ITO ward-2 Jind Vs. M/s. Rajinder Parshad Jain 14. Order of ITAT Amritsar in the case of the I.T.O Vs. Shri Mohan Singh Contractor 15. Copy of Income Tax Return and Tax Audit Report for the FY 2005-06 alongwith intimation issued under section 143 (1) 16. Copy of Income Tax Return and Tax Audit Report for the FY 2007-08 alongwith intimation. 17. Order of ITAT, Delhi in the case of Nand Kishore Pundir Vs. ITO Ward-1, Delhi ITA No.-3389/Del/2018 Jain Construction Co. Page 4 of 6 (B.1) At the time of hearing before us, the Ld. Authorised Representative ([“Ld. AR”, for short] of the assessee submitted that the Assessing Officer [“AO, for short] disregarded many comparable cases, which were brought to the notice of the AO, in which the income in similar facts and circumstances was assessed at net profit rate below 12%. He also drew our attention to the aforesaid Assessment Order dated 15.03.2013 in which the AO has specifically mentioned that various judgments of Income Tax Appellate Tribunal [“Income Tax Appellate Tribunal”, for short ITAT] were brought to the notice of the Assessing Officer wherein net profit rate of less than 12% was applied; but the Assessing Officer disregarded the orders of the ITAT, in a non speaking manner, and without assigning any reason. The Ld. AR of the assessee further submitted that the Ld. CIT(A) erred in declining to interfere with the order of the AO, despite the fact that the assessee deserved some relief, again disregarding the orders of ITAT in which lower rate of net profit was adopted for estimating for assessee’s income. He took us through the aforesaid paper book (referred to in foregoing paragraph (B) of this order, in which various decisions of ITAT have been compiled, to plead that the estimation of income @ 12% of net contract receipts, was excessive and unreasonable in the facts and circumstances of the case. The Ld. AR for the assessee submitted before us that the AO should be directed to estimate the assessee’s income @ 8% of net contract receipts, in consonance with the order of coordinate Bench of ITAT, Delhi in the case of Nand Kishore Pundir Vs. ITO (order dated 09.07.2015 for A.Y. 2009-10 in ITA No.3597/Del /2014), in which, in similar facts ITA No.-3389/Del/2018 Jain Construction Co. Page 5 of 6 and circumstances, the assesee’s income was directed to be adopted @ 8% of the receipts. (B.2) The Ld. Senior Departmental Representative [“Ld. Sr. DR ”, for short] for Revenue expressed no objection to the request of the Ld. AR for the assessee, for estimation of assessee’s income @ 8 %; and left it to the discretion of the Bench. (B.2.1) In view of the foregoing; and respectfully following the aforesaid order of coordinate Bench of ITAT, Delhi in the case of Nand Kishore Pundir Vs. ITO (supra), in the specific facts and circumstances of the case before us, we direct the Assessing Officer to determine assessee’s income by adopting net profit ratio of 8% on the net contract receipts of the assessee. (C) This appeal is disposed of in accordance with aforesaid directions. In view of these directions, all the grounds of appeal are treated as disposed off. For statistical purposes, this appeal is partly allowed. This order was already pronounced orally on 26 th April, 2022 in Open Court, in the presence of representatives of both sides, after conclusion of the hearing. Now this order in writing is signed today on 27/04/2022. Sd/- Sd/- (C.M. GARG) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/04/2022 NEHA, Sr. Private Secretary ITA No.-3389/Del/2018 Jain Construction Co. Page 6 of 6 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Date of dictation 26.04.2022 Date on which the typed draft is placed before the dictating Member 27.04.2022 Date on which the typed draft is placed before the Other Member 27.04.2022 Date on which the approved draft comes to the Sr. PS/PS 27.04.2022 Date on which the fair order is placed before the Dictating Member for pronouncement 27.04.2022 Date on which the fair order comes back to the Sr. PS/PS 27.04.2022 Date on which the final order is uploaded on the website of ITAT 27.04.2022 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