M/s Makker Contracts, New Delhi V. ACIT, New Delhi

ITA 339/DEL/2014

• Counselvise Citation: 33920114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: RAKESH SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH SMC SMC SMC SMC : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT ITA NO ITA NO ITA NO ITA NO . .. . 339/DEL/2014 339/DEL/2014 339/DEL/2014 339/DEL/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2010 2010 2010 2010 - -- - 11 1111 11 M/S MAKKER CONTRACTS, M/S MAKKER CONTRACTS, M/S MAKKER CONTRACTS, M/S MAKKER CONTRACTS, CHAMBER NO.4, CHAMBER NO.4, CHAMBER NO.4, CHAMBER NO.4, KISHAN CHAND COMPLEX, KISHAN CHAND COMPLEX, KISHAN CHAND COMPLEX, KISHAN CHAND COMPLEX, IIND FLOOR, IIND FLOOR, IIND FLOOR, IIND FLOOR, PASCHIM VIHAR, PASCHIM VIHAR, PASCHIM VIHAR, PASCHIM VIHAR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 063. 110 063. 110 063. 110 063. PAN : AAGFM1112K. PAN : AAGFM1112K. PAN : AAGFM1112K. PAN : AAGFM1112K. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -38(1), 38(1), 38(1), 38(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH SHARMA, CA. RESPONDENT BY : SHRI K.K. JAISWAL, SR.DR. DATE OF HEARING : 10.06.2015 10.06.2015 10.06.2015 10.06.2015 DATE OF PRONOUNCEMENT : 16.07.2015 16.07.2015 16.07.2015 16.07.2015 ORDER ORDER ORDER ORDER THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-1 1 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVIII , NEW DELHI DATED 17 TH OCTOBER, 2013. 2. THE GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER:- 1. THE ORDER PASSED BY LEARNED CIT IS BAD IN LAW. 2. THE LEARNED CIT IS NOT JUSTIFIED IN CONFIRMING ORD ER OF ADDITIONAL COMMISSIONER AND ACCEPTING GROSS PROFIT RAT E @ 15% THAN ACTUAL GROSS PROFIT. ITA-339/DEL/2014 2 3. THE LEARNED CIT IS NOT JUSTIFIED IN REJECTING THE APPEAL ON THE BASIS OF ONE BILL AND PAYMENT MADE THEREOF, AN D THUMB IMPRESSION ON MUSTER ROLL. 4. THE LEARNED CIT IS WRONG BY NOT CONSIDERING THAT PROPER BOOKS OF ACCOUNT WERE MAINTAINED, AUDIT WAS CONDUCTED AND REPORT WAS FILED, TDS RETURN WERE DULY FILED AND NO EXPENSES WERE OBJECTED. 5. THE LEARNED CIT IS NOT JUSTIFIED IN MAKING INFEREN CES THAT THUMB IMPRESSIONS ARE OF SAME PERSON AS THERE ARE N O VALID BASIS. IT IS ACCEPTED NORM FOR PAYMENT OF WAGES AND VALID PROOF. 6. THE LEARNED CIT DID NOT CONSIDER THAT THE SAME CONTRACT WAS BEING RUN OVER THE YEARS AND COSTS HAVE INCREASED. 7. ANY OTHER GROUNDS OF APPEAL AT THE TIME OF HEARIN G. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO REA SON WAS ADVANCED BY THE ASSESSING OFFICER FOR IGNORING THE ENT IRE LOSS CLAIMED BY THE ASSESSEE AS PER THE AUDITED ACCOUNTS AND IN MAKING AN ESTIMATE OF INCOME AT `65,000/-. HE SUBMITTED THAT I N THE BUSINESS, THERE MAY BE PROFIT OR THERE MAY BE LOSS ALSO. IT IS W ELL SETTLED THAT THE ACCOUNTS OF THE ASSESSEE COULD NOT BE REJECTED MERELY B ECAUSE THE ASSESSEE COULD EARN A VERY LITTLE PROFIT OR HAS INCURRED LOSSES DURING THE YEAR. 4. LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE ASSESSING OFFICER H AS ASSESSED THE ASSESSEE AT A MEAGER INCOME OF `65,000/- ONLY ON TOTAL RECEIPTS OF ABOUT `5 CRORES AND, THEREFORE, HIS ORDER SHOULD BE CONFIRMED. HE REFERRED TO THE RELEVANT PORTION OF THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A) IN SUPPORT OF THE CASE O F THE REVENUE. HE RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). ITA-339/DEL/2014 3 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERU SED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). I FIND THAT NO DETAILED REASONS WERE RECORDED BY THE ASSESSING OFFICER WHILE REJE CTING THE ACCOUNT BOOKS OF THE ASSESSEE AND MAKING AN ESTIMATE OF I NCOME AND IGNORING THE ENTIRE LOSS RETURNED BY THE ASSESSEE AT `27, 89,707/-. ONLY ONE BILL COULD NOT BE PRODUCED BY THE ASSESSEE. MERELY BECAUSE THE ASSESSEE HAS CLAIMED LOSS ON THE TURNOVER OF `5 CRORES, IS N O GROUND TO IGNORE THE ENTIRE LOSS CLAIMED BY THE ASSESSEE AND TO ASSESS THE ASSESSEE AT A POSITIVE INCOME. THE BOOK RESULTS OF THE AS SESSEE WERE SUPPORTED BY THE AUDITED ACCOUNTS OF THE ASSESSEE. I FIN D THAT THE LEARNED CIT(A) HAS RECORDED THAT THE ASSESSEE WAS ASKED TO PRODUCE THE MUSTER ROLLS, COPIES OF BILLS RAISED TO THE DDA AND COPIES OF THE SHUTTERING BILLS. THE CIT(A) HAS FURTHER RECORDED THA T THE COPY OF ACCOUNT OF VIKAS SHUTTERING SHOWS THAT THE ASSESSEE HAD SHOWN CERTAIN PAYMENTS WHICH DID NOT CONTAIN THE BILL NUMBERS AND T HE ASSESSEE HAS NOT ENCLOSED THE COPY OF THE BILLS AND THE SHUTTERING EXPENSES STAND INFLATED AT LEAST TO THAT EXTENT. THE CIT(A) HAS FUR THER RECORDED THAT THE PERUSAL OF THE MUSTER ROLL SHOWS THAT SAME THUMB I MPRESSIONS WERE APPEARING AGAINST MULTIPLE ENTRIES DURING THE SAM E MONTH AND THIS CLEARLY SHOWS THAT THE LABOUR EXPENSES WERE ALSO INF LATED. IN THESE FACTS OF THE CASE, IN THE ABSENCE OF ANY GROUND TO IGN ORE THE ENTIRE LOSS DECLARED BY THE ASSESSEE, I AM UNABLE TO SUSTAIN THE ACT ION OF THE REVENUE AUTHORITIES. HOWEVER, CONSIDERING THE FACT T HAT THE ASSESSEE COULD NOT PRODUCE THE ENTIRE BILLS/VOUCHERS IN SUPPORT OF ITS ACCOUNTS VERSION, I HOLD THAT CERTAIN DISALLOWANCES OUT OF EXP ENSES CLAIMED COULD HAVE BEEN MADE. THERE BEING NO FOOLPROOF EVI DENCE PRODUCED BY THE REVENUE OR THE ASSESSEE, I AM OF THE VIEW THAT I T SHALL BE REASONABLE TO MAKE A SUITABLE DISALLOWANCE BY WAY OF E STIMATE OUT OF THE EXPENSES CLAIMED BY THE ASSESSEE AND, ACCORDINGLY, AF TER CONSIDERING THE ENTIRE FACTUAL MATRIX OF THE CASE AND MAKING DUE ITA-339/DEL/2014 4 DISALLOWANCE OUT OF UNPROVED EXPENSES, I HOLD THAT THE ENDS OF JUSTICE SHALL BE MET IF THE LOSS OF THE ASSESSEE IS DETERMINED BY W AY OF ESTIMATE AT `20,00,000/- LOSS AS AGAINST THE LOSS OF `27,8 9,707/- RETURNED BY THE ASSESSEE. ACCORDINGLY, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2015. SD/- (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S MAKKER CONTRACTS, CHAMBER NO.4 , M/S MAKKER CONTRACTS, CHAMBER NO.4, M/S MAKKER CONTRACTS, CHAMBER NO.4, M/S MAKKER CONTRACTS, CHAMBER NO.4, KISHAN CHAND COMPLEX, IIND FLOOR, KISHAN CHAND COMPLEX, IIND FLOOR, KISHAN CHAND COMPLEX, IIND FLOOR, KISHAN CHAND COMPLEX, IIND FLOOR, PASCHIM VIHAR, NEW DELHI PASCHIM VIHAR, NEW DELHI PASCHIM VIHAR, NEW DELHI PASCHIM VIHAR, NEW DELHI 110 063. 110 063. 110 063. 110 063. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -38(1), NEW DELHI. 38(1), NEW DELHI. 38(1), NEW DELHI. 38(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR