TSF Enterprises, Jodhpur V. DCIT, Circle-1, Jodhpur

ITA 348/JODH/2018

AI Insights

TSF Enterprise, a civil contractor engaged in construction works primarily awarded by Jodhpur Nagar Nigam, appealed against the order of the Commissioner of Income Tax (Appeals) - 1, Jodhpur, which confirmed the AO's addition of Rs. 13,41,030 to the assessee's income by applying a net profit rate of 10% on gross receipts of Rs. 7,92,28,877. The AO had rejected the books of accounts under Section 145(3) of the Income Tax Act and estimated the net profit rate. The CIT(A) upheld this decision, leading to the appeal before the ITAT. The ITAT, considering the assessee's previous profit percentage of 8.31% and other factors, decided to reduce the addition to 9%.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300029 (ITAT-JODHPUR)
• Duration Of Justice: 5 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-08-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 09-07-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts
• Section: 271(1)(c); 143(3); 143(2); 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, JODHPUR BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA No. 348/JODH/2018 (A.Y: 2014-15) TSF Enterprise, Golnal, Inside Jalori Gate, Jodhpur-342001, Rajasthan. Vs. DCIT, Circle – 1 Jodhpur, Rajasthan. RPAN/GIR No. : AADFT4491R Appellant .. Respondent Assessee by : Ms. Divya Phophalia, CA & Shri Kapil Taparia, CA Revenue by : Ms. Prerana Choudhary, JCIT DR Date of Hearing 16.08.2023 Date of Pronouncement 16.08.2023 आदेश / O R D E R PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)(CIT(A))-1, Jodhpur passed u/s 143(3) and U/sec250 of the Act. The assessee has raised the following grounds of appeal: 1.1. That on f acts and in the circumstances of the case and in view of evidence on record to the L.d CIT (Appeal) | Jodhpur have wrongly & erroneously conf irmed the addition of Rs13,41,030/- by applying the net prof it rate @ 10% on gross receipt of Rs. 7,92,28,877/-, where as ITA No. 348/Jodh/2018 TSF Enterprises, Jodhpur - 2 - assessee firm have maintained proper books of accounts and no specif ic defects were pointed out. 2.2. That on f acts, and in the circumstances of the case the Ld. CIT(Appeal) Jodhpur have wrongly & erroneously confirmed the initiation of penalty U/s 271(1)(c) of the IT Act 3Assessee f irm crave, leave to add, amend, alter modif y or substitute any of the grounds of appeal at the date on or before hearing For 2.The brief facts of the case are that, the assessee is a civil contractor and is engaged in the construction of roads and other civil works awarded mainly by Jodhpur Nagar Nigam. The assessee has filed the return of income for the A.Y 2014- 15 on 08.11.2014 disclosing a total income of Rs. 22,36,760/- and the return of income was processed u/s 143(1) of the Act. Subsequently the notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued. In compliance, the Ld. AR of the assessee appeared from time to time and submitted the details and the case was discussed. The Assessing Officer (AO) on perusal of the financial statements found that, the assessee has disclosed the net profit of Rs.22,36,762/-.The AO has called for various details and explanations on the claims and also to produce vouchers/ bills in respect of expenses. The AO dealt on the various facts and provisions of Sec. 145(3) of the Act and finally has rejected the books of accounts and estimated NP ITA No. 348/Jodh/2018 TSF Enterprises, Jodhpur - 3 - rate @ 10% and made a addition of Rs.13,41,030/- and assessed the total income of Rs.35,77,790/- and passed the order u/s 143(3) of the Act dated 08.12.2016. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). The CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the AO and has confirmed the action of the AO and dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Honble Tribunal. 4. At the time of hearing, the Ld. AR submitted that CIT(A) has erred in sustaining the addition of income overlooking the facts that the assessee is offering income @ 8.31%. The Ld. AR contended that the addition is at higher side and substantiated the submissions with the paper book and prayed for allowing the appeal. Contra, the Ld. DR supported the order of the CIT(A). 5. We heard the rival contentions and perused the material on record. The sole disputed issue envisaged by the Ld. AR that the CIT(A) has erred in sustaining the addition @ 10% of the total gross receipts ,where the AO has rejected the books ITA No. 348/Jodh/2018 TSF Enterprises, Jodhpur - 4 - of accounts u/s 145(3) of the Act. The Ld. AR’s contentions are that the assessee has been offering the income @8.31% as against the sustainment @10%. We considering the turnover of the assessee and the nature of business operations and the profit percentage maintained in the earlier years and to meet the ends of justice, we restrict the addition to the extent @ 9% as against @10% made by the AO and accordingly direct the AO and we partly allow the grounds of appeal in favour of the assessee. 7. In the result the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 16.08.2023. Sd/- Sd/- (DR DIPAK P RIPOTE) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Jodhpur Dated 16.08.2023 KRK, PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. Concerned CIT 5. DR, ITAT, Jodhpur 6. Guard file.