M/s. S. K. Jain Infrastructure (P) Ltd., Bhopal V. D C I T 1(1), Bhopal

ITA 35/Ind/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9582 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 21-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 143(3); 44AB

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA No.34 to 35/Ind/2019 Assessment Year: 2012-13 & 2013-14 M/s. S.K. Jain Infrastructure Pvt. Ltd. Bhopal PAN:AAMCS0932J : Appellant V/s DCIT 1(1) Bhopal : Respondent ITA No.36/Ind/2019 Assessment Year: 2013-14 M/s. S.K. Jain Bhopal PAN:AAOFS1606A : Appellant V/s DCIT 1(1) Bhopal : Respondent Appellant by S/Shri Ashish Goyal & N.D. Patwa ARs Respondent by Shri Amit Soni, Sr. DR Date of Hearing 22.12.2021 Date of Pronouncement 28.01.2022 M/s. S.K. Jain & S.K. Infrastructure Pvt. Ltd. ITA No.34 to 36/Ind/2019 2 O R D E R PER BENCH: The above captioned appeals filed at the instance of the Assessees for Assessment Year 2012-13 & 2013-14 are directed against the order of Ld. Commissioner of Income Tax(Appeals) (in short ‘Ld. CIT] Bhopal dated 16.11.2018 & 15.11.2018 which are arising out of the order u/s 143(3) of the Income Tax Act 1961(In short the ‘Act’) dated 29.01.2015 & 04.03.2016 framed by ACIT- 1(1)/ITO-2(1), Bhopal. The assessee has raised following grounds of appeal in ITANo.34/Ind/2019 in case of S.K. Infrastructure Pvt. Ltd. for A.Y.2012-13: 1.That on the fact and in the circumstances of the case, the Ld. CIT(A) erred in confirming the action of the AO for rejection of books of account by invoking the provision of section 1475(3) and assessing the income as in the manner provided u/s 144 of the Act without considering the explanation offered by the assesse and without considering the fact that regular and proper books of accounts are maintained and the same are audited u/s 44AB of the Act. 2. That on the facts and in the circumstances of the case, the order passed by the ld. CIT(A) confirming the addition of Rs.49,68,983/- out of the total addition of Rs.1,09,30,903/- by estimating the net profit @ 6.15% on entire work receipts including interest on FDR and machinery rend without accepting the explanation offered by the assessee is unjust, unfair and on very higher side. M/s. S.K. Jain & S.K. Infrastructure Pvt. Ltd. ITA No.34 to 36/Ind/2019 3 The assessee has raised following grounds of appeal in ITANo.35/Ind/2019 in case of S.K. Infrastructure Pvt. Ltd. for 2013-14 : 1.That on the fact and in the circumstances of the case, the Ld. CIT(A) erred in confirming the action of the AO for rejection of books of account by invoking the provision of section 1475(3) and assessing the income as in the manner provided u/s 144 of the Act without considering the explanation offered by the assesse and without considering the fact that regular and proper books of accounts are maintained and the same are audited u/s 44AB of the Act. 2. That on the facts and in the circumstances of the case, the order passed by the ld. CIT(A) confirming the addition of Rs.32,45,541/- out of the total addition of Rs.64,84,663/- by estimating the net profit @ 6.15% on entire work receipts including interest on FDR and machinery rend without accepting the explanation offered by the assessee is unjust, unfair and on very higher side. The assessee has raised following grounds of appeal in ITANo.36/Ind/2019 in case of M/s. S.K. Jain for 2013-14 : 1.That on the fact and in the circumstances of the case, the Ld. CIT(A) erred in confirming the action of the AO for rejection of books of account by invoking the provision of section 1475(3) and assessing the income as in the manner provided u/s 144 of the Act without considering the explanation offered by the assesse and without considering the fact that regular and proper books of accounts are maintained and the same are audited u/s 44AB of the Act. 2. That on the facts and in the circumstances of the case, the order passed by the ld. CIT(A) confirming the addition of Rs. 22,18,157/-out of the total addition of Rs. 85,31,190/- by M/s. S.K. Jain & S.K. Infrastructure Pvt. Ltd. ITA No.34 to 36/Ind/2019 4 estimating the net profit @ 6.20% on entire work receipts including interest on FDR and machinery rend without accepting the explanation offered by the assessee is unjust, unfair and on very higher side. 2. As regard ground no.1 challenging the action of the ld. AO relating to books of account invoking provisions of section 45(3) of the Act, the same being not pressed by Ld. counsel for the assessee before us, therefore, the same is not pressed as dismissed. 3. Ground no.2 raised on merit in the captioned cases we find that the only issue relates to estimation of profit on the contractual work carried out by the assessee. The facts emerging from the records are that of both M/s. S.K. Jain, & S.K. Jain Infrastructure Pvt. Ltd. are engaged in the business of government contracts of irrigation department. M/s. S.K. Jain has shown profit rate of 5.15% whereas M/s. S.K. Jain Infrastructure has declared profit rate of 5.87%. In the assessment proceedings for both the assessees books of account were rejected and in view of the decision of this Tribunal Ld. AO estimated the net profit @ of 6.15% in the case of M/s. S.K. Jain and 6.20% in the case of M/s S.K. Jain Infrastructure Pvt. Ltd. Ld. CIT(A) confirmed the order of Ld. AO. M/s. S.K. Jain & S.K. Infrastructure Pvt. Ltd. ITA No.34 to 36/Ind/2019 5 4. Aggrieved assessee is in appeal before this Tribunal. 5. The only request made by the ld. counsel for the assessee is that in the earlier years the turnover was very high, but subsequently the turnover has decreased drastically and therefore, fixed cost could not be reduced in that proportion, and therefore the net profit has declined so relief should be granted by lowering the net profit rate. 6. Per contra, ld. DR supported the order of both lower authorities as well as the order of this Tribunal dated 17.05.2016. 7. We have heard rival contentions and perused the records placed before us. We notice that both the assessees are carrying similar type of business and in past this Tribunal vide ITANo.433 & others dated 17.05.2016 estimated the net profit @ 6.20% in the case of M/s. S.K. Jain Infrastructure Pvt. Ltd. and net profit rate of 6.15% in the case of M/s S.K. Jain. We also notice that the turnover of both the assessee(s) has declined and its almost 50% of the turnover as were dealt by this Tribunal during F.Y.2012-13. Apart from this fact Ld. counsel for the assessee cannot bring any other fact on record to pin point that fixed expenditure coupled with decreased turnover has led to decrease in profit. M/s. S.K. Jain & S.K. Infrastructure Pvt. Ltd. ITA No.34 to 36/Ind/2019 6 8. We, therefore, in the given facts and circumstances of the case, and in the interest of justice and to bring uniformity in the net profit rate since assessee(s) are same group and similar business is carried out, hold that applying the net profit @ 6.10% will meet the ends of justice. We, accordingly hold so and direct the ld. AO to estimate the net profit @ 6.10% of the gross contract receipts during the year in case of both the assessee(s). Accordingly grounds on merits raised by both the assessee(s) are partly allowed. 9. In the result, assessee(s) appeals ITANos.34 to 36/Ind/2019 are partly allowed. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 27 .01.2022. Sd/- Sd/- (MAHAVIR PRASAD) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated : 28 .01.2022 Patel/Sr. PS Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt.Registrar, I.T.A.T., Indore