Appeal details
Counselvise Citation
[2009] 115 COUNSELVISE.COM (IT) 0456 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 year(s) 1 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
13-11-2009
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
D
Next Hearing Date
04-11-2009
Assessment Year
1993-1994
Appeal Filed On
22-09-2003
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH DAHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, J.M. AND D. C. AGRAWAL, A.M. ITA NO.3523/AHD/2003 ASST. YEAR:1993-94 ANAND BUILDERS, 1-B, KRISHNA KUNJ, KATARGAM ROAD, SURAT. V/S . INCOME-TAX OFFICER, WD 3(2), SURAT. PAN NO.N.A. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI D. K. PAREKH RESPONDENT BY:- SHRI C. K. MISHRA, SR. D.R. O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 13.02.2003 WHEREIN HE HAS CONFIRMED AN ADDITI ON OF RS.7,30,552/- BEING THE PURCHASES MADE BY THE ASSESSEE BUT NOT AC COUNTED FOR IN THE BILLS OF CONTRACT. 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A FIR M ENGAGED IN THE BUSINESS OF CONSTRUCTION. ORIGINAL ASSESSMENT WAS M ADE UNDER SECTION 143(3) ON 25.3.1996. THE AO REOPENED THE ASSESSMENT ON THE GROUND THAT ITA NO.3523/AHD/03 AY 1993-94 2 FOLLOWING BILLS ARE NOT ACCOUNTED FOR EITHER AS WOR K-IN-PROGRESS OR AS CONTRACT RECEIPTS: WORK FOR DRAINAGE, LIGHT, WELDING, COLOUR AND STONE : RS.1,96,250/- GLAZED TILES : RS.2,66,655/- WHITE CEMENT : RS.2,67,647/- -------------------- TOTAL RS.7,30,552/- -------------------- DURING THE COURSE OF REASSESSMENT PROCEEDINGS IT WA S EXPLAINED TO THE AO THAT ASSESSEE IS RUNNING A CONTRACT FOR M/S SUNN Y DEVELOPERS AND CONSTRUCTING FLATS AT FIXED RATE OF RS.180/- PER SF T. AND, THEREFORE, FOR THE ENTIRE CONSTRUCTED FLATS THE ASSESSEE IS TO RECEIVE CONSIDERATION @ RS.180/- PER SFT. SO THIS CONTRACT IS RUNNING FOR 5 YEARS AND, THEREFORE, IT IS NOT RELEVANT WHETHER PURCHASES ARE INCLUDED IN BILL S OF CONTRACT OR NOT. ON THE OTHER HAND AO GAVE FINDING THAT PURCHASES MADE FOR GLAZED TILES, OTHER FITTING ITEMS COSTING RS.2,66,655/- AND KOTA STONES OF RS.2,67,647/- PURCHASED THIS YEAR WERE NOT ACCOUNTED FOR. 3. THE BILLS SUBMITTED THIS YEAR DID NOT SHOW ANY W ORK EXECUTED WITH THESE MATERIALS. THESE MATERIALS WERE ALSO NOT SHOW N AS CLOSING STOCK OR WORK IN PROGRESS. HE ACCORDINGLY TREATED THESE EXPE NSES AS UNDISCLOSED INCOME AND TAXED ACCORDINGLY. LD. CIT(A) CONFIRMED THE ADDITION ON THE GROUND THAT SEVERAL OPPORTUNITIES WERE PROVIDED BUT THE ISSUE WAS NOT EXPLAINED. EVEN THOUGH LD. CIT(A) HAD REPRODUCED TH E REPLY OF THE ASSESSEE AND ALSO THE REMAND REPORT OF THE AO BUT H ER FINDING ON THE ISSUE ARE CRYPTIC AND, THEREFORE, DID NOT HELP IN PROPER ADJUDICATION OF THE ISSUE. ITA NO.3523/AHD/03 AY 1993-94 3 4. BEFORE US LD. AR SUBMITTED THAT ASSESSEE IS UNDE R CONTRACT TO RECEIVE A SUM OF RS.180 PER SFT. OVER TOTAL CONSTRU CTED AREA OF 1,22,924 SFT. AND CONTRACT VALUE AS AGREED WAS RS.2,21,26,32 0/-. THIS YEAR THE ASSESSEE RAISED A BILL OF RS.35 LACS FOR WHICH ASSE SSEE HAS RECEIVED THE PAYMENT. THE ENTIRE CONTRACT AMOUNT WAS RECEIVED BY THE ASSESSEE AS UNDER :- YEAR WISE CONTRACT RECEIPTS: A.Y.1990-91 RS.16,07,130/- A.Y.1991-92 RS.33,20,000/- A.Y.1992-93 RS.95,00,000/- A.Y. 1993-94 RS.35,00,000/- A.Y.1994-95 RS.41,99,190/- ONCE CONTRACT AMOUNT IS FIXED THEN ASSESSEE IS TO B E TAXED ON THE BASIS OF RUNNING BILLS RECEIVED FROM YEAR TO YEAR AND, THERE FORE, AMOUNT OF PURCHASE MADE IN ANY PARTICULAR YEAR ARE NOT RELEVA NT. THE ASSESSEE HAS NOT RAISED ANY BILL FOR A SUM OF RS.7,30,552/- THIS YEAR. THEREFORE, IT SHOULD NOT BE INCLUDED IN THE TOTAL AMOUNT RECEIVED THIS YEAR. THE CONTRACTEE DID NOT REQUIRE ANY ITEMWISE BILL AND AS SESSEE HAS NOT RAISED THEM IN THAT MANNER. HE SUBMITTED THAT THE MATERIAL PURCHASED FOR RS.7,30,552/- ARE INCLUDED IN THE WORK DONE THIS YE AR OR IN SUBSEQUENT YEARS. ASSESSEE HAS BEEN TAXED ON NET PROFIT OF RS. 9,23,791/- WHICH IS ABOUT 26.39% THIS YEAR AS AGAINST NET PROFIT OF 5.5 2% SHOWN BY THE ASSESSEE AND ASSESSED AT 6.23% IN EARLIER ASSESSMEN T. AS PER SECTION 44AD NET PROFIT RATE WOULD BE ONLY 8%. 5. AGAINST THIS, THE LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW. ITA NO.3523/AHD/03 AY 1993-94 4 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND CARE FULLY PERUSING THE MATERIAL ON RECORD WE ARE OF THE VIEW THAT ASSESSEE SHOULD SHOW WHETHER PURCHASES OF RS.7,30,552/- ARE ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. IF THEY ARE ACCOUNTED FOR IN THE BOOKS THEN WHETHER TH EY ARE TAKEN AS WORK IN PROGRESS WHILE COMPLETING THE ACCOUNTS. IF ASSES SEE IS ABLE TO SHOW THAT THESE PURCHASES ARE RECORDED IN THE BOOKS THEN NO A DDITION IS CALLED FOR. THERE IS NO ALLEGATION THAT PURCHASES ARE NOT VERIF IABLE OR UNDISCLOSED INVESTMENT HAS BEEN MADE IN THESE PURCHASES. 7. AS A RESULT, WE RESTORE THE MATTER TO THE FILE O F AO. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 13/11/2009 SD/- SD/- (MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 13/11/2009 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD
