M/s. Mahasweta Construction Pvt. Ltd, Cuttack V. ACIT, Circle-2(2), Cuttack, Cuttack

ITA 364/CTK/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4638 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 22-09-2014
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURY
• Assessee Lawyers: D DAS
• Section: 44AD; 143(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK [ , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO. 36 4 /CTK/201 4 ( [ [ / ASSESSMENT YEAR : 20 09 - 20 10 ) M/S MAHASWETA CONSTRUCTION PVT. LTD., BUXI BAZAR CUTTACK VS. ACIT, CIRCLE - 2(2), CUTTACK ./ ./ PAN/GIR NO. : A ADCM 4180 B ( / APPELLANT ) .. ( / RESPONDENT ) [ /ASSESSEE BY : SHRI D.DAS /REVENUE BY : SHRI RA B IN CHOUDHURY / DATE OF HEARING : 2 9 TH MAY , 201 5 / DATE OF PRONOUNCEMENT 29 TH MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV (J.M) : TH IS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A ) , CUTTACK , DATED 19 - 6 - 2014 FOR THE ASSESSMENT YEAR 20 09 - 2010 , INTER ALIA , ON THE FOLLOWING GROUNDS : - 1. THAT, THE ORDER PASSED BY THE LEARNED CIT(A) CUTTACK IS HIGHLY ARBITRARY, WITHOUT ANY BASIS, WITHOUT PROPER APPLICATION OF MIND, CONTRARY TO WEIGHT OF EVIDENCE, BEYOND JURISDICTION AND OUGHT TO BE QUASHED. 2. THAT, THE LEARNED CIT(A) HAS ERRED IN FACT AND LAW IN CONFIRMING THE ESTIMATION OF INCOME FROM CON TRACT WORKS @8% BY THE LEARNED AO WHICH IS HIGHLY ILLEGAL, ARBITRARY AND OUGHT TO BE REDUCE. 3. THAT OTHER GROUNDS OF APPEAL, IF ANY, SHALL BE PRESSED FOR HAVING AT THE TIME OF THE APPEAL. 2. DURING THE COURSE OF HEARING, LEARNED COUNSEL FOR THE ASSESS EE HAS SUBMITTED THAT THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE NET PROFIT AT 8% OF THE GROSS RECEIPTS. THE ASSESSEE ITA NO. 364 /14 2 PREFERRED AN APPEAL BEFORE THE CIT(A) BUT DID NOT FIND ANY FAVOUR WITH HIM. NOW, THE ASSESSEE IS IN APPEAL BEFORE US WITH THE SUBMISSION THAT HE HAS PRODUCED THE BOOKS OF ACCOUNTS BEFORE THE AO BUT HE HAS NOT EXAMINED THE SAME AND REJECTED THE BOOKS OF ACCOUNT FOR ESTIMATING THE NET PROFIT. THE TURNOVER OF THE ASSESSEE IS MORE THAN RS.1 CRORE, THEREFORE, PROVIS IONS OF SECTION 44AD OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS THE ACT) CANNOT BE APPLIED BUT THE AO HAS ESTIMATED AT 8% KEEPING IN VIEW THE PROVISIONS OF SECTION 44AD OF THE ACT. LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO SUBMITTED THAT IN EARLIE R ASSESSMENT YEARS THE ASSESSEE HAS DISCLOSED THE NET PROFIT RATE AT 3.43 % TO 5. 43 % , THEREFORE, THE SAME MAY BE ADOPTED AND THE BOOKS RESULTS MAY BE ACCEPTED. 3. LD. DR PLACED RELIANCE ON THE ORDER OF THE CIT(A). 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT BEFORE THE AO AND THE AO HA D NO OPTION BUT TO REJECT THE BOOKS OF ACCOUNT. AFTER REJECTING THE BOOKS OF ACCOUNT THE AO ESTIMATED THE NET PROFIT AT 8% IN THE LIGHT OF TH E PROVISIONS OF SECTION 44AD OF THE ACT. UNDISPUTEDLY THE GROSS TURNOVER IS MORE THAN RS. 1 CRORE, THEREFORE, THE PROVISIONS OF SECTION 44AD CANNOT DIRECTLY BE APPLIED. THE AO HAS NOT BROUGHT ANY COMPARABLE CASE ON THE BASIS OF WHICH HE HAS ESTIMATED THE NE T PROFIT RATE AT 8%. WE HAVE ALSO EXAMINED THE BOOK RESULT S DECLARED BY THE ASSESSEE FOR OTHER ASSESSMENT YEARS BUT IN THOSE ASSESSMENT YEARS THE ASSESSMENTS WERE FRAMED UNDER SECTION 143(1) OF THE ACT, THEREFORE, THERE IS NO APPLICATION ITA NO. 364 /14 3 OF MIND OF THE A O TO THE NET PROFIT DECLARED BY THE ASSESSEE. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE NET PROFIT ESTIMATED BY THE AO IS ON HIGHER SIDE. WE, THEREFORE, OF THE VIEW THAT THE NET PROFIT RA TE AT 7% WOULD BE REASONABLE AND ACCORDINGLY, WE DIRECT THE AO TO ESTIMATE THE NET PROFIT RATE AT 7% OF THE TOTAL TURNOVER TO MEET THE END OF JUSTICE. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 9 / 05 / 201 5 . SD/ - SD/ - ( . . ) (B. P. JAIN) ( ) (SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 29 /0 5 / 201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUT TACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , CUTTACK 6. [ / GUARD FILE. //TRUE COPY//