Sh. Mahesh Chandra Contractor, Etawah V. I.T.O., Etawah

ITA 382/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0542 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 9 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Business income; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.382/AGR/2012 ASSESSMENT YEAR: 2008-09 MAHESH CHANDRA CONTRACTOR, VS. INCOME TAX OFFICER , 1-B, FRIENDS COLONY, ETAWAH. ETAWAH. (PAN: AAJFM 4030 F). (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R . DATE OF HEARING : 23.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 29.01.2013 ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21.03.2012 PASSED BY THE LD. CIT(A)-II, AGRA FOR THE ASSESSMEN T YEAR 2008-09. 2. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOW EVER, WRITTEN SUBMISSION HAS BEEN FILED. 3. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E, I PROCEED TO DECIDE THE APPEAL ON MERIT AFTER CONSIDERING THE WRITTEN SUBMI SSIONS FILED BY THE ASSESSEE. ITA NO.382/AGR/2012 A.Y. 2008-09 2 4. THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSE E FILED RETURN DECLARING INCOME OF RS.1,49,790/-. DURING THE ASSESSMENT PRO CEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS DECLARED GROSS RECEIPT OF RS.1,08, 83,640/- FROM CIVIL CONSTRUCTION AND INTEREST OF RS.3,37,886/-. THE ASSESSEE DECLA RED N.P. OF RS.1,49,788/- INCLUSIVE OF INTEREST INCOME RS.3,37,886/-. THE A. O. FURTHER NOTICED THAT THE ASSESSEE HAS PRODUCED COMPUTERIZED CASH BOOK AND LE DGER. THE A.O. NOTICED THAT SOME OF THE VOUCHERS WERE SELF-MADE AND NOT MACHINE NUMBERS. THE ASSESSEE FAILED TO PRODUCE ALL RELEVANT BILLS AND VOUCHERS. THE A.O. ASKED THE ASSESSEE WHY THE BOOKS OF ACCOUNT SHOULD NOT BE REJECTED INVOKIN G SECTION 145(3) OF THE INCOME TAX ACT, 1961 FOR WHICH THE ASSESSEE DID NOT OBJECT TO THE ACTION OF THE A.O. THE A.O. HAS APPLIED 8% N.P. RATE AND ACCORDINGLY CALCU LATED RS.1,48,477/- ON TOTAL INCOME FROM CONTRACT BUSINESS OF RS.1,08,83,640/-. THE A.O. ADDED INTEREST INCOME OF RS.3,37,886/-. 5. THE CIT(A) HAS RELIED UPON THE JUDGMENT OF HONB LE MADRAS HIGH COURT IN THE CASE OF CIT VS. A. VAJJIRAM & BROS, 326 ITR 551 (MADRAS) WHEREIN INCOME ESTIMATED BY APPLYING 8% N.P. RATE WAS FOUND REASON ABLE. THE CIT(A) HAS ALSO RELIED UPON THE JUDGMENT OF HONBLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF CIT VS. PRABHAT KUMAR, 323 ITR 675 (P&H) WHEREIN N. P. RATE 12% WAS FOUND REASONABLE. THE CIT(A) CONFIRMED THE ORDER OF THE A.O. IN THE WRITTEN ITA NO.382/AGR/2012 A.Y. 2008-09 3 SUBMISSION THE ASSESSEE SUBMITTED THAT THE CIT(A) I S NOT CORRECT IN MENTIONING THAT ON 20.03.2012 NEITHER ANYBODY APPEARED NOR ANY ADJOURNMENT APPLICATION WAS FILED. IT IS SUBMITTED THAT ON 16.03.2012 WRITTEN ARGUMENTS WERE SENT BY SPEED POST TO THE CIT(A). IN THE WRITTEN ARGUMENT BEFORE THE CIT(A), IT WAS SPECIFICALLY MENTIONED THAT THE INTEREST INCOME WAS FROM FDR PLE DGED WITH BANK WHICH IS BUSINESS INCOME AND HENCE IT SHOULD NOT BE ADDED SE PARATELY. THE CIT(A) DID NOT CONSIDER THE WRITTEN SUBMISSION FILED ON 16.03.2012 . THE ASSESSEE, ALONG WITH THE WRITTEN SUBMISSION, HAS FILED A COPY OF ORDER OF I. T.A.T., AGRA BENCH IN ASSESSEES OWN CASE FOR A.Y. 2007-08 WHEREIN THE IN TEREST INCOME WAS ACCEPTED AS BUSINESS INCOME AND SEPARATE ADDITION OF INTEREST I NCOME WAS DELETED. 6. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF CIT(A). 7. I FIND THAT THE EFFECTIVE GRIEVANCE OF THE ASSES SEE IS THAT THE INTEREST INCOME IS PART OF CONTRACT BUSINESS AND, THEREFORE, SEPARA TE ADDITION IN ADDITION TO INCOME ESTIMATED BY APPLYING 8% N.P. RATE SHOULD NOT BE AD DED. I FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ASSESSEES OWN CASE FOR A.Y. 2007-08 IN ITA NO.138/AGRA/2012, ORDER DATED 14.09.2012. THE RELE VANT FINDING IS REPRODUCED AS UNDER :- 5. IN THE ASSESSMENT YEAR UNDER APPEAL ALSO, SIMIL AR BOOKS OF ACCOUNT WERE REJECTED. IN THE GROUNDS OF APPEAL, TH ERE IS NO CHALLENGE ITA NO.382/AGR/2012 A.Y. 2008-09 4 TO THE REJECTION OF BOOKS OF ACCOUNT. THERE IS NO C HANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS COMPARED TO THE EA RLIER YEAR. THE TRIBUNAL IN THE EARLIER YEAR CONFIRMED THE APPLICAT ION OF PROFIT RATE OF 8%, BUT DELETED THE SEPARATE ADDITION ON ACCOUNT OF INTEREST INCOME. FOLLOWING THE ORDER OF THE TRIBUNAL IN EARLIER ASSE SSMENT YEAR, WE CONFIRM THE ORDERS OF THE AUTHORITIES BELOW IN APPL YING THE PROFIT RATE OF 8%. HOWEVER, THE INTEREST INCOME OF RS.78,200/- SHOULD NOT BE ADDED SEPARATELY. THE ORDERS OF THE AUTHORITIES BEL OW TO THAT EXTENT ARE SET ASIDE AND MODIFIED AND WE DIRECT THAT NO SE PARATE ADDITION ON ACCOUNT OF INTEREST INCOME BE MADE IN THE CASE OF A SSESSEE. THUS, THE ASSESSEE WILL GET RELIEF OF RS.78,200/- AND REST OF THE ORDER OF THE LD. CIT(A) IS CONFIRMED. 8. SINCE THE ISSUE IS COVERED BY ASSESSEES OWN CAS E FOR A.Y. 2007-08 AND THE FACTS OF THE CASE IN THE YEAR UNDER CONSIDERATION, I.E. 2008-09, ARE IDENTICAL TO A.Y. 2007-08, I FOLLOW THE ORDER OF I.T.A.T., AGRA BENCH IN ASSESSEES OWN CASE IN ITA NO.138/AGRA/2012 AND IN THE LIGHT OF THAT I CONFIRM THE ORDER OF REVENUE AUTHORITIES APPLYING N.P. RATE OF 8%. HOWEVER, THE INTEREST INCOME OF RS.3,37,886/- SEPARATELY ADDED BY THE A.O. IS DELET ED. ACCORDINGLY ORDERS OF THE REVENUE AUTHORITIES TO THAT EXTENT ARE SET ASIDE AN D MODIFIED AND I DIRECT THE A.O. THAT NO SEPARATE ADDITION ON ACCOUNT OF INTEREST IN COME BE MADE IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE ALLOWED RELIEF OF RS.3 ,37,886/-. 9. BEFORE PARTING FROM THE MATTER, IT IS TO CLARIFY THAT BY DELETING THIS ADDITION OF SEPARATE INTEREST INCOME OF RS.3,37,886/- THE AS SESSED INCOME MUST NOT BE LESS THAN THE INCOME DECLARED BY THE ASSESSEE IN THE RET URN OF INCOME. ITA NO.382/AGR/2012 A.Y. 2008-09 5 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY