A.K.Mishra, Dowlaiswaram V. THE ACIT, Rajahmundry

ITA 384/VIZ/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0259 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B BABU RAO
• Keywords: Business income; Charitable institution
• Section: 144

Judgement Text

ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.384/VIZAG/2014 ( / ASSESSMENT YEAR : 2009-10 ) A.K. MISHRA DOWLAISWARAM VS. ACIT, CIRCLE-1 RAJAHMUNDRY [ PAN: AFXPM1890E ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI C. SUBRAHMANYAM, AR -., / / RESPONDENT BY : SHRI B. BABU RAO , DR / 3 / DATE OF HEARING : 15.09.2015 / 3 / DATE OF PRONOUNCEMENT : 24.09.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-11, MUMBAI, CAMP OFFICE VISAKHAPATNAM DATED 27.2.2014 O N THE FOLLOWING GROUNDS: ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 2 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE THE ORDERS PASSED U/S.144A OF THE I.T. ACT ARE CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE. 2. THE PERCENTAGE OF PROFIT ADOPTED BY THE LEARNED COMMISSIONER OF INCOME TAX(A) (IN SHORT 'CIT(A)'), WHILE ESTIMATING BUSINESS INCOME OF THE APPELLANT, IS VER Y MUCH ON THE HIGHER SIDE AND THE SAME HAS NO BASIS. 3. THE LEARNED CIT(A) AS HE WAS UNDER THE WRONG NOT ION THAT THE BUSINESS OF THE ASSESSEE IS CIVIL CONTRACTS APPLIED PERCENTAGE OF PROFIT AT 12.5% WHEN THE NATURE OF BUSINESS OF T HE ASSESSEE IS FABRICATION AND ERECTION IN WHICH THERE WAS NO SCOP E TO EARN SUCH HUGE PERCENTAGE OF PROFIT. 4. FOR THESE AND OTHER REASONS THAT ARE TO BE URGED AT THE TIME OF HEARING OF THE CASE, THE APPELLANT PRAYS, T HE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(A) IS AGAINST THE PROVISIONS OF LAW, FACTS OF THE CASE, T HEREFORE, THE SAME NEEDS TO BE MODIFIED IN THE INTEREST OF JUSTICE. 2. THE ASSESSEE IS AN INDIVIDUAL AND HE IS ENGAGED IN THE BUSINESS OF EXECUTION OF CIVIL CONTRACTS INVOLVING FABRICATION AND ERECTION WORKS. THE ASSESSEE HAS FILED HIS RETURN OF INCOME OF RS.16,48 ,160/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESS U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED ACT). THEREAFTER, A NOT ICE U/S 143(2) OF THE ACT WAS ISSUED DIRECTING THE ASSESSEE TO APPEAR BEF ORE THE A.O. THE ASSESSEE NEITHER HIMSELF APPEARED NOR HIS C.A. APPE ARED BEFORE THE A.O. THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT U/S 144A OF THE ACT. ACCORDINGLY, ADDITIONS WERE MADE. ASSESSEE HA S CARRIED THE MATTER BEFORE THE CIT(A). THE CIT(A) HAS CONFIRMED THE OR DER OF THE A.O. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER BEFORE THE TRIBUNAL. ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 3 3. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ORDER PASSED BY THE CIT(A) ESTIMATING PROFIT AT 12.5% IS ON HIGHER SIDE AND SUBMITTED THAT IN THE A.Y. 2007-08, U/S 143( 3) OF THE ACT, A.O. HAS ACCEPTED THE PROFIT DECLARED BY THE ASSESSEE AT 5.4 8% AND IN A.Y. 2008- 09 AT 3.67% AND IN A.Y. 2009-10 AT 4.20% (PAPER BO OK PAGE 6) AND SUBMITTED THAT ESTIMATION OF PROFIT MAY BE RESTRICT ED TO 5.48%. 4. ON THE OTHER HAND, THE LD. D.R. HAS STRONGLY SUP PORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE IS IN THE BUSINESS OF CIVIL CONSTRUCTION, FABRICATION AND ERE CTION WORKS. HE FILED A RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS.16 ,48,160/-. WHEN THE A.O. HAS ASKED THE ASSESSEE TO APPEAR BEFORE HIM, T HE ASSESSEE FAILED TO DO SO. THEREFORE, A.O. HAS PASSED AN ORDER U/S 144 OF THE ACT. BEFORE CIT(A), ASSESSEE HAS FILED BOOKS OF ACCOUNTS , WHICH WERE REJECTED BY THE LD. COMMISSIONER AND ESTIMATED PR OFIT RATE AT 12.5% WE HAVE CONSIDERED THE PAPER BOOK FILED BY THE ASSES SEE, WHEREIN AT PAGE 6 ASSESSEE HAS GIVEN DETAILS IN RESPECT OF PRO FIT MARGIN FOR THE ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10 AT 5.48 %, 3.67% & 4.20% RESPECTIVELY. KEEPING IN VIEW OF THE ABOVE F ACTS AND ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 4 CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT THE ESTIMATION MADE BY THE LD. COMMISSIONER I.E. AT 12.5% IS ON HI GHER SIDE. IN OUR OPINION, THE PROFIT RATE AT 6% IS A REASONABLE ESTI MATION IN THE LINE OF THE ASSESSEES BUSINESS. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE CIT(A). WE DIRECT THE A.O. TO ESTIMATE PROFIT R ATE AT 6% AND DIRECTED TO PASS ORDERS ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 24 TH SEPT15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 24 TH SEPT15 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT SHRI A.K. MISHRA, D.NO.5-45, NEAR SBI, KOTHAPETA ROAD, DOWLAISWARAM-533 125. 2. -., / THE RESPONDENT ACIT, CIRCLE-1, RAJAHMUNDRY 3. ; () / THE CIT(A)-11, MUMBAI, CAMP: OFFICE: VISAKHAPATNAM 4. ; / CIT, VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE BY ORDER