M/s Five Star Builders, Shimla V. DCIT, Shimla

ITA 413/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9907 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 413/CHD/2016 ASSESSMENT YEAR: 2008-09 M/S FIVE STAR BUILDERS, VS THE DCIT, NANGAL DEVI, THEOG, RAILWAY BOARD BUILDING, DISTT. SHIMLA (HP). SHIMLA. PAN: AAAFF3620R (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 23.06.2016 DATE OF PRONOUNCEMENT : 24.06.2016 O R D E R THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST ORDER OF LD. CIT(APPEALS) DATED 05.02.2016 AND PERTAINS T O ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL REA D AS UNDER : 1. THAT THE ORDERS OF THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) ARE BAD IN LAW AND FACTS OF THE CASE. 2. THE ASSESSING OFFICER HAS, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE ERRED ON FACTS AND IN LAW IN MAKING THE ADDITION OF RS.3,66,720/- ON ACCOUNT OF ALLEGED PUR CHASES WITHOUT ANY BILL/ VOUCHERS. THE ADDITIONS HAVE BEEN MAD E WITHOUT MAKING ANY ENQUIRIES FROM THE SELLERS WHEN THE COPY OF ACC OUNT OF SELLER AS WELL THE ADDRESS OF THE SELLER WAS SUPPLIED TO T HE ASSESSING OFFICER AND LD. CIT(A). 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE INCOME TAX 2 OFFICER HAS GROSSLY ERRED IN DISALLOWING THE EXPENS ES CLAIMED BY THE ASSESSEE UNDER THE HEAD MATERIAL ON ACCOUN T OF PURCHASE OF GRIT, CRUSHER SAND AND SAND TO THE TUNE OF RS. 3,66,720/- WHEN THE PAYMENT HAVE BEEN MADE THROUGH ACCOUNT PAYEE CHEQUE. 4. THAT THE ORDERS OF LD. CIT(APPEALS) AS WELL AS THAT OF ASSESSING AUTHORITY BE QUASHED AND ADDITION MADE TO THE TUNE OF RS. 3,66,720/- BE DELETED AND RETURNED INCO ME BE ACCEPTED AND ANY OTHER RELIEF THE HON'BLE COURT DEE MS FIT BE ALLOWED TO THE APPELLANT. 2. IN THIS CASE THE ASSESSEE FIRM DEALS IN CIVIL CONTRACTS OF THE GOVERNMENT DEPARTMENTS. IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER ACCEPTE D THE NET PROFIT RATE OF THE ASSESSEE AND ALSO NOTED THAT THERE IS MARGIN INCREASE IN THE NET PROFIT RATE. HOWEVER, HE MADE DISALLOWANCE OF RS. 3,66,720/- BY OBSERVING AS UNDER : DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS SEEN THAT THE ASSESSEE HAS DEBITED RS. 366,720/- UNDER THE HEAD MATERIAL I.E. FOR THE PURCHASE OF GRIT, CRUSHER AND SAND. NO BILLS HAVE BEEN PRODUCED ON THIS ACCOUNT FOR THE PURCHASE OF THE MATERIAL. FURTHER THE VOUCHERS PRODUCED DURING THE CURSE OF ASSESSMENT PROCEEDINGS ARE SELF- MADE, EVEN WITHOUT SIGNATURES. THE DETAILS FURNISHED IN THIS REGARD ARE ALSO UNSIGNED. HENCE THE SAME I.E. RS. 366,720/- IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 3 3. UPON ASSESSEE'S APPEAL, THE LD. CIT(APPEALS) AFFIRMED THE ASSESSING OFFICERS ACTION. 4. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD LD. DR AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF THE ASSESSEE. AN ADJOURNMENT PETITION HAS BEEN MOVED ON BEHALF OF TH E ASSESSEE. BUT THE SAME HAS BEEN REJECTED AS IT IS CONSIDERED THAT THE ISSUE CAN BE DISPOSED OFF BY HEARING THE LD. DR AND PERUSING THE RECORDS. 6. UPON CAREFUL CONSIDERATION, I FIND THAT AUTHORITIES BELOW HAVE ACCEPTED THE GROSS PROFIT RA TE OF THE ASSESSEE. THEY HAVE ALSO NOTED THAT THERE HAS BEEN A MARGINAL INCREASE IN THE SAME. BUT, THEY HAVE DISALLOWED A SUM OF RS. 366,720/- WHICH IS ON ACCOU NT OF PURCHASE OF GRIT AND SAND ON THE PLEA THAT PROPE R BILLS AND VOUCHERS ARE NOT THERE. IN THIS REGARD, IT IS THE PLEA OF THE ASSESSEE THAT IN ASSESSEE'S LINE OF CIVIL CONTRACT BUSINESS, IT IS NOT POSSIBLE TO OBTAIN VER IFIED OUTSIDE VOUCHERS FOR GRIT AND SAND. HENCE, THERE IS BOUND TO BE SOME SHORTFALL IN OUTSIDE VOUCHERS. IT IS FURTHER PLEA OF THE ASSESSEE THAT ADDITION HAS BEEN MADE WITHOUT ANY ENQUIRY FROM THE SELLERS WHEN THE COPY OF ACCOUNT OF SELLER AS WELL AS THE ADDRESS OF THE SELLER WAS SUPPLIED TO THE ASSESSING OFFICER AND LD . CIT(APPEALS). I FIND THAT ABOVE SUBMISSION OF THE 4 ASSESSEE HAVE SUFFICIENT COGENCY. IN THESE CIRCUMSTANCES, I REMIT THE ISSUE TO THE FILE OF ASS ESSING OFFICER TO MAKE THE NECESSARY ENQUIRY AS REQUESTED BY THE ASSESSEE AND THEREAFTER PASS AN ORDER AS PER LA W AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THIS APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER DATED: 24 TH JUNE, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD