ACIT, BIKANER V. M/s. Gopal Ram Pema Ram, BIKANER

ITA 418/JODH/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78228 (ITAT-JODHPUR)
• Duration Of Justice: 6 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 06-06-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Depreciation
• Section: 145

Judgement Text

IN TH E INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI , ACCOUNTANT MEMBER. ITA NO. 418 /JU/200 8 [A.Y: 2004 - 05 ] THE A.C.I.T VS. M/S GOPAL RAM PEMA RAM CIRCLE 2 KARMISAR BIKANER BIKANER PAN NO : AABFG 1491 J (APPELLANT) (RESPONDENT) ASSESSEE BY : S HRI SURESH OJHA DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 1 2 / 0 6 /201 4 . DATE OF PRONOUNCEMENT : 15 /0 7 /201 4 . O R D E R PER HARI OM MARATHA , J .M TH IS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER DATED 1 9 / 03 / 20 06 OF L D . CIT(A) , BIKANER. 2. THE FOLLOWING SOLE GROUND HA S BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING TO APPLY NET PROFIT RATE OF 8.48% BEFORE ALLOWING CLAIM FOR DEPRECIATION, INTEREST & REMUNERATION TO PARTNERS AND INTEREST PAID TO THIRD PARTIES 2 AS AGAINST NET PROFIT RATE APPLIED BY THE A.O. AT 10.5% SUBJECT TO DEPRECIATION AND INTEREST AND REMUNERATION PAID TO THE PARTNERS WHEN PROVISIONS OF SEC . 145 OF THE ACT, ARE CLEARLY APPLICABLE AND ALSO NOT DISPUTED BY THE ASSESSEE. 3. BRIEFLY STATED, THE FACTS OF THE CASE A RE THAT THE ASSESSEE IS A PARTNERSHIP FIRM DERIVING ITS INCOME FROM EXECUTION OF CONTRACT WORK UNDERTAKEN FROM GOVERNMENT DEPARTMENT. THE BOOKS OF ACCOUNT WERE REJECTED U/S 145(3) OF THE INCOME - TAX ACT, 1961 ['THE ACT', FOR SHORT] AND NET PROFIT RATE WAS APPLIED. THE TRIBUNAL HAS ALSO CONFIRMED THE APPLICATION OF PROVISIONS OF SECTION 145(3) OF THE A C T BUT THE ASSESSEE HAD CLAIMED INTEREST PAID TO THIRD PARTIES WHILE ESTIMATING PROFIT UNDER THIS SECTION. THIS ISSUE WAS STATED TO BE COVERED BY THE DECISIO N OF THIS VERY BENCH RENDERED IN THE CASE OF M/S GANESH GARHIA CONSTRUCTION CO. VS. ACIT FOR A.Y. 2004 - 05 IN ITA NO. 430/JODHPUR/2008 WHICH WAS ALSO CORRECTED/RECTIFIED VIDE MA NO. 04/JU/2013 VIDE ORDER DATED 02.05.2014. ACCORDINGLY, THE ORDER PASSED BY T HE TRIBUNAL ON 31.12.2008 IN THIS CASE WAS RECALLED AND ONLY TO THAT EXTENT THE APPEAL WAS HEARD. THE ISSUE OF PAYMENT OF INTEREST TO THIRD PARTIES BEING CLEARLY COVERED BY THE TRIBUNAL ORDER AND THEIR CONSISTENT VIEW, WE MODIFY THE ORDER ACCORDINGLY BY M AKING OBSERVATION THAT AFTER INVOKING PROVISIONS OF SECTION 145(3) OF THE ACT IN THIS CASE, INTEREST PAID TO THIRD PARTIES IS ALSO ALLOWABLE. 3 ACCORDINGLY, RESULT OF THE APPEAL SHALL REMAIN SAME I.E. APPEAL SHALL BE PARTLY ALLOWED. 4 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ( ORDER PRONO UNCED IN THE COURT ON 15 TH JU LY , 201 4 ) . SD/ - SD/ - (N.K.SAINI) ( HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15 TH JULY , 201 4 . VL / COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR .