ACIT, SRIGANGANAGAR V. M/s. Ganesh Builders, SRIGANGANAGAR

ITA 433/JODH/2008

• Counselvise Citation: 43323314 RSA 2008
• Duration Of Justice: 6 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 16-06-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Depreciation

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 . 433 /J U /20 08 (A.Y. 200 4 - 05) THE ACIT , CIRCLE, VS. M/S. G A NESH BUILDERS, SRIGANGANAGAR. 1 - C - 19, JAWAHAR NAGAR, SRIGANGANAGAR. PAN NO. AA B F G 1354 Q (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 : 21 /0 7 /201 4 . O R D E R PER HARI OM MARATHA , J .M TH IS IS AN APPEAL BY THE DEPARTMENT DIRECTED AGAINST THE ORDER DATED 2 8 /0 3 /20 08 OF L D . CIT(A) , J ODHPUR . 2. THE FOLL O WING 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 NP RATE OF 8.14% SUBJECT TO INTEREST, REMUNERATION TO PARTNERS, DEPRECIATION AND THIRD 2 PARTY INTEREST AS AGAINST NP RATE OF 8% SUBJECT TO INTEREST AND REMUNERATION TO PAR TNERS WHEN PROVISIONS OF SECTION 1435 OF THE I.T. ACT, 1961 ARE CLEARLY APPLICABLE. 3 . BRIEFLY STATED, THE FACTS OF THE CASE ARE 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 AC T', FOR SHORT] AND NET PROFIT RATE WAS APPLIED. THE TRIBUNAL HAS ALSO CONFIRMED THE APPLICATION OF PROVISIONS OF SECTION 145(3) OF THE ACT 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 DECISION 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/JU/2008 WHICH WAS ALSO CORRECTED/RECTIFIED VIDE MA NO. 04/JU/2011 VIDE ORDER DATED 02.05.2014. ACCORDINGLY, THE ORDER PASSED BY THE TRIBUNAL ON 10 . 07 .200 9 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 MAKING 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 DEPARTMENT IS PARTLY ALLOWED. ( ORDER PRONO UNCED IN THE COURT ON 21 ST JULY , 201 4 ) . SD/ - SD/ - (N.K.SAINI) ( HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 ST 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 .