Shree Daxesh Kumar Ratilal Patel, Baroda V. The Income tax Officer, Ward-3(1), Baroda

ITA 442/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2895 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; TDS; Set aside
• Section: 148

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.442/AHD/2017 / ASSTT. YEAR: 2010-2011 SHRI DAXESH KUMAR RATILAL PATEL AT & POST PADRA NAVI PANSHARWAD, NAVBAPARA TAL. PADRA DIST-BARODA PAN : AWOPP 7885 J VS. ITO, WARD-3(1) BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SUCHIT PATEL, AR REVENUE BY : SHRI VIRENDRA SINGH, SR.DR ! / DATE OF HEARING : 04/03/2019 '#$ ! / DATE OF PRONOUNCEMENT: 05/03/2019 %& / O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-2, VADODARA DATED 17.11.2016 PASSED FOR T HE ASSTT.YEAR 2010-11. 2. THE ASSESSEE HAS TAKEN FOUR GROUNDS OF APPEAL, B UT HIS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D.CIT(A) HAS ERRED IN CONFIRMING THE ESTIMATION OF NET PROFIT AT 10% OF THE GROSS RECEIPT OF RS.2,77,41,535/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE WAS ENGAGED IN THE BUSINESS OF LABOUR CONTRACT. ACCORDING TO THE AO, HE HAS NOT FILED RETURN OF INCOME. A NOTIC E UNDER SECTION 148 OF THE INCOME TAX ACT WAS ISSUED ON THE BASIS O F TDS STATEMENT COMMUNICATED TO THE AO AS PER INFORMATION IN FORM ITA NO.442/AHD/2017 2 NO.26AS. THE LD.AO HAS CONFRONTED THE ASSESSEE AS TO WHY ON RECEIPT TOTAL RECEIPT, ON WHICH TDS OF RS.4,08,731/ - HAS BEEN DEDUCTED, PROFIT SHOULD NOT BE ESTIMATED. IN RESPO NSE TO THE QUERY OF THE AO, IT WAS CONTENDED BY THE ASSESSEE T HAT QUANTIFICATION OF GROSS RECEIPT AT RS.2,77,41,535/- IS NOT JUSTIFIABLE BECAUSE IT CONTAINED COST OF MATERIAL SUPPLIED BY T HE CONTRACTEE AT RS.57,27,900/-. IN OTHER WORDS, THE ASSESSEE SUBMI TTED THAT THIS AMOUNT OF RS.57,27,900/- BE EXCLUDED FROM THE GROSS RECEIPTS WORKED OUT BY THE AO ON THE BASIS OF TDS CERTIFICAT E. THIS CONTENTION OF THE ASSESSEE WAS REJECTED BY THE LD.A O. HE ESTIMATED THE PROFIT AT 10% OF THE GROSS RECEIPT. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT T HOUGH THE APPLICATION FOR PRODUCTION OF ADDITIONAL EVIDENCE W AS SUBMITTED BEFORE THE LD.CIT(A), BUT THESE EVIDENCES HAVE NOT BEEN TAKEN ON RECORD. THE TAX CONSULTANT HAS NOT PROPERLY PROSEC UTED THE APPEAL BEFORE THE LD.CIT(A) AND SOUGHT VARIOUS ADJOURNMENT S. HE PRAYED THAT HE ASSESSEE IS POSSESSING BILLS RAISED ON DINE SHCHANDRA R. AGRAWAL INFRACON P.LTD. FOR WHOM, HE HAS WORKED AS A LABOR CONTRACTOR. THE LD.DR OPPOSED THE CONTENTIONS OF T HE ASSESSEE ON THE GROUND THAT BEFORE THE AO HE SHOULD HAVE PRODUC ED THESE BILLS. HIS CASE DOES NOT FALL WITHIN ANY OF THE CL AUSES OF (1) TO (4) OF RULE 46A OF THE INCOME TAX RULES, 1962. THEREFO RE, THE LD.CIT(A) HAS RIGHTLY NOT PERMITTED TO PLACE THESE DOCUMENTS ON RECORD. 5. I HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GON E THROUGH THE RECORD CAREFULLY. AS FAR AS DETERMINATION OF P ROFIT AT THE RATE OF 10% ON THE CONTRACTUAL RECEIPT IS CONCERNED, THE ASSESSEE DID ITA NO.442/AHD/2017 3 NOT DISPUTE ADOPTION OF THIS RATE AT 10%. DISPUTE RELATES TO QUANTIFICATION OF GROSS RECEIPTS, I.E. WHETHER RS.2 ,77,41,535/- ON WHICH TDS WAS DEDUCTED OR RS.1,92,89,404/- WHICH HA S BEEN RECEIVED BY THE ASSESSEE, AS PER HIS STAND. ACCORD ING TO THE ASSESSEE, MATERIAL EQUIVALENT TO VALUE OF RS.57,27, 900/- WAS SUPPLIED BY THE CONTRACTEE I.E. DINESHCHANDRA R. AG RAWAL INFRACON P.LTD. AND M.V. OMNI PROJECTS (INDIA) LTD. FOR WHOM HE HAS WORKED AS A LABOUR CONTRACTOR. TO MY MIND, THE CON TROVERSY COULD BE SILENCED, HAD THE LD.AO ISSUED A SHOW CAUSE NOTI CE TO BOTH THESE CONCERNS AND OBTAIN CLARIFICATION/CONFIRMATIO N FROM THESE PARTIES. ROLE OF THE AO IS NOT ONLY A PROSECUTOR R ATHER HE WORKS AS AN ADJUDICATOR ALSO. HE HAS TO ADOPT A FAIR PRO CEDURE FOR DETERMINING TAXABLE INCOME OF THE ASSESSEE. IT IS ALSO PERTINENT TO OBSERVE THAT QUASI JUDICIAL AUTHORITIES ARE BEING RESPECTED NOT ON ACCOUNT OF THEIR POWER TO LEGALISE THE INJUSTICE ON TECHNICAL GROUNDS, RATHER FOR REMOVING THE INJUSTICE. THE AO IS EXPECTED TO DETERMINE THE CORRECT RECEIPTS. ONCE A STAND HAS B EEN TAKEN BY AN ASSESSEE, HE SHOULD HAVE VERIFIED THAT STAND. C ONSIDERING THE ABOVE, I SET ASIDE BOTH THE ORDERS OF THE REVENUE A ND REMIT THIS ISSUE TO THE FILE OF AO. THE LD.AO SHALL DETERMINE THE CORRECT CONTRACTUAL RECEIPTS AFTER CONSIDERING THE STAND OF THE ASSESSEE, AND THEREAFTER APPLY THE RATE OF PROFIT AT 10% AS A DOPTED IN THE ORIGINAL ASSESSMENT PROCEEDINGS FOR WORKING OUT THE PROFIT EARNED BY THE ASSESSEE. 6. OBSERVATION MADE BY ME WILL NOT IMPAIR OR INJURE THE CASE OF THE AO NOR CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLA NATION OF THE ASSESSEE. THE ASSESSEE WILL BE AT LIBERTY TO SUBMI T ANY MATERIAL IN SUPPORT OF HIS CASE THAT ACTUAL GROSS RECEIPTS RECE IVED BY HIM ARE OF RS.1,92,89,404/- AND NOT RS.2,77,4,535/-. WITH THE ABOVE ITA NO.442/AHD/2017 4 OBSERVATION, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 5 TH MARCH, 2019. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 05/03/2019