SHRI TIKAM KHANDELWAL, Jaipur V. ACIT, Jaipur

ITA 470/JPR/2011

• Counselvise Citation: 47023114 RSA 2011
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 18-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K L MOOLCHANDAN I; R K KHUTETA
• Section: 40A(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.470/ JP/2011 ASSESSMENT YEAR 2003-04 PAN: AKGPK 7401 H SHRI TIKAM KHANDELWAL VS. THE ACIT A-2, RANA PRATAP NAGAR CENTRAL CIRCLE- 1 JHOTWARA, JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI K.L. MOOLCHANDANI & SHRI R.K. KHUTETA DEPARTMENT BY : SHRI SUNIL MATHUR DATE OF HEARING: 2-08-2011 DATE OF PRONOUNCEMENT: 19-08-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL JAIPUR DATED 18-03-2011 FOR THE ASSESSMENT YEAR 2003-04. 2.1 THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 1,27,89 2/- U/S 40A(3) OF THE ACT. 2.2 THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,23,700/- ON ACCOUNT OF 2 DISALLOWANCE OUT OF CONSTRUCTION EXPENSES BY RESTRI CTING SUCH DISALLOWANCE TO 20%. 2.3 WE HAVE HEARD BOTH THE PARTIES. DURING THE YEAR , THE ASSESSEE HAS SHOWN THE NET PROFIT RATE OF 11.76% ON THE TURNOVER OF RS. 8.71 LACS. IF THE ADDITION AS CONFIRMED BY THE LD. CIT(A) IS CONSIDER ED THEN THE NET PROFIT RATE WILL COME TO 25.96%. LOOKING TO THE NET PROFIT RATE SHOWN BY THE ASSESSEE AT 11.76% AND CONSIDERING THE TURNOVER OF RS. 8.71 LA CS, WE FEEL THAT IT WILL BE FAIR AND REASONABLE RESTRICT THE DISALLOWANCE TO RS . 10,000/- AS EXPENSES ARE NOT FULLY VERIFIABLE FROM THE VOUCHERS. THE JAIPUR BENCH IN THE CASE OF SINGHAL BUILDERS CONTRACTORS VS. ADDL. CIT 12 TAXMA N.COM 199 HAS HELD THAT NO DISALLOWANCE CAN BE MADE U/S 40A(3) IN CASE THE GROSS PROFIT RATE OR NET PROFIT RATE IS APPLIED. FOLLOWING OUR ORDER FOR THE ASSESSMENT YEAR 2008- 09 IN THE CASE OF SHRI SHANKAR LAL KHANDELWAL IN ITA NO . 392/JP/2011 , WE HOLD THAT THE NO DISALLOWANCE U/S 40A(3) IS TO BE M ADE BECAUSE THE BOOKS OF ACCOUNT ARE BEING REJECTED. THUS GROUND NO. 1 OF TH E ASSESSEE IS ALLOWED AND GROUND NO. 2 OF THE ASSESSEE IS PARTLY ALLOWED. 3 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19-0 8-2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 19/08/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI TIKAM KHANDELWAL, JAIPUR 2. THE ACIT, CENTRAL CIRCLE- 1, JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.470/JP /11 ) A.R, ITAT, JAIPUR 4 5