M/s D.L. Lamba & Sons, Yamunanagar V. JCIT, Range, Yamunanagar

ITA 480/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7558 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTASR
• Keywords: Rejection of books of accounts; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMD, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 480/CHD/2018 (ASSESSMENT YEAR : 2008-09) M/S D.L. LAMBA & SONS, VS. THE JCIT, 603, SANTPURA, MODEL TOWN, RANGE, YAMUNA NAGAR, YAMUNA NAGAR. YAMUNA NAGAR. PAN : AAEFD8356L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI AKHILESH GUPTA,SR.DR DATE OF HEARING : 27.06.2018 DATE OF PRONOUNCEMENT : 17.07. 2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 02.11.2018 OF CIT(A), KARNA L PERTAINING TO 2008-09 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. THAT THE IMPUGNED ORDER IS BAD BOTH ON FACTS AND LA W TO THE EXTENT ADDITIONS ARE CONFIRMED. 2. THAT THE ID. APPELLATE AUTHORITY HAS WRONGLY AND IL LEGALLY CONFIRMED THE REJECTION OF BOOKS OF ACCOUNTS BY THE ASSESSING OFF ICER AGAINST THE MATERIAL AND EVIDENCE ON RECORD. 3. THAT THE ID. APPELLATE AUTHORITY HAS WRONGLY AND IL LEGALLY APPLIED THE G.P. @ 10% IGNORING THE WRITTEN SUBMISSIONS AND ALT ERNATIVELY BEING HIGHLY EXCESSIVE AND ARBITRARY. 4. THAT THE ID. APPELLATE AUTHORITY HAS WRONGLY AND ILLEGALLY MADE ADDITION OF INTEREST INCOME OF RS 1,54,578/- ALTHOUGH NET PROFI T RATE HAS BEEN APPLIED. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BEHALF O F THE ASSESSEE. THE APPEAL WAS PASSED OVER. THE ASSESSEE STILL REMAINED UNREPRESENTED. HOWEVER, ON CONSIDERING THE MATERIAL AV AILABLE ON RECORD, IT WAS CONSIDERED APPROPRIATE TO PROCEED WITH TH E PRESENT APPEAL EX-PARTE QUA THE ASSESSEE APPELLANT ON MERITS A FTER HEARING THE LD. SR.DR. 3. THE RECORD SHOWS THAT THE ASSESSEE IS A CONTRACTO R AND HAS DECLARED A NET PROFIT OF RS. 16,53,395/- ON CONTRACT RECEIP TS OF RS. 3,05,99,180/- GIVING NET PROFIT RATE OF 5.40% WHICH ALSO INCLUDE D THE INTEREST INCOME OF RS. 1,54,578/-. THE AO CONSIDERING THE F ACT THAT IF ITA 480/CHD/2018 A.Y.2008-09 PAGE 2 OF 3 THE INTEREST INCOME IS REDUCED THEN THE EFFECTIVE PROFIT RA TE WOULD BE 4.90% REQUIRED THE ASSESSEE TO JUSTIFY THE SAME. THE AO FURTHER QUESTIONED THE FALL IN NP RATE OF THE ASSESSEE WHEN COMPA RED TO THE PREVIOUS YEAR. AFTER CONSIDERING THE REPLY OF THE ASSESSE E, FOR THE REASONS SET OUT IN PARA 2.3 OF THE ASSESSMENT ORDER, TH E EXPLANATION WAS REJECTED. THEREAFTER, THE AO REQUIRED THE ASSESSEE TO JUSTIFY WHY NET PROFIT RATE @ 12% NOT TO BE APPLIED IN THE LIGHT OF T HE CASELAW AVAILABLE IN THE CASE OF PRABHAT KUMAR CONTRACTOR, SIRSA IN ITA NO. 293 OF 2008 DATED 14.11.2008. CONSIDERING THE REPLY OF THE AS SESSEE, THE AO APPLIED RATE OF 10% AND FURTHER MADE THE ADDITION OF IN TEREST INCOME SHOWN IN THE RETURN. 4. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE ASSAILED THE ACTIONS OF THE AO. RELYING ON M/S YASH PAL CHOPRA & CO., YAMUNA NA GAR WHEREIN THE GP RATE FROM SIMILAR ACTIVITY IN 2007-08 ASSESS MENT YEAR HAD BEEN ESTIMATED AT 6%, IT WAS REQUESTED THAT IF ESTIMA TION HAS TO BE DONE THEN SAID DECISION SHOULD BE APPLIED. HOWEVER, THE CIT (A) AFTER EXTRACTING THE WRITTEN SUBMISSIONS ON BEHALF OF THE ASSESS EE AS WELL AS THE ASSESSMENT ORDER PROCEEDED TO UPHOLD THE ADDITION HOLDING AS UNDER : IN THE CIRCUMSTANCES, THE ADDITION MADE BY THE AO @ 10% OF N.P. IS ABSOLUTELY JUSTIFIED AND I CONFIRM THE SAME. THIS GROUND OF A PPEAL IS DISMISSED. 5. THE LD. SR.DR THOUGH RELIES UPON THE ORDER, HOWEVER, IN THE ABSENCE OF ANY DISCUSSION IN THE ORDER WAS UNABLE TO STA TE WHY THE ARGUMENTS/PRAYER OF THE ASSESSEE WERE REJECTED. 6. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. ON A CAREFUL PERUSAL OF THE SAME, WE FIND THAT T HE CRYPTIC NON- SPEAKING CONCLUSIONS OF THE CIT(A) CANNOT BE UPHELD AS THE RE IS NO DISCUSSION WHAT-SO-EVER IN THE ORDER WHICH HIGHLIGHTS THE REASONS FOR REJECTING THE SUBMISSIONS. AS NOTED, THE LD. SR.DR WAS ALSO UNABLE TO SHOW HOW IT CAN BE SAID TO BE AN ORDER PASSED IN ACCOR DANCE WITH LAW WHEREIN THE REASONING FOR THE CONCLUSIONS DRAWN IS COMPLE TELY MISSING. HE WAS ALSO REQUIRED TO ADDRESS WHY THE ARGUMENTS ADV ANCED ON BEHALF OF THE ASSESSEE MAY NOT BE ACCEPTED. WE FURTHER FIND THAT THERE IS NO DISCUSSION ON THE PAST HISTORY OF THE ASSESSEE ITSE LF THOUGH A DROP IN THE NP RATE HAS BEEN NOTICED BY THE AO IN PARA 2.1. HOWEVER, WHAT WAS THE PAST HISTORY OF THE ASSESSEE QUA THE ISSUE, THE RE IS NO DISCUSSION. ACCORDINGLY, IN THE PECULIAR FACTS AND CIRCUMSTA NCES OF THE ITA 480/CHD/2018 A.Y.2008-09 PAGE 3 OF 3 CASE, WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORDAN CE WITH LAW TAKING INTO CONSIDERATION THE PAST HISTORY OF THE ASSESSE E ITSELF, THE AO SHALL ALSO CONSIDER THE APPLICABILITY OF DECISIONS STATED TO BE FROM SIMILAR ACTIVITY PERTAINING TO THE VERY SAME PERIOD NOTICED IN THE EARLIER PART OF THIS ORDER. NEEDLESS TO SAY THAT THE AO SHALL PA SS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.07. 2018. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.