Unity Automation Solution Ltd. , New Delhi V. ITO ward-27(1), New Delhi

ITA 4816/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2318 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 44AD; 201; 139(1); 44AB; 147; 27; 148

Judgement Text

1 ITA NO. 4816/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I(2) + SM C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEM BER, AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 4816/DEL/2019 ( A.Y 2010-11) UNITY AUTOMATION SOLUTION LTD. B- 41, SHIVAM APARTMENTS, PLOT NO. 13, D- BLOCK, VIKASHPURI NEW DELHI AAACU9831A (APPELLANT) VS ITO WARD-27(1) NEW DELHI PIN 110002 (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. PRADEEP SINGH GAUTAM, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 27/03/2019 PASSED BY CIT(A)-16 NEW DELHI FOR ASSESSMENT YEAR 2018-19. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A) - 16 IS BAD BOTH ON THE FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 55,83,787/- MADE BY A.O BY ERRONEOUSLY APPLI ED SECTION 44AD OF THE ACT. 2. THAT THE LD. CIT (APPEALS) - 16 WITHOUT CONSIDER ING THE FACTS SUSTAINED THE ADDITION @ 8% ON TOTAL RECEIPTS OF RS. 3,54,30,497/ - FOR THE A.Y. 2010-11 BY TAKING GUIDANCE AS PER SECTION 44AD OF THE INCOME T AX ACT, 1961 WHEREAS DATE OF HEARING 05.03.2020 DATE OF PRONOUNCEMENT 20.03.2020 2 ITA NO. 4816/DEL/2019 THE SECTION 44AD SHALL 3. THAT SECTION 44AB OF THE INCOME TAX ACT, 1961 AP PLICABLE IN THE CASE AS THE GROSS RECEIPTS OF THE APPELLANT FOR THE A.Y. 20 10-11 EXCEEDS RS. 3.50 CRORE. THE A.O. ALSO INITIATED PENALTY PROCEEDINGS U/S 27 IB FOR NON-FILING OF AUDIT REPORT FOR A.Y. 2010-11. THEREFORE, A.O. ERRO NEOUSLY APPLIED THE PROVISION OF THE SECTION 44AD OF THE ACT. 4. THAT THE A.O. REJECTED THE BOOKS OF ACCOUNT DUE TO THE REASON NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUN TS IGNORING THE FACT THAT THE APPELLANT FILED AUDITED FINANCIAL STATEMENT INC LUDING BALANCE SHEET AND P & L A/C DURING ASSESSMENT PROCEEDINGS. WHEREAS TH E A.O. TOOK GROSS RECEIPTS VALUE AS SHOWN BY THE APPELLANT IN ITS P & L A/C EVEN AFTER REJECTING THE SAME. 5. THAT THE A.O. DISALLOWED THE LOSS OF RS. 27,49,3 47/- CLAIMED BY THE APPELLANT IN THE INCOME TAX RETURN FOR THE A.Y. 201 0-11 WITHOUT ANY ADVERSE MATERIAL AVAILABLE AGAINST THE APPELLANT ON RECORD AND UNLAWFULLY APPLIED THE PROVISIONS OF SECTION 44 AD OF THE INCOME TAX ACT, 1961 3. THE ASSESSEE COMPANY HAD BEEN ASSESSED UNDER SE CTION 147 READ WITH SECTION L43(3) OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 2010-11. THE ASSESSEE COMPANY HAD NOT FILED ITS INCOME TAX RETURN UNDER S ECTION 139(1) OF THE ACT FOR E A.Y. 2010-11. THE ASSESSEE COMPANY DEPOSITED CASH OF RS. 8,31,500/- WITH STANDARD CHARTERED BANK AND TOTAL RECEIPTS FOR THE YEAR UNDER CONSIDERATION WAS RS. 3,54,30,497/-. THE ASSESSEE C OMPANY WAS IN THE BUSINESS OF SALE AND SERVICE OF CCTV CAMERAS AND OT HER SECURITY EQUIPMENTS. THE ASSESSING OFFICER ISSUED NOTICE U/S 148 ON 30.0 3.2017 FOR OPENING ASSESSMENT PROCEEDINGS OF A.Y. 2010-11. THE ASSESSE E COMPANY FILED ITS INCOME TAX RETURN ON 16.10.2017 DECLARING LOSS OF R S. 27,49,347/- VIDE ACKNOWLEDGEMENT NO. 245796791161017 IN COMPLIANCE T O THE NOTICE U/S 148 DATED 30.03.2017. DIRECTOR OF THE COMPANY ATTENDED THE HEARING AND FILED AUDITED FINANCIAL STATEMENT INCLUDING BALANCE SHEET AND P & L A/C FOR THE A.Y. 2010-11. THE ASSESSING OFFICER COMPLETED THE ASSESS MENT PROCEEDING AND 3 ITA NO. 4816/DEL/2019 ASSESSED THE TOTAL INCOME OF RS. 28,34,440/- I.E. 8 % OF TOTAL RECEIPTS OF RS. 3,54,30,497/- BY TAKING THE GUIDANCE FROM SECTION 4 4AD OF THE ACT AND DISALLOWED THE CLAIM OF LOSS OF RS. 27,49,347/- VID E ORDER DATED 28.12.2017. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF TH E ASSESSEE. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE AND THER E IS NO ADJOURNMENT APPLICATION ON BEHALF OF THE ASSESSEE. THE NOTICE HAS BEEN SERVED TO THE ASSESSEE. THEREFORE, WE ARE TAKING UP THE SUBMISSI ONS OF THE ASSESSEE BEFORE THE CIT(A) AS WELL AS BEFORE THE ASSESSING OFFICER . 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. THE CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSING OFFICER RIGHTY INVOKED THE PROVISIONS OF SECTION 44AD AND APPLIED RATE OF 8% ON THE CONTRACT RECEIPTS OF THE ASSESSEE DURING THE YEAR UNDER CONS IDERATION. THE CIT(A) FURTHER OBSERVED THAT THE REQUEST OF THE ASSESSEE T O RESTRICT THE RATE TO 3% WAS NEVER SUBSTANTIATED BY THE BOOKS OF ACCOUNTS NOR WA S A PART OF THE PROVISIONS OF THE INCOME TAX ACT. THUS, THERE IS NO NEED TO I NTERFERE WITH THE FINDINGS OF THE CIT(A). THEREFORE, THE APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2020. SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20/03/2020 R. NAHEED 4 ITA NO. 4816/DEL/2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 06.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 09.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 19.03.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 19.03.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.03.2020 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER