Asstt. Commissioner of Income Tax, GONDA V. M/s. Hera and Iqra Construction and Suppliers, Bahraich

ITA 493/LKW/2013

• Counselvise Citation: 49323714 RSA 2013
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-12-2013
• Assessment Year: 2010-2011
• Appeal Filed On: 02-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: ASHISH RAJ SHUKLA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.493/LKW/2013 A.Y.:2010 - 2011 A.C.I.T., CIRCLE - GONDA. VS. M/S HERA AND IQRA CONSTRUCTION AND SUPPLIERS, MIHIPURWA, BAHRAICH. PAN:AAFFH1237H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. P. SRIVASTAVA, D.R. RESPONDENT BY SHRI ASHISH RAJ SHUKLA, ADVOCATE DATE OF HEARING 18/12/2013 DATE OF PRONOUNCEMENT 2 8 /01/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - LI, LUCKNOW DATED 05/04/2013 FOR ASSESSMENT YEAR 2010 - 2011. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. T HAT THE LD. C I T(A) - I I , LUCKNOW HAS ERRED ON F ACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY RESTRICTING THE ESTIMATION AT 5.25% INSTEAD OF 8% OF THE GROSS RECEIPT. 2. T HAT THE LD. CIT(A) - I I LUCKNOW HAS ERRED ON THE F ACT S AND CIRCUMSTANCES OF THE CASE AND IN LAW BY TAKING IN TO CONSIDERATION THE FINAL BOOKS RESULTS OF THE ASSESSEE WHILE DECIDING THE ESTIMATION OF NET PROFIT RATE AS THE ASSESSING OFFICER HAS ESTABLISHED IN ASSESSMENT ORDER THAT THE ASSESSEE'S BUSINESS RESULT DETAILS/PARTICULARS ARE COMPLETELY ERRONEOUS. 2 3. T HA T THE LD. C I T(A) - I I, LUCKNOW HAS ERRED ON F ACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY TREATING THE DETAILS FOR A.Y. 2010 - 11 AS PAST HISTORY FOR DECIDING THE ESTIMATION OF NET PROFIT RATE FOR A.Y. 2010 - 11. 4. T HAT THE ORDER DATED 05.04.2013 PASSED BY THE LD. C I T(A ) - II , LUCKNOW IN APPEAL NO.3 1 / 134/ACIT /GONDA/ 1 2 - 13 RELATING TO ASSESSMENT YEAR 2010 - 11 BEING ERRONEOUS IN LAW AND ON FACTS DESERVES TO BE CANCELLED AND ORDER OF THE AO DESERVES TO BE RESTORED. 5. T HAT THE APPELLANT ALSO CRAVES TO MODIFY, A MEND, CHANGE AND REVISE THE ABOVE GROUNDS OF APPEAL AND ADD FURTHER GROUNDS OF APPEAL, IF NECESSARY. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE DRAWN OUR ATTENTION TO PAGE NO. 1 OF THE ASSESSMENT ORDER AND POINTED OUT THAT IT IS NOTED BY THE ASSESSING OFFICER IN THIS PAGE THAT THE ASSESSEE FIRM HAS DISCLOSED GROSS RECEIPT OF BUSINESS AT RS.8,12,26,477/ - IN THE FINANCIAL YEAR 2009 - 2010. HE FURTHER SUBMITTED THAT IT IS ALSO NOTED BY THE ASSESSING OFFICER IN THE SAME PAGE OF THE OR DER THAT THIS GROSS RECEIPT IS FROM CIVIL CONTRACT BUSINESS. HE FURTHER SUBMITTED THAT THE REJECTION OF THE BOOKS BY THE ASSESSING OFFICER HAS BEEN UPHELD BY LEARNED CIT(A) VIDE PARA 4(8) OF HIS ORDER BUT HAVING DONE SO, HE HAS DIRECTED THE ASSESSING OFFI CER TO ASSESS THE INCOME OF THE ASSESSEE @5.25% OF THE GROSS RECEIPT, WHICH SHOULD BE 8% IN THE FACTS OF THE PRESENT CASE. 4. LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT ( A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE BOOKS OF ACCOUNT HAVE BEEN REJECTED BY THE ASSESSING OFFICER 3 AND REJECTION OF BOOKS HAS BEEN UPHELD B Y LEARNED CIT ( A) ALSO AND, THEREFORE, THERE IS NO DISPUTE ON THIS ASPECT. NOW THE ONLY DISPUTE IS REGARDING THE RATE ON WHICH THE INCOME SHOULD BE ASSESSED IN THE PRESENT CASE. WE ALSO FIND THAT IT IS NOTED BY LEARNED CIT(A) IN PARA 4(9) OF HIS ORDER TH AT IN ASSESSMENT YEAR 2009 - 2010, THE ASSESSING OFFICER MADE AN ADDITION OF RS.4.30 LAC ON ACCOUNT OF ROUTINE DISALLOWANCE OF EXPENSES. HE HAS FURTHER N OTED THAT THE ADDITION SO MADE RESULTED IN ESTIMATION OF INCOME @5.24% OF THE TURNOVER AND ON THIS BASIS , HE HELD THAT IT IS REASONABLE TO CONFIRM ESTIMATION OF INCOME OF THE ASSESSEE @5.25%. WE DO NOT FIND ANY FORCE IN THE FINDING OF LEARNED CIT ( A) BECAUSE IN THE PRESENT YEAR , THE BOOKS OF ACCOUNT WERE REJECTED BY THE ASSESSING OFFICER AND SUCH REJECTION WAS UPHELD BY LEARNED CIT ( A) WHEREAS THIS IS NOT THE CASE OF THE ASSESSEE THAT BOOKS OF ACCOUNT WERE REJECTED IN ASSESSMENT YEAR 2009 - 2010 ALSO. IN THE PRESENT YEAR, THE BOOKS OF ACCOUNT WERE REJECTED BY THE ASSESSING OFFICER FOR THE REASON THAT THE ASSE SSEE FIRM FAILED TO PRODUCE BOOKS OF ACCOUNT AND VOUCHERS . WHEN THE BOOKS OF ACCOUNT AND VOUCHERS ARE NOT PRODUCED BEFORE THE ASSESSING OFFICER, IT IS NOT POSSIBLE TO EXAMINE THE GENUINENESS AND COMPLETENESS OF THE BOOKS OF ACCOUNT AND IN THE ABSENCE OF V OUCHERS, THE CORRECTNESS OF EXPENSES DEBITED IN PROFIT & LOSS ACCOUNT ARE ALSO NOT VERIFIABLE. HENCE, IN SUCH CIRCUMSTANCES, TAKING THE SAME RATE AS ASSESSED IN THE PRECEDING YEAR WHERE BOOKS OF ACCOUNT WERE NOT REJECTED IS NOT JUSTIFIED. IN THE CASES OF CIVIL CONTRACTOR, RATE OF 8% IS PROVIDED IN THE ACT BUT THE SAME IS FOR LOWER TURNOVER UP TO RS.40 LAC S AND, THEREFORE, IN OUR CONSIDERED OPINION, 8% ESTIMATION OF PROFIT IS NOT JUSTIFIED IN THE FACTS OF THE PRESENT CASE AS HAS BEEN DONE BY THE ASSESSING OFFICER. IN OUR CONSIDERED OPINION, IN THE FACTS OF THE PRESENT CASE, 7% NET PROFIT WILL MEET THE ENDS OF JUSTICE. WE HOLD ACCORDINGLY. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE INCOME OF THE 4 ASSESSEE BY APPLYING NET PROFIT OF 7% INSTEAD OF 5.25% AS HAS BEEN DIRECTED BY LEARNED CIT ( A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS PARTLY A LLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 8 T H JANUARY, 2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR