The ACIT, 3(1), Bhopal V. Shri Pramod Kumar Gupta, Bhopal

ITA 499/IND/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66771 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Business income; Depreciation
• Section: 44AD; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 499/IND/2012 A.Y.2009-10 ACIT-3(1), BHOPAL :: APPELLANT VS PRAMOD KUMAR GUPTA, BHOPAL PAN ACDPG 3156 A :: RESPONDENT APPELLANT BY SHRI R.A. VERMA, SR. DR RESPONDENT BY NONE DATE OF HEARING 20 .12.12 DATE OF PRONOUNCEMENT 20 .12.12 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 8.6.2012, PASSED BY LD. FIRST APPELLATE AUTHORITY, BHO PAL, ON THE FOLLOWING GROUND OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN REDUCING THE ADDITION OF 2 RS.70,30,138/- TO RS.13,53,511/- BY APPLYING 8% NET PROFIT, WHEREAS THE ASSESSING OFFICER HAS MADE SPEC IFIC DISALLOWANCE. 2. DURING HEARING OF THIS APPEAL, NOBODY WAS PRESENT FO R THE ASSESSEE INSPITE THE FACT THAT REGD. AD NOTICE WAS SENT TO THE ASSESSEE ON THE ADDRESS AVAILABLE ON RECORD INCLUDING THE IMPUGNED ORDER/ASSESSMENT ORDER. THE ASSESSEE NEITHER PRESENTED HIMSELF NOR MOVED ANY ADJOURNMENT PETITION, THEREFORE, WE HAVE NO OPTION BU T TO PROCEED EXPARTE QUA ASSESSEE AND TEND TO DISPOSE OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE L D. SR. DR SHRI R.A. VERMA STRONGLY DEFENDED THE ASSESSM ENT ORDER BY SUBMITTING THAT THE LD. CIT(A) WRONGLY PROV IDED RELIEF TO THE ASSESSEE BY APPLYING THE NET PROFIT RATE AT 8% OF THE TOTAL TURNOVER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL WORKING AS CIVIL CONTRACTO R. 3 THE ASSESSEE DECLARED TOTAL RECEIPT OF RS.4,03,47,460/ -, SHOWING GROSS PROFIT OF RS.46,87,250 (11.37%) AND NE T PROFIT OF RS.18,74,286 (4.65%). THE ASSESSEE ALSO SHO WED INTEREST ON FDR AND SAVING ACCOUNT OF RS.1,65,114/-. THE LD. ASSESSING OFFICER SERVED NOTICES U/S 143(2) OF THE ACT ON VARIOUS DATES ALONG WITH QUESTIONNAIRE AND ALSO MADE TELEPHONIC CALLS TO THE ASSESSEE FOR APPEARANCE. THE ASSESSEE DID NOT RESPOND TO THE NOTICES. SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE, TO WHICH, THE COUNSEL FOR THE ASSESSEE ATTENDED BUT DID NOT MAKE ANY SUBMISSION AND MERELY REQUESTED FOR ADJOURNMENT. EVEN IN RESPONSE TO FINAL OPPORTUNITY, THE ASSESSEE DID NOT APPEAR. PROCEED INGS U/S 144 OF THE ACT WERE INITIATED AND LAST OPPORTUNIT Y WAS PROVIDED TO THE ASSESSEE. ULTIMATELY, ON 12.12.2011, THE COUNSEL FOR THE ASSESSEE APPEARED BUT PARTLY COMPLIED W ITH THE DIRECTIONS OF THE ASSESSING OFFICER AND ONLY SUB MITTED 18 PURCHASE BILLS OUT OF 150. AS PER THE ASSESSMENT ORDER, 4 THE ASSESSEE DID NOT PRODUCE SALARY AND WAGES BILLS/VOUCHERS AND ONLY THE WAGES DETAILS FROM THE MON TH OF AUGUST AND OCTOBER WERE FILED. AS PER THE ASSESSME NT ORDER, THE ASSESSEE ADMITTED THAT THE EXPENSES WERE INCURRED IN CASH BUT NEITHER PRODUCED CASH BOOK NOR THE BILLS RELATED TO THE EXPENSES. IN THE ABSENCE OF NECE SSARY DETAILS, 20% OF THE PURCHASES WERE TREATED AS UNVERIFI ABLE AND THUS, RS.42,52,405/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 50% OF THE SALARIES AND WAGES WERE TREATED AS NON-VERIFIABLE AS THE ASSESSEE DID NOT PRODUCE NECESSAR Y REPORT, THEREFORE, THE AMOUNT OF RS.2,47,800/- WAS ALS O ADDED TO THE TOTAL INCOME OF THE ASSESSEE ALONG WITH OT HER ADDITIONS AS DETAILED IN THE ASSESSMENT ORDER. 3.1 THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A ) WHO CONCLUDED THAT IF THE RATIO OF THE PURCHASES FOR THE A YS 2007-08 TO 2009-10 ALONG WITH CONTRACT RECEIPT IS ANALYSED, THE APPLICATION OF 8% OF THE NET PROFIT AFTER 5 DEPRECIATION OF THE TOTAL TURNOVER WAS HELD TO BE JUST IFIED WHICH WORKED OUT TO RS.32,27,797/-. SINCE THE ASSESS EE DECLARED NET PROFIT AT RS.18,74,286/-, THE ADDITION ON ACCOUNT OF BUSINESS INCOME WAS REDUCED TO RS.13,53,51 1/- WHICH IS UNDER CHALLENGE BEFORE THIS TRIBUNAL. ON PE RUSAL OF RECORD AND AFTER HEARING THE ASSERTION OF THE LD. S R. DR, WE FIND THAT THE TOTAL RECEIPTS ARE TO THE TUNE OF RS.4,03,47,460/- SHOWING THE GROSS PROFIT OF RS.46,87,250/- AND NET PROFIT COMES TO RS.18,74,286/ -, RESULTING INTO GROSS PROFIT OF RS.11.37% AND NET PRO FIT AT RS.4.65%. IN THE CASES OF CONTRACTORS, NORMALLY, A CONSISTENT VIEW, UNDER THE CIRCUMSTANCES, HAS BEEN TAK EN AFFIRMING THE NET PROFIT RATE AT 8%. EVEN AS PER THE PROVISIONS OF 44AD OF THE ACT, THE APPLICATION OF NET PROFIT RATE AT 8% SEEMS TO BE QUITE JUSTIFIED, THEREFORE, ON THIS ISSUE, WE FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A) INCLUDING DENIAL OF FURTHER DEDUCTION ON ACCOUNT OF 6 DEPRECIATION. OUR VIEW IS SUPPORTED BY THE RATIO LAID DOWN IN SURINDER PAL NAYYAR VS. CIT (2009) 177 TAXMAN 207 (P&H) AND CIT VS. SURINDER PAL ANAND (2010) 192 TAXMAN 264 (P&H). FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. SR. DR AT THE CONCLUSION OF THE HEARI NG ON 20.12.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 20.12.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYS!