P Esubabu & Co, Bhimavaram V. ITO, Bhimavaram

ITA 50/VIZ/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0583 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Assessee Lawyers: K NEERAJA
• Keywords: Rejection of books of accounts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.50/VIZAG/2009 ASSESSMENT YEAR : 2005-06 P. ESUBABU & CO. BHIMAVARAM ITO WARD-1 BHIMAVARAM (APPELLANT) VS. (RESPONDENT) PAN NO.AABFE 5820F APPELLANT BY: SHRI K. NEERAJA, ADVOCATE RESPONDENT BY: SHRI J. SIRI KUMAR, DR ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUNDS:- 1. THE FIRST APPELLATE AUTHORITY WAS NOT JUSTIFIED IN REJECTING THE RESULTS OF BOOKS OF ACCOUNT AND DETERMINING THE INCOME BY A PPLYING AD HOC RATE OF PROFIT @ 10%. 2. THE FIRST APPELLATE AUTHORITY WAS NOT JUSTIFIED IN REJECTING THE WAIVER OF INTEREST LEVIED U/S 234B, AS IN THIS CASE TOTAL INCOME WAS SUBJECTED TO DEDUCTION OF TAX AT SOURCE AND THERE W AS NO LIABILITY TO PAY ADVANCE TAX. 3. ANY OTHER GROUNDS THAT MAY BE URGED AT TIME OF HEAR ING. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS OPTED NOT TO PRESS GROUND NO.2. ACCORDINGLY, THE S AME IS DISMISSED BEING NOT PRESSED. WITH REGARD TO THE GROUND NO.1, IT IS CON TENDED THAT ASSESSEE IS A CIVIL CONTRACTOR AND HAS FILED A RETURN DECLARING I NCOME THEREIN AT RS.97,274/- RETURN WAS INITIALLY PROCESSED U/S 143(1). LATER O N, IT WAS SELECTED FOR SCRUTINY AND ON VERIFICATION, THE ASSESSING OFFICER HAS NOTICED VARIOUS DEFECTS IN THE BOOKS OF ACCOUNTS OF THE ASSESSEES. THE A.O . ACCORDINGLY REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND HAS ESTIMATED THE PROFITS @ 12.5% OF THE GROSS RECEIPT. THE A.O. HOWEVER ALLOWED THE IN TEREST AND PARTNERS REMUNERATIONS. ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND CIT(A) PARTLY ACCEPTED THE CLAIM OF THE ASSESSEES AND HAS RE-ESTIMATED THE PROFIT AT 10% OF THE GROSS CONTRACT RECEIPT. 2 3. STILL THE ASSESSEE IS NOT SATISFIED AND HE HAS P REFERRED AN APPEAL BEFORE US WITH THE SUBMISSIONS THAT ASSESSEE WAS A PETTY CONTRACTOR AND HE DID NOT EARN MUCH PROFIT OUT OF HIS CONSTRUCTION AC TIVITIES. HE HOWEVER DID NOT DISPUTE THE REJECTION OF THE BOOKS OF ACCOUNTS BUT PRAYED FOR THE ADMISSION OF THE INCOME DECLARED BY THE ASSESSEES. 4. THE LD. D.R. ON THE OTHER HAND HAS PLACED A HEAV Y RELIANCE UPON THE ORDER OF THE CIT(A) WITH THE SUBMISSIONS THAT CIT(A ) HAS ALREADY GRANTED A SUBSTANTIAL RELIEF TO THE ASSESSEES, AS SUCH, NO FU RTHER RELIEF CAN BE GRANTED TO THE ASSESSEES. 5. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE RECORD, WE FIND THAT THE BOOKS OF ACCOUNTS WERE NOT MAINTAINED PROPERLY AND THE A.O. HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEES. MOREOVER, THE REJECTION OF BOOKS OF ACCOUNTS ARE NO T DISPUTED BY THE ASSESSEE BEFORE US. LD. COUNSEL FOR THE ASSESSEE S IMPLY ARGUED FOR THE RE- ESTIMATION OF THE PROFIT. DURING THE COURSE OF HEA RING, SHE HOWEVER, ASKED THAT THE PROFIT MAY BE ESTIMATED @ 8% AND IN SUPPOR T OF THAT SHE HAS PLACED SOME COMPARABLE CASE. WE HAVE CAREFULLY EXAMINED T HE ORDER OF THE LOWER AUTHORITIES AND WE ARE OF THE VIEW THAT AFTER REJEC TING THE BOOKS OF ACCOUNTS, THE OPTION WITH THE ASSESSING OFFICER IS ONLY TO ES TIMATE THE INCOME IN THE LIGHT OF COMPARABLE CASE. BUT NO COMPARABLE CASE W AS BROUGHT BY THE ASSESSING OFFICER OR THE CIT(A). HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES, WE ARE OF THE VIEW THAT ASSESSEE IS ENTITLED FOR SOME MORE RELIEF AND WE ACCORDINGLY ESTIMATE THE PROFIT AT 8% OF THE GROSS RECEIPTS TO MEET THE ENDS OF JUSTICE. WE ACCORDINGLY MODIFY TH E ORDER OF THE CIT(A) AND DIRECT THE A.O. TO ESTIMATE THE PROFIT AT 8% OF THE GROSS RECEIPT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 27.7.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 27 TH JULY, 2010 3 COPY TO 1 M/S. P. ESUBABU & CO., CONTRACTORS, DOOR NO.27-3- 99, RAYALAM ROAD, BHIMAVARAM-534 202, WEST GODAVARI DISTRICT. 2 ITO WARD-2, BHIMAVARAM 3 THE CIT, RAJAHMUNDRY 4 THE CIT(A), RAJAHMUNDRY 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM