ITO vI, Lucknow V. M/s Civil Design Engineer, Lucknow

ITA 527/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78478 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-02-2014
• Assessment Year: misc
• Appeal Filed On: 08-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A P SINHA

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.527/LKW/2011 ASSESSMENT YEAR:2002 - 03 INCOME TAX OFFICER - VI(1), RANGE - VI, LUCKNOW. VS. M/S CIVIL DESIGN ENGINEERS, C - 70, SEC.G, LDA COLONY, KANPUR ROAD, LUCKNOW. PAN:AACEL8599E (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AJAY KUMAR, D.R. RESPONDENT BY SHRI A. P. SINHA, ADVOCATE DATE OF HEARING 25/02/2014 DATE OF PRONOUNCEMENT 1 1 /04/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, LUCKNOW DATED 29/06/2011 FOR THE ASSESSMENT YEAR 2002 - 2003. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITIONS RIGHTLY MADE BY THE A.O. AFTER REJECTING THE BOOKS OF THE ASSESSEE U/S 145(3) OF THE INCOME TAX ACT, 1961 AND THEREAFTER ESTIMATING THE INCOME @ 8% OF THE GROSS RECEIPTS. 2. THE CI T(A) FAILED TO APPRECIATE THE FACTS THAT THE A.O. HAD LEFT WITH NO OPTION BUT TO REJECT THE BOOK RESULTS AS EVEN AFTER REPEATED REQUESTS BY THE A.O., THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNTS. 3. THE CIT(A) HAS ERRED IN LAW IN NOT FOLLOWING THE DECISION OF THE HON'BLE ITAT (ALLD.) IN THE CASE OF RAJESH KUMAR 2 SINGH VS. ITO 1(3) GORAKHPUR MTC 289 WERE THE ITAT APPLIED A NET PROFIT OF 7.5% OF TURNOVER. 4. THE CIT(A) HAS ERRED IN LAW AND IN FACTS IN NOT FOLLOWING CASES WERE REJECTION OF BOOKS OF AC COUNTS HAVE BEEN UPHELD. ( 1 ) DCIT CIRCLE BULANDSHAHRA VS. ALLIED CONSTRUCTION 105 ITD (1) (SB) ITAT, DELHI. ( 2 ) NAMASIVAYAM CHETTIAR (SN) VS. COMMISSIONER OF INCOME TAX, 38 ITR 579 (SC) ( 3 ) AWADHESH PRATAP SINGH, ABDUL RAHMAN & BROTHERS VS. COMMISSIONER OF INCOME TAX , 2010 ITR 406 (ALLD.) 5. APPELLANT CRAVE LEAVES TO ADD OR AMEND ANY ONE OR MORE OF THE GROUNDS OF APPEALS, AS STATED ABOVE, AS AND WHEN NEED TO DOING SO ARISES WITH THE PRIOR PERMISSION OF THE COURT. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT ( A). HE ALSO SUBMITTED THAT CIT(A) HAS FOLLOWED THE TRIBUNAL DECISION RENDERED IN THE CASE OF RUHAILKHAND BUILDERS (P) LTD. IN I.T.A. NO.77/LUC/05 DATED 08/05/2006. HE FURTHER SUBMITTED THAT THE COPY OF THIS TRIBUNAL DECISION IS AVAILABLE ON PAGE NO. 3 TO 6 OF THE PAPER BOOK. AT THIS JUNCTURE , IT WAS POINTED OUT BY THE BENCH THAT IN THIS CASE , THE TRIBUNAL HAS UPHELD THE NET PROFIT RATE OF 4% AFTER ALLOWING THE DEDUCTION INCLUDING INTEREST ON BORROWING, IF ANY, AND REMUNERATION TO DIRECTORS ETC. THEN WHY THE SAME RATE OF 4% SHOULD NOT BE APPLIED IN THE PRESENT CASE ALSO AFTER ALLOWING DEDUCTION IN RESPECT OF INTEREST TO PARTNE RS AND SALARY TO PARTNERS. IN REPLY, LEARNED A.R. AGREED TO THIS PROPOSITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN VIEW OF THE FACTS DISCUSSED ABOVE, WE HOLD THAT IN THE PRESENT CASE ALSO, THE INCOME OF THE ASSESSEE SHOULD BE ASSESSED AT 4% OF THE GROSS RECEIPTS AND THE SAME SHOULD BE CONSIDERED AS INCOME OF THE ASSESSEE AFTER ALLOWING DEDUCTION ALLOWABLE TO 3 THE ASSESSEE IN RESPECT OF THE INTEREST AND REMUNERATION TO THE PARTNERS AND NO FURTHER DEDUCTION SHOULD BE ALLOWED TO THE ASSESSEE AGA INST THIS INCOME ESTIMATED AT 4% OF THE GROSS RECEIPTS. THIS ISSUE IS DECIDED IN THIS MANNER AND THE REVENUE GETS PART RELIEF. 5. IN THE RESULT, THE APPEAL STANDS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPT ION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 1 /04/2014. *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