ITO, Rohtak V. Sh. Ajay Kumar, Rohtak

ITA 5288/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58541 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 28-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Assessee Lawyers: N O N E
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI. BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL I.T.A. NO.5288(DEL)/2011 ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, SHRI AJAY KUMAR, WARD-2, ROHTAK. VS. PROP. M/S AJAY CONSTRUCTION, H. NO. 49/35, JANTA COLONY, ROHTAK. (APPLICANT) (RESPONDENT) APPELLANT BY : MRS. ANUSHA KHURANA, SR. D.R . RESPONDENT BY: N ONE DATE OF HEARING: 30.01.2012 DATE OF PRONOUNCEM ENT: 30.01.2012. ORDER PER K.G. BANSAL : A.M THE REVENUE HAS TAKEN TWO GROUNDS IN THIS APPEAL T O THE EFFECT THAT THE LD. CIT(APPEALS) ERRED IN ASSESSING THE PRO FIT OF THE ASSESSEE TO 8% OF THE RECEIPTS FROM PACL INDIA LTD., WHEREAS NO EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE AND, THEREFORE, THE WHO LE OF THE RECEIPT IS LIABLE TO BE TAXED. IT IS ALSO MENTIONED THAT THE EXPEN DITURE HAS BEEN DISALLOWED IN THE CASE OF PACL INDIA LTD. AND THE ASSESSMEN T IN THIS CASE IS MADE ON PROTECTIVE BASIS. 2. THE FACTS WHICH EMERGE FROM THE ASSESSMENT ORDER ARE THAT THE RETURN WAS FILED ON 24.07.2006 DECLARING INCOME OF RS. 2,36,160/-. THE ITA NO. 5288(DEL)/2011 2 RETURNED INCOME RESULTED INTO REFUND OF RS. 44,08 8/- AS TAX WAS DEDUCTED BY PACL INDIA LTD. ON PAYMENTS OF RS. 29,52,000/-. THE ASSESSEE HAD IN FACT NOT CARRIED OUT ANY CONTRACT ACTIVITIES AND IT WAS A CASE OF SUPPRESSION OF INCOME IN THE CASE OF PACL INDIA L TD. THEREFORE, THE AO TAXED THE GROSS RECEIPTS ON PROTECTIVE BASIS. 3. THE LD. CIT(APPEALS) REFERRED TO A LARGE NUMB ER OF SUCH CASES WHICH CAME BEFORE HIS PREDECESSOR. THESE ASSESS EES SHOWED THEMSELVES AS SUB-CONTRACTORS OF PACL INDIA LTD. IN SIMILAR APPEALS, HIS PREDECESSOR HAS TAXED THE PROFIT @ 8% OF THE RECEIPTS. APPE ALS WERE FILED AGAINST THESE ORDERS, WHICH HAVE BEEN DECIDED IN 12 CASE S. IN THESE ORDERS, THE VIEW OF THE LD. CIT(APPEALS) HAS BEEN UPHELD. 4. THE CASE WAS FIXED FOR HEARING ON 30.01.20 12. NONE ATTENDED ON BEHALF OF THE ASSESSEE. HOWEVER, THE LD. SENIO R DR EXPLAINED THE FACTS OF THE CASE. 5. IT IS EXPLAINED TO US THAT TRIBUNAL HAS PASSED ORDERS IN SIMILAR CASES IN WHICH INCOME HAS BEEN ASSESSED @ 8% OF THE R ECEIPTS. THE AO HAS ALSO BEEN DIRECTED TO GRANT CREDIT FOR TAX DEDU CTED AT SOURCE. HOWEVER, IN ITA NO. 5288(DEL)/2011 3 VIEW OF THE FAILURE OF THE ASSESSEE TO SHOW THA T ANY WORK WAS DONE UNDER THE SUB-CONTRACT, IT HAS BEEN MENTIONED IN ALL TH E CASES THAT THE ASSESSMENT OF SUCH ASSESSEES WILL CAUSE NO PR EJUDICE TO THE REVENUE IN THE CASE OF PACL INDIA LTD., WHICH WILL BE DEC IDED ON ITS OWN FACTS WITHOUT CONSIDERING ASSESSMENTS OF ALLEGED SUB-C ONTRACTORS. 6. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THAT ANY EXPENDITURE WAS INCURRED BY IT QUA SUB-CONTRACTOR. NONETHEL ESS, EVEN IF HE IS PROVIDED THE ENTRY ONLY, THE INCOME CANNOT EXCE ED 8% OF THE RECEIPTS. THEREFORE, IT IS HELD THAT THE LD. CIT(APPEALS) WAS RIGHT TO BRING TO TAX INCOME @ 8% OF THE ALLEGED CONTRACT RECEIPTS. IT IS MADE ABUNDANTLY CLEAR THAT THIS ORDER WILL NOT AFFECT THE CASE OF THE REVENUE IN ANY MANNER IN THE CASE OF PACL INDIA LTD. 7. IN THE RESULT, THE APPEAL IS DISMISSED AS ABOV E. SD/- SD/- (I.P. BANSAL) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA ITA NO. 5288(DEL)/2011 4 COPY OF THE ORDER FORWARDED TO:- SHRI AJAY KUMAR, ROHTAK. ITO, WARD-2, ROHTAK. CIT(A) CIT, THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR.