RAJ KUMAR GUPTA, Jaipur V. ADDL. CIT, Jaipur

ITA 536/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5109 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 01-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: VIKAS RAJVANS HI
• Keywords: Rejection of books of accounts; Depreciation; Principle of natural justice

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH ,-MH-TSU] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[ KK LNL; DS LE{K BEFORE: SHRI A.D.JAIN, JM & SHRI VIKRAM SINGH YADAV , AM VK;DJ VIHY LA-@ ITA NO.536/JP/15, 537/JP/15, FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 & 2011-12 SHRI RAJ KUMAR GUPTA, F-100 PANCHSHEEL MARG, C-SCHEME, JAIPUR CUKE VS. THE ADDL. CIT, RANGE-6, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AHPPG 4958 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.561/JP/15, 562/JP/15, FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 & 2011-12 THE ADDL. CIT, RANGE-6, JAIPUR CUKE VS. SHRI RAJ KUMAR GUPTA, F-100 PANCHSHEEL MARG, C-SCHEME, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AHPPG 4958 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIKAS RAJVANSHI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.09.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 14/09/2016. VKNS'K@ ORDER PER BENCH THESE ARE TWO APPEALS FILED BY THE ASSESSEE FOR A.Y . 2010-11 &2011-12 AGAINST THE ORDER OF LD. CIT(A)-II, JAIPUR DATED 09.03.201 5 AND CROSS APPEALS BY THE REVENUE FOR BOTH THE YEARS. ALL THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDER. ITA NOS. 536, 537, 561 & 562/JP/15 SHRI RAJ KUMAR GUPTA, JAIPUR VS. DCIT, CIRCLE-6, JA IPUR 2 GROUNDS OF APPEAL OF ASSESSEE (ITA NO. 536/JP/15): (1) THE LD. AO HAS ERRED IN LAW AS WELL AS IN FACT IN WRONGLY REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) OF THE IT ACT, 1961 WI THOUT ANY RIGHT BASIS AND ARBITRARY APPLIED 11.5%NP RATE JUST ON THE BAS IS OF SURMISES AND CONJECTURES WITHOUT CONSIDERING PAST HISTORY OF THE ASSESSEE. (2) THE LD. AO HAS ERRED IN LAW AS WELL AS IN FACT IN NOT FOLLOWING THE BASIC PRINCIPLES OF NATURAL JUSTICE AND NOT GIVING ANY OP PORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE APPLYING 11.5% NP RATE . HENCE ORDER MADE IS NULL AND VOID AB-INITIO. (3) THE LD. AO HAS ERRED IN LAW AS WELL AS IN FACT IN TAKING NP @ 11.50% ON THE BASIS OF CASE DECIDED BY HONBLE ITAT JAIPUR B ENCH WITHOUT GOING THROUGH THE FACTS OF THE CASE THAT HONBLE ITAT HA D APPLIED NP RATE AS PER THE PAST HISTORY OF THE CASE AGAINST NP RATE @ 9.96% SHOWN BY THE ASSESSEE. THE PAST HISTORY ASSESSEES INCOME IS NOT CONSIDERED BEFORE APPLYING THE NP RATE @ 11.50%. LD. AO IN THAT CASE HAD ONLY DISALLOWED VARIOUS EXPENSES U/S 40(A)(IA) ON THE BASIS OF NON DEDUCTION OF TDS WHEREAS IN THE PRESENT CASE THE ASSESSEE HAS DULY D EDUCTED AND DEPOSITED THE TDS. GROUNDS OF APPEAL OF REVENUE (ITA NO. 561/JP/15): WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING TO APPLY NP RATE OF 8% O F GROSS CONTRACT RECEIPTS INSTEAD OF 11.5% AS APPLIED BY THE AO BY IGNORING T HE FACT THAT THE JURISDICTIONAL HONBLE ITAT IN THE CASE OF SANTOSH KUMAR RAWAT VS. ITO IN APPEAL NO. 631/JP/2006 HAS UPHELD THE NET PROFIT RA T OF 10%. 2. THE LD. AR SUBMITTED THAT FOR THE YEAR UNDER CON SIDERATION, THE ASSESSEE HAS SHOWN BETTER NP OF 3.23% IN COMPARISON TO 2.48% OF PREVIOUS YEAR SO EVEN AFTER REJECTION OF BOOKS OF ACCOUNTS, NO ADDITION C AN BE MADE IN VIEW OF JUDGEMENT OF RAJASTHAN HIGH COURT IN THE CASE OF CI T VS. GOTAN LIME KHANIZ UDHYOG 256 ITR 243. THE LD. AR FURTHER SUBMITTED THAT THE HONBLE ITAT HAS ALREADY DECIDED THAT AVERAGE GP RATE MUST BE APPLIED IN PLACE OF HIGHEST GP RATE IN CASE OF SHRI MUKESH KUMAR JAIN VS. ITO TONK (ITA NO.1023/JP/2011 ) AND SHRI PADAM CHAND JAIN VS. ITO TONK (ITA NO.1024/JP/2011). IN CASE O F ASSESSEE, AVERAGE 5 YEARS NP RATE IS 3% WHEREAS THE RELEVANT YEARS NP RATE I S 3.23% WHICH IS ALREADY ITA NOS. 536, 537, 561 & 562/JP/15 SHRI RAJ KUMAR GUPTA, JAIPUR VS. DCIT, CIRCLE-6, JA IPUR 3 HIGHER THAN AVERAGE RATE, SO DECLARED NP RATE SH OULD BE APPLIED IN PLACE OF ESTIMATED NP RATE. THE LD. AR FURTHER SUBMITTED THAT LD. CIT(A) HIMSEL F DISTINGUISHED THE CASE OF CHOUDHURY & BROTHERS CITED BY LD. AO BUT WRONGLY ES TIMATED NP RATE 8% BEFORE INTEREST AND DEPRECIATION WITHOUT ANY REASON .THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEES OWN CASE WAS ALSO DE CIDED BY YOUR HONOUR VIDE APPEAL NO. 851/JP/14 DATED 28.04.2016 FOR AY2009-10 APPLYING NP RATE OF 5.5% BEFORE INTEREST AND DEPRECIATION. 2.1 THE RELEVANT FINDINGS OF THE COORDINATE BENCH I N ITA NO. 851/JP/14 DATED 28.4.2016 IS AS UNDER: WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WHATEVER DEFICIENCY P OINTED OUT BY THE AO ARE SUFFICIENT TO REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT. AS DISCUSSED ABOVE, WHICH HAS BEEN UPHELD BY THE LD. CIT(A) ALSO. THE ASSESSEE HIMSELF ADMITTED THAT IN A.Y. 2008-09 THE ASSESSEES CASE HAS BEEN ASSESSED NP RATE @ 5.5% IN SCRUTINY, WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE. THEREFORE PAST HISTORY OF THE CASE SUGGESTS THAT THE NP RATE @ 5.5% IS REASONABLE AS UPHELD BY THE LD. CIT(A) BEFORE DEPRECIATION AND INTEREST. ACCORDINGLY WE UPHOLD T HE ORDER OF THE LD. CIT(A) AND REJECT THE ASSESSEES APPEAL ON REJECTIO N OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT AND NP RATE DISCLOSED BY THE ASSESSEE. IN THE RESULT THE SOLE GROUND OF REVENUES APPEAL AND GROUND NO.1 OF THE ASSESSEES APPEAL ARE DISMISSED. 2.2 GIVEN THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH REFERRED (SUPRA), NP RATE OF 5.5% BEFORE DEPRECIATION AND INTEREST IS FOUND TO BE REASONABLE, GIVEN THE PAST HISTORY OF THE ASSESSEE. IN THE RES ULT, APPEAL OF THE ASSESSEE AND CROSS APPEAL OF THE REVENUE ARE DISMISSED. ITA NO. 537/JP/15 AND ITA NO. 562/JP/15 3. IN ITA NO. 537/JP/15 AS WELL AS CROSS APPEAL OF REVENUE IN ITA NO. 562/JP/15, SIMILAR GROUNDS HAVE BEEN TAKEN BY THE A SSESSEE EXCEPT GROUND NO. 2 AND THE REVENUE, FOLLOWING OUR DECISION IN ITA NO . 536/JP/15 & 561/JP/15, ITA NOS. 536, 537, 561 & 562/JP/15 SHRI RAJ KUMAR GUPTA, JAIPUR VS. DCIT, CIRCLE-6, JA IPUR 4 THE NP RATE @ 5.5% SUBJECT TO DEPRECIATION AND INTE REST IS FOUND REASONABLE, THE GROUNDS TAKEN BY THE ASSESSEE AND REVENUE ARE D ISMISSED. 4. REGARDING GROUND NO.2 OF THE ASSESSEE WHICH IS AGAINST NON-ALLOWANCE OF DEDUCTION OF SALES TAX FROM THE NP RATE, IT IS N OTED THAT SIMILAR ISSUE WAS RAISED BEFORE COORDINATE BENCH IN THE DECISION REFE RRED SUPRA AND THE SAME WAS DISMISSED. FURTHER THE LD. CIT(A) HAS ALREADY DEALT WITH THE MATTER STATING THAT HE HAS ALREADY FACTORED-IN AMOUNT OF SALES TAX WHILE ESTIMATING 8% NP RATE. SINCE WE HAVE ALREADY REDUCED THE NP RATE FR OM 8% TO 5.5%, THE SUBJECT GROUND IS DISMISSED. IN THE RESULT THE APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/09 /2016. SD/- SD/- ,- MH- TSU FOE FLAG ;KNO ( A.D. JAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 14/ 09/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAJ KUMAR GUPTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ADDL. CIT , RANGE-6, JAIPUR 3. VK;DJ VK;QDR@ CIT II, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-II, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.536 & 537 /JP/201 & 561& 562/JP/ 15) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NOS. 536, 537, 561 & 562/JP/15 SHRI RAJ KUMAR GUPTA, JAIPUR VS. DCIT, CIRCLE-6, JA IPUR 5 ]