ACIT, Circle-BMR, BARMER V. Shri Kailash Chand Khatri, JAISALMER

ITA 537/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74925 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Revised return
• Section: 2

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.537/JODH/2013 (A.Y. 2009-10) ACIT, CIRCLE-BMR, VS. SHRI KAILASH CHAND KHATRI, BARMER. PROP. M/S. SATYA CONSTRUCTION, 673, GANDHI COLONY, JAISALMER. PAN NO. ABSPK 5748 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJENDRA JAIN DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 26/02/2014. DATE OF PRONOUNCEMENT : 06/03/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 25/09/2013 OF LD. CIT (A), JODHPUR. THE ONLY GROUN D RAISED IN THIS APPEAL READS AS UNDER: IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CI T(A) HAS ERRED IN:- 1. NOT APPRECIATING THE FACT THAT TAKING FDR AND PL EDGING THEM AS SECURITIES FOR TAKING LOANS ARE TWO SEPARATE TRANSA CTIONS. FDRS 2 PLEDGED AS SECURITIES IN BANK FOR TAKING LOANS FOR BUSINESS INTEREST ON SUCH FDRS IS INCOME FROM OTHER SOURCES THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF THE APPEAL IS FINAL LY HEARD 2 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE F ILED RETURN OF INCOME ON 30/09/2009 DECLARING TOTAL INCOME AT RS. 64,80,450/- WHICH WAS SUBSEQUENTLY REVISED BY FILING REVISED RETURN O N 04/07/2010 AT THE SAME RETURNED INCOME. THE ASSESSING OFFICER NOTICE D THE FOLLOWING DEFECTS IN THE MAINTENANCE OF THE BOOKS OF ACCOUNTS :- A. THE ASSESSEE HAS NOT MAINTAINED STOCK REGISTER FOR THE MATERIAL CONSUMED ON DAY TO DAY BASIS AND THE WORK IN PROGRE SS IS TAKEN ON ESTIMATED BASIS. B. MOST OF THE EXPENSES IN CARRIAGE INWARD, LABOUR REPAIR & MAINTENANCE OF EXPENSES, RASODA & CAMP EXPENSES ETC ARE IN CASH AND NOT SUPPORTED BY PROPER VOUCHERS. C. THE VOUCHERS ARE SELF-MADE VOUCHERS ONLY. D. THE ASSESSEE HAS NOT MAINTAINED DETAILS OF EXPEN SES SITE WISE AND WORK WISE. E. THE ASSESSEE HAS NOT MAINTAINED SALARY REGISTER, ATTENDANCE REGISTER ETC. 3. THE ASSESSING OFFICER CONCLUDED THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE DID NOT GIVE CORRECT PICTURE OF PROFIT AND REQUIRED TO BE REJECTED UNDER SECTION 145(3) OF THE I.T. ACT, 1961 (HEREINA FTER REFERRED TO AS THE ACT IN SHORT). THE ASSESSING OFFICER AFTER REJECT ING THE BOOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE ACT AND CONSIDERING THE PAST HISTORY OF THE 3 ASSESSEE APPLIED NET PROFIT RATE OF 9% ON THE BASIS THAT THE SAME WAS HELD TO BE JUSTIFIABLE BEFORE ALLOWING STATUTORY DEDUCTI ON BY THE ITAT FOR THE A.Y. 2007-08. THE ASSESSING OFFICER, ACCORDINGLY, MADE THE ADDITION OF RS. 19,03,430/- AND ALSO ADDED RS. 11,26,898/- BEIN G INTEREST RECEIVED FROM FDRS AND NSCS SEPARATELY. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A), WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER I N APPLYING THE NET PROFIT RATE OF 9%. AS REGARDS TO THE ADDITION OF R S. 11,26,898/-, THE SUBMISSION OF THE ASSESSEE BEFORE THE LD. CIT(A) WA S THAT THE FDRS AND NSCS WERE PURCHASED FOR BUSINESS PURPOSES I.E. FOR OBTAINING CONTRACT WORK AND WERE PLEDGED WITH PWD AUTHORITIES. IT WAS FURTHER STATED THAT THE INTEREST INCOME ON SUCH FDRS AND NSCS WOULD FOR M PART OF INCOME FROM CONTRACT BUSINESS. RELIANCE WAS PLACED ON THE DECISION OF ITAT, JODHPUR IN THE CASE OF SHRI RADHA KISHAN BENIWAL VS. ACIT IN I.T.A.NO. 115/JU/2008 ORDER DATED 09/07/2004 AND IN THE CASE OF M/S. JAIN CONSTRUCTION VS. DCIT IN I.T.A.NO. 537/JU/2009. 5. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO ALLOW TH E CLAIM OF THE ASSESSEE AFTER VERIFICATION OF THE BOOKS OF ACCOUNTS AND ALS O DIRECTED THE ASSESSEE 4 TO PROVIDE NECESSARY DETAILS WITH EVIDENCE OF SUCH FDRS AND INTEREST ACCRUED ON THEM DURING THE YEAR. NOW THE DEPARTMEN T IS IN APPEAL. 6 . LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LEARNED COUNSEL FOR THE ASSESSEE IN HIS RIVAL SUBMI SSIONS, REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND F URTHER SUBMITTED THAT THERE WAS DIRECT NEXUS BETWEEN FDR AND CONTRAC T WORK. THEREFORE, INTEREST WAS TO BE CONSIDERED AS PART OF CONTRACT B USINESS AND NO SEPARATE ADDITION WAS TO BE MADE. RELIANCE WAS PLA CED ON THE DECISION OF ITAT, JODHPUR BENCH, JODHPUR IN THE CASE OF SHRI LAL CHAND CHOUDHARY VS. ACIT, BARMER IN I.T.A.NO. 191/JU/2012 ORDER DATED 07/03/2013. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A) DIRECTED TH E ASSESSING OFFICER TO MAKE PROPER VERIFICATION AND IF IT IS FOUND THAT TH OSE FDRS WERE HAVING DIRECT NEXUS WITH THE CONTRACT BUSINESS AND WERE US ED AS SECURITY TO OBTAIN THE CONTRACT WORK THEN NO SEPARATE ADDITION WAS TO BE MADE AND IF ANYTHING FOUND CONTRARY, THE ASSESSING OFFICER SHAL L STICK WITH HIS ORDER. IN OUR OPINION, LD. CIT(A) HAS TAKEN A JUST VIEW WH ICH DO NOT REQUIRE ANY 5 INTERFERENCE ON OUR PART. IN THAT VIEW OF THE MATT ER, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 8 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMIS SED. (ORDER PRONOUNCED IN THE COURT ON 6 TH MARCH, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06 TH MARCH, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.