RAJ CONSTRUCTION COMPANY, Jaipur V. ACIT, Jaipur

ITA 538/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2136 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: SIDDHARTH RANKACA
• Keywords: Rejection of books of accounts; Depreciation; Rule of consistency; Difference of opinion
• Section: 143(3)

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 DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 538/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. M/S RAJ CONSTRUCTION COMPANY A - 18, SETHI COLONY, JAIPUR. CUKE VS. THE ACIT CIRCLE - 5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. A ABFR 3294 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 524/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-5, JAIPUR. CUKE VS. M/S RAJ CONSTRUCTION COMPANY A - 18, SETHI COLONY, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABFR 3294 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SIDDHARTH RANKA(CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R. A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21.04.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24 /04/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE TWO CROSS APPEALS BY THE ASSESSEE AND THE REV ENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 09.03.2015. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 5 38/JP/2015 PERTAINING TO THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL A S IN FACTS OF THE CASE IN CONFIRMING THE REJECTION OF BOOKS OF ACCOUNTS U/S 1 45(3) OF THE IT ACT. 2 ITA NOS. 538/JP/2015 & 524/JP/2015 M/S RAJ CONSTRUCTION COMPANY. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN FACTS OF THE CASE IN ESTIMATING NET PROFIT @ 8% OF THE CONTRACT RECEIPTS (BEFORE DEPRECIATION, INTEREST, INTEREST AND SALARY TO PARTNERS) AS AGAIN ST N.P. RATE (SUBJECT TO ALL AS ABOVE) @ 6.86% DECLARED BY THE APPELLANT. 3. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AS WEL L IN FACTS OF THE CASE IN MAKING ARTIFICIAL & ARBITRARY DIFFERENTIATION OF TH E FACTS OF THE RELEVANT YER VIS--VIS FACTS OF THE PRECEDING YEARS AND THEREBY NOT CONSIDERING THE PAST HISTORY OF THE APPELLANT AS COMPARABLE. 4. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AS WEL L IN FACTS OF THE CASE IN NOT FOLLOWING THE APPELLANT ORDERS OF THE PRECEDING YEARS IN THE APPELLANTS OWN CASE THEREBY VIOLATED THE FUNDAMENTAL PRINCIPLE OF CONSISTENCY. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD/ ALTER ANY O F THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT, HE DOES NOT WISH TO PRESS GROUND NO. 1. THE LD. DR HA S NO OBJECTION, SAME IS DISMISSED HAS NOT PRESSED. 3. GROUND NOS. 2,3, AND 4 ARE AGAINST ESTIMATING TH E NET PROFIT @ 8%. 4. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY AND THE ASSESSMENT WAS FRAMED UNDER SECTIO N 143(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE AO AFTER NOTICING THE DEFECTS REITERATED THE BOOKS OF ACCOUNTS AND APPLIED NET PROFIT @ 11.5% ON THE GROSS RECEIPTS. THEREBY, THE ASSESSING OFFICER COMPUTED INCOME AT RS. 78,65, 260/- AGAINST THE INCOME DECLARED BY THE ASSESSEE AT RS. 25,28,240/- AGGRIE VED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CO NSIDERING THE SUBMISSIONS APPLIED NET PROFIT @ OF 8%. AGAINST THIS BOTH THE ASSESSEE AND REVENUE HAS FILED SEPARATED APPEALS. 3 ITA NOS. 538/JP/2015 & 524/JP/2015 M/S RAJ CONSTRUCTION COMPANY. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS OTHERWISE COVERED BY THE DECISION OF THE HONBLE TRIBUNAL IN ASSESSEE S OWN CASE PERTAINING TO THE A.Y. 2010-11. 6. THERE WAS DIFFERENCE OF OPINION AMONGST THE LD. JUDICIAL MEMBER AND THE ACCOUNTANT MEMBER OF THE TRIBUNAL. THE MATTER WAS REFERRED TO THE LD. 3 RD MEMBER AND LD. 3 RD MEMBER CONCURRED THE VIEW OF THE LD. ACCOUNTANT ME MBER. THEREBY, THE LUMP-SUM ADDITION OF RS. 4 LAKHS WAS CONFIRMED. THE FACTS ARE IDENTICAL AS WERE IN THE ASSESSMENT YEAR 2010-11. 7. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVES SUBMITTED THAT EACH ASSESSMENT YEAR IS INDEPENDENT REQUIRED TO BE ASSES SED IN ACCORDANCE WITH THE FACTS OF THAT YEAR. HE SUPPORTED THE ORDER OF THE ASSESS ING OFFICER. 8. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THOUGH THE ORDER OF THE AUTHORITIES BELOW. THERE IS NO CHANGE INTO THE FACTS AND CIRCUMSTANCES IN THE PRESENT YEAR. THE R EVENUE HAS NOT POINTED OUT, INTO FACTS AND CIRCUMSTANCES. THEREFORE, TAKING A CONSI STENT VIEW, WE HEREBY DIRECT THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO THE E XTENT OF RS. 4 LAKHS AS WAS MADE IN THE ASSESSMENT YEAR 2010-11. IN THE LIGHT OF THE A BOVE GROUND NOS. 2,3, & 4 OF THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. 9. GROUND NO. 5, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. THUS, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10. NOW, WE TAKE UP THE REVENUES APPEAL IN ITA NO. 52 4/JP/2015, PERTAINING TO THE ASSESSMENT YEAR 2011-12. 10.1 THE REVENUE HAS RAISED FOLLOWING GROUND OF APP EAL:- 4 ITA NOS. 538/JP/2015 & 524/JP/2015 M/S RAJ CONSTRUCTION COMPANY. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN APPLYING N.P. RATE OF 8.00% AS AGAINST N.P. RATE OF 11.5% APPLIED BY THE AO. 2. THE APPELLANT CRAVES ITS RIGHT TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 10.2. ONLY EFFECTIVE GROUND IS AGAINST APPLYING THE NET PROFIT @ 8% AGAINST THE NET PROFIT @ 11.5% APPLIED BY THE ASSESSING OFFICER. B OTH THE RESPECTIVE REPRESENTATIVES OF THE PARTIES HAVE ADOPTED THE SAM E ARGUMENT AS WERE IN ASSESSEES APPEAL IN ITA NO. 538/JP/2015 . THE ISSUE IN THIS APPEAL HAS ALREADY BEEN DECIDED IN ASSESSEES APPEAL IN ITA NO. 538/JP/2015 BY OBSERVING AS UNDER:- 7. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THOUGH THE ORDER OF THE AUTHORITIES BELOW. THERE IS NO CHANGE INTO THE FACTS AND CIRCUMSTANCES IN THE PRES ENT YEAR. THE REVENUE HAS NOT POINTED OUT, INTO FACTS AND CIRCUMSTANCES. THEREFORE, TAKING A CONSISTENT VIEW, WE HEREBY DIRECT THE ASSESSING OFF ICER TO RESTRICT THE ADDITION TO THE EXTENT OF RS. 4 LAKHS AS WAS MADE IN THE ASS ESSMENT YEAR 2010-11. IN THE LIGHT OF THE ABOVE GROUND NOS. 2,3, & 4 OF THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. THEREFORE, FOLLOWING OUR FINDING IN ITA NO. 538/JP/ 2015, THE GROUND RAISED IN THIS APPEAL IS DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 538/JP/2015 IS PARTLY ALLOWED AND APPEAL OF THE REVENUE IN ITA NO. 524/JP/2015 IS DISMISSED. 5 ITA NOS. 538/JP/2015 & 524/JP/2015 M/S RAJ CONSTRUCTION COMPANY. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY THE 24TH DAY OF APRIL 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 24 /04/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S RAJ CONSTRUCTION COMPANY. 2. THE RESPONDENT- THE ACIT CIRCLE-5, JAIPUR. 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 538/JP/2015 & 524/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR