MVR GL JOINT VENTURE, MUMBAI V. ITO 15(2)(2), MUMBAI

ITA 5505/MUM/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0692 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: N R AGARWAL
• Keywords: Maximum Marginal Rate

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , . , BEFORE SHRI JOGINDER SINGH , JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO . 5505 / MUM./ 2012 ( / ASSESSMENT YEAR : 2009 10 ) M/S. MVR GL JOINT VENTURE 304, GOKUL ARCADE, SUBHASH ROAD VILE PARLE (E), MUMBAI 400 057 PAN AAKFM7520P .. / APPELLANT V/S INCOME TAX OFFICER, WARD 15(2)(2) MATRU MANDIR GRANT ROAD (W), MUMBAI .... / RESPONDENT / ASSESSEE BY : S HRI N.R. AGARWAL / REVENUE BY : SHRI LOVE KUMAR / DATE OF HEARING 09.04.2015 / DATE OF ORDER 20.5.2015 O R D E R . , / PER D. KARUNAKARA RAO , A .M. TH E PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 6 TH JULY 2012 , PASSED BY THE COMMISSIONER (APPEALS) - 26 , MUMBAI, FOR THE ASSESSMENT YEAR 20 09 10 . FOLLOW ING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: - M/S. MVR GL JOINT VENTURE 2 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ESTIMATE OF THE INCOME @ 4% OF TURNOVER AND WHICH IS VERY EXCES SIVE ON THE FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING ESTIMATE OF THE INCOME WITHOUT REJECTING THE BOOKS OF ACCOUNT. 3. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT ASSESSEE HAD SUBCONTRACTED THE WORK TO PARTNER OF JOINT HOLDER AS PER AGREEMENT AND ERRED BY NOT CONSIDERING THE FACT THAT BOTH PARTNERS OF JOINT VENTURE HAD PAID TAXES ON THE INCOME FROM JOINT VENTURE. THUS, RESULTING IN DOUBLE TAXATION OF SAME INCOME. 4. THE A.O. ERRED IN MAKING ADDITION OF ` 61,009 ON ACCOU NT OF BANK INTEREST RECEIVED. 2 . THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A JOINT VENTURE BETWEEN G.L. CONSTRUCTION PVT. LTD. AND MVR. THE JOINT VENTURE WAS AWARDED A CONTRACT BY MMRD INVOLVING THE WIDENING OF ROADS. AS PER THE CONTRACT, TH E ENTIRE WORK HAS TO BE SUB CONTRACTED TO G.L. CONSTRUCTION PVT. LTD. ON BACK TO BACK BASIS. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT NIL . THE ASSESSING OFFICER, DURING THE SCRUTINY ASSESSMENT PROCEEDINGS, REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE PROFITS OF THE ASSESSEE APPLYING THE FLAT RATE OF 4% OF THE TOTAL RECEIPTS. THE TOTAL RECEIPTS ARE ` 31,77,14,507. THE ESTIMATED INCOME IS WORKED OUT TO ` 1,27,08,580. AFTER NETTING THE ABOVE INCOME WITH THE AMOUNT RETURNED BY IT AT ` 84,21,362, THE ASSESSING OFFICER MADE ADDITION OF ` 42,87,218. THE LEARNED CIT(A) CONFIRMED THE SAME VIDE HIS ORDER DATED 6 TH JULY 2012. BEING AGGRIEVED M/S. MVR GL JOINT VENTURE 3 BY THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE US WITH THE GROUNDS MENTIONED ABOVE. 3 . AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT OUT ATTENTION TO THE ORDERS OF THE REVENUE AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN ADEQUATE AND SUSTAINABLE REASONS FOR REJECTION OF BOOKS OF ACCOUNT BEFORE RESORTING TO THE ESTIMATION OF THE INCOME APPLYING THE FLAT RATE OF 4% OF THE TOTAL RECEIPTS OF THE ASSESSEE AS INCOME. THERE ARE NO REASONS OR JUSTIFICATION WHATSOEVER FOR ADOPTING 4% MENTIONED IN THE ORDER OF THE REVENUE . FURTHER, HE ALSO SUBMITTED THAT THE ORDERS OF THE REVENUE DO NOT FALL WITHIN THE MEANING OF SPEAKING ORDERS , THEREFORE, IT IS THE ULTIMATE PRAYER OF THE ASSESSEE THAT THE MATTER NEEDS TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. HE ALSO SUBMITTED THAT WHEN THE BOOKS OF ACCOUNT ARE COMPLETE AND ACCURATE IN ALL RESPECTS, THE DECISION OF THE ASSESSING OFFICER IN REJECTION OF THE BOOKS OF ACCOUNT IS UNSUSTAINABLE IN LAW. HE FURTHER SUBMITTED THAT REVENUE MODEL OF THE ASSESSEE IS NOT WELL UNDERSTOOD AND APPRECIATED BY THE REVENUE, THE ISSUE THAT SHOULD BE CONSIDERED IN THE REMAN D PROCEEDINGS, IF ANY. 4 . ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE ASSESSING OFFICER AND THE LEARNED CIT(A) M/S. MVR GL JOINT VENTURE 4 AND PLEADED THAT THE ORDERS SHOULD BE SUSTAINED WITHOUT ANY MODIFICATION. 5 . WE HAVE HEARD BOTH THE PART IES AND PERUSED THE ORDERS OF THE REVENUE AND THE PAPER BOOK FILED BEFORE US. IT IS UNDISPUTED FACT THAT THE ORDER OF THE LEARNED CIT(A) IS DEFICIENT ON THE ISSUES RELATING TO THE REJECTION OF THE BOOKS OF ACCOUNT, THE ISSUE RAISED IN GROUND NO.1 OF THIS APPEAL . INSOFAR AS THE ADOPTING THE FLAT RATE OF 4% OF THE TOTAL RECEIPTS AS INCOME OF THE ASSESSEE IS CONCERNED , THERE IS NO JUSTIFICATION AND THE ORDERS OF THE LEARNED CIT(A) / ASSESSING OFFICER HAVE NOT PROVIDED ANY BASIS TO SUPPORT THE SAME. IN OUR CONSIDERED OPINION, THERE IS A NEED TO REMAND ALL THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR WANT OF ISSUE BASED ADJUDICATION OF ALL THE GROUNDS BY PASSING A SPEAKING ORDER. ACCORDINGLY, WE SET A SIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND RESTORE ALL THE GROUNDS RAISED BY THE ASSESSEE TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO ADJUDICATION. THE ASSESSING OFFICER IS ALSO DIRECTED TO TAKE INTO ACCOUNT ALL THE AVAILABLE DECISIONS RE LEVANT TO THE ISSUE UNDER CONSIDERATION AND THE SAME SHOULD FIND PLACE IN THE SAID SPEAKING ORDER. CONSEQUENTLY, ALL THE GROUNDS RAISED BEFORE US ARE ALLOWED FOR STATISTICAL PURPOSES. 7 . M/S. MVR GL JOINT VENTURE 5 6 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT O N 20.05.2015 SD/ - JOGINDER SINGH JUDICIAL MEMBER SD/ - . D. KARUNAKARA RAO ACCOUNTANT MEM BER MUMBAI, DATED : 20.5.2015 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A); ( 4 ) / THE CIT, MUMBAI CITY CONCERNED; ( 5 ) , , / THE DR, ITAT, MUMBAI; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI