DCIT RG 22(1), NAVI MUMBAI V. NANJI DNA PATEL & SONS, MUMBAI

ITA 5613/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9537 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 5613/MUM/2010(A.Y. 2007-08) THE ASSTT. COMMISSIONER OF INCOME TAX 22(1), 4 TH FLOOR, TOWER 6, VASHI RLY. STN. BLDG., VASHI, NAVI MUMBAI - 400 703. (APPELLANT) VS. M/S.NANJI DANA PATEL & SONS, 101, ASMIT APARTMENT, OGHADBHAI LANE, MG ROAD, GHATKOPAR (E), MUMBAI - 400 077 APPELLANT BY : SHRI MOHIT JAIN RESPONDENT BY : SHRI PARAS SAVLA DATE OF HEARING : 26/11/2012 DATE OF PRONOUNCEMENT : 30 /11/2012 ORDER PER I.P.BANSAL, J.M THIS AN APPEAL FILED BY THE REVENUE. IT IS DIRE CTED AGAINST THE ORDER PASSED BY LD. CIT(A)-33, MUMBAI DATED 20/4/210 FOR ASSESSMENT YEAR 2007- 08. THE GROUND OF APPEAL READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE BY THE AO FROM RS.29,71,530/- TO RS.11,88,612/- WITHOUT VERIFYING ANY EXPENDITURE CLAIMED BY THE ASSESSEE. 2. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS A CIV IL CONTRACTOR. THE TURNOVER OF THE ASSESSEE IS RS. 1,35,70,984/-. AFT ER CLAIMING THE REMUNERATION TO THE PARTNERS AMOUNTING TO RS.5,17,782/- THE PROF IT RETURNED BY THE FIRM WAS RS.6,45,425/- AND NET PROFIT RETURNED BY THE ASSESS EE WAS 8.57% AS PER COMPUTATION FILED BY THE ASSESSEE IN THE GROUND OF APPEAL FILED BEFORE LD. CIT(A) AS UNDER:- ITA NO. 5613/MUM/2010(A.Y. 2007-08) 2 REMUNERATION TO PARTNER + PROFIT TOTAL 5,17,782/- 6,45,425/- + 1163206 *100+8.57% TOTAL TURNOVER 13570984 2.1 THE ASSESSEE DID NOT APPEAR BEFORE AO HENCE, TH E ASSESSMENT HAS BEEN FRAMED UNDER SECTION 144 OF THE INCOME TAX ACT,1961 (THE ACT) VIDE ORDER DATED 29/12/2009, WHEREIN DISALLOWANCE OF RS.29,71,530/- WAS MADE OUT OF VARIOUS EXPENSES AND A SUM OF RS.4,94,043/- WAS ADDED UNDE R SECTION 43B OF THE ACT. THEREFORE, THE ASSESSEE WAS ASSESSED AT AN INCOME O F RS.41,10,997/-. THESE ADDITIONS WERE AGITATED IN APPEAL FILED BEFORE LD. CIT(A). IT WAS SUBMITTED THAT IF ADDITION MADE BY THE AO IS TAKEN INTO CONSIDERAT ION THEN THE NET PROFIT ON THE GROSS PAYMENTS RECEIVED BY THE ASSESSEE WILL B E TO THE TUNE OF 30.29%. IT WAS SUBMITTED THAT AO MADE ADHOC DISALLOWANCE BEI NG 25% OF TOTAL EXPENSES OF RS.1,18,86,121/- WHICH IS AMOUNTING TO RS.29,71, 530/-. CONSIDERING ALL THESE SUBMISSIONS LD. CIT(A) HAS UPHELD THE ASSESSM ENT TO BE FRAMED UNDER SECTION 144 OF THE ACT. HOWEVER, LD. CIT(A) HAS RE STRICTED THE DISALLOWANCE OF EXPENSES TO 10% FROM 25%, THEREBY THE ADDITION OF R S.29,71,530/- HAS BEEN REDUCED TO RS.11,88,612/-, GRANTING THE RELIEF TO T HE ASSESSEE OF RS.17,82,918/-. AGGRIEVED WITH SUCH ORDER OF LD. C IT(A) THE REVENUE HAS FILED THE AFOREMENTIONED GROUNDS. 2.2 IT MAY ALSO BE MENTIONED HERE THAT ASSESSEE HA D ALSO AGITATED THE SUSTAINED ADDITION IN AN APPEAL FILED BEFORE ITAT, WHICH WAS DISMISSED BY ITAT ON THE GROUND OF NON-PROSECUTION VIDE ORDER DATED 21/12/2011 IN ITA NO.6008/M/2010. 3. LD. AR HAS SUBMITTED BEFORE US THAT THE ASSESSE E DOES NOT WANT TO PURSUE ITS APPEAL FURTHER AND HAS ACCEPTED THE ORDE R OF LD. CIT(A), HE SUBMITTED THAT ORDER OF LD. CIT(A) BEING REASONABLE SHOULD BE CONFIRMED. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ASSESS MENT ORDER AND SUBMITTED THAT RELIEF HAS WRONGLY BEEN GIVEN BY LD. CIT(A) AS ASSESSEE DID NOT ITA NO. 5613/MUM/2010(A.Y. 2007-08) 3 PRODUCE BOOKS OF ACCOUNT AND DID NOT COMPLY WITH T HE NOTICES ISSUED BY THE AO. 5. LD. AR HAS SUBMITTED BEFORE US THE CALCULATION A CCORDING TO WHICH AFTER DISALLOWANCE SUSTAINED BY LD. CIT(A) THE NET PROFIT RATE OF THE ASSESSEE WILL TO THE TUNE OF 17.32%. 6. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, WE ARE OF THE OPINION THAT A REASONABLE VIEW HAS BEEN TAKEN BY L D. CIT(A) AS THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS AND OTHER DETAILS ETC. IN ABSENCE THERE OF, A REASONABLE VIEW WAS TO BE TAKEN. THE ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST SUSTAINED ADDITION BY LD. CIT(A). THE NE T PROFIT RATE OF 17.32% AFTER GIVING EFFECT TO THE ORDER OF LD. CIT(A) WILL BE R EASONABLE AND WE CONFIRM THE ORDER OF LD. CIT(A). THE CALCULATION OF NET PROFI T RATE AFTER GIVING EFFECT TO THE ORDER OF LD. CIT(A) AS SUBMITTED BY LD. A.R IS AS UNDER: IF THE DISALLOWANCE AS PER THE CIT(A) IS TAKEN THE N THE NP COME TO 17.32% 1163206 + 1188612 + 2351818 X 100 = 17.32% 13570984 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH DAY OF NOV. 2012 SD/- SD/- (SANJAY ARORA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 30 TH NOV. 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R B BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.