Shri Dinesh Kumar Sharma, Ujjain V. The Addl. CIT, Range-1, Ujjain

ITA 568/IND/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2882 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 01-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE; ARVIND MANTRI CAS
• Keywords: Proportionate interest
• Section: 44AD; 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AGDPS8579F I.T.A.NO. 568/IND/2012 A.Y. : 2008 - 09 SHRI DINESH KUMAR SHARMA, ADDL. CIT, RANGE 1, UJJAIN 65, SUDAMA NA GAR, UJJAIN VS APPELLANT RESPONDENT APPELLANT BY : SHRI S. S. DESHPANDE AND SHRI ARVIND MANTRI, CAS RESPONDENT BY : SHRI R. A. VERMA, SR. DR DATE OF HEARING : 12 . 0 3 .201 3 DATE OF PRONOUNCEMENT : 10 . 0 4 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A) DATED 21.8.2012 FOR THE ASSESS MENT YEAR 2008-09. -: 2: - 2 2. THE ASSESSEE IS BASICALLY AGGRIEVED FOR ADDITION OF RS. 20,67,994/- MADE ON ACCOUNT OF DISALLOWANCE OF LABO UR EXPENSES AND THE ADDITION MADE ON ACCOUNT OF DISALL OWANCE OF VEHICLE, MAINTENANCE AND DISALLOWANCE OF PURCHASES OF BITUMEN, EMULSION AND OIL. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE IS A CIVIL CONTRACTOR AND REGISTERED WITH VARIOUS GOVERN MENT DEPARTMENTS FOR CARRYING OUT ROAD CONSTRUCTION AND OTHER CIVIL CONSTRUCTION WORK OF INFRASTRUCTURE DEVELOPMENT. RE TURN DECLARING AN INCOME OF RS. 11,20,000/- WAS FILED ON 20-09- 2008. ASSESSMENT U/S 143(3) WAS COMPLETED BY THE AS SESSING OFFICER ON 28.12.2010 AFTER MAKING ADDITIONS UNDER THE FOLLOWING HEADS :- 1. DISALLOWANCE OUT OF LABOUR PAYMENTS 20,67,994/ - 2. DISALLOWANCE OUT OF VEHICLE RUNNING EXPENSES 1,14,270/ - 3. DISALLOWANCE OUT OF EXPENSES IN RESPECT OF BITUMEN, EMULSION & OIL 2,91,241/ - 4. DISALLOWANCE OF PROPORTIONATE INTEREST ON ADVANCES 18,641/ - 5. CAPITAL LOSS ON ACCOUNT OF SALE OF ROAD ROLLER 45,571/ - 6. LOAN RECEIVED FROM SHRI BABULAL SHARMA AND INTEREST PAID THEREON 2,25,755/ - -: 3: - 3 7. ADVANCE RECEIVED FROM SHRI PRAKASH BUM 4,00,000/ - TOTAL 31,63,472/ - TOTAL INCOME WAS ASSESSED AT RS. 42,83,470/-. AGAINST THE ORDER APPELLANT HAS PREFERRED THE APPEAL. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED TH E DISALLOWANCE OF LABOUR PAYMENT, VEHICLE RUNNING EXP ENSES AND EXPENSES IN RESPECT OF BITUMEN, OIL ETC. ASSESSEE I S IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THE ASSESSEE IS A CIVIL CONTRACTOR . BY FINDING DEFECTS IN THE BOOKS OF ACCOUNT, THE ASSESSING OFFI CER HAS MADE VARIOUS DISALLOWANCE. IN CASE OF CIVIL CONTRAC TOR EVEN IF THE ASSESSEE DID NOT MAINTAIN PROPER BOOKS OF ACCOU NT, THE RETURN CAN BE FILED BY TAKING NET PROFIT RATE AT 8 % ON THE GROSS CONTRACT RECEIPTS, WHERE SUCH CONTRACT RECEIPTS DO NOT EXCEED THE LIMITS SPECIFIED U/S 44AD OF INCOME-TAX ACT, 19 61. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO COM PUTE NET PROFIT FROM CIVIL CONTRACT AT 8 % OF GROSS RECEIPTS . HOWEVER, NO -: 4: - 4 SEPARATE ADDITION OR DISALLOWANCE IS WARRANTED. AC CORDINGLY, THE ADDITION/DISALLOWANCE MADE BY THE ASSESSING OFF ICER ON ACCOUNT OF LABOUR PAYMENTS, VEHICLE RUNNING EXPENSE S, EXPENSES ON BITUMEN, OIL ETC. ARE SET-ASIDE 6. GROUND RAISED WITH RESPECT TO ADDITION OF LOAN AMOU NT, WHICH COULD NOT BE EXPLAINED BEFORE THE LOWER AUTHO RITIES, CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS TH AT FUND TO THE EXTENT OF PROFIT ESTIMATED AT HIGHER RATE WAS A VAILABLE TO THE ASSESSEE, ACCORDINGLY, TO THE EXTENT OF SUCH AV AILABLE FUNDS, ADDITION MADE ON ACCOUNT OF CASH CREDIT SHOU LD BE SET OFF. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THESE ADDITIONS WERE NOT PRESSED BEFORE CIT(A), THEREFORE, CIT(A) HAD CONFIRMED THESE ADDITIONS. BE FORE US, LD. AUTHORIZED REPRESENTATIVE HAS TAKEN A NEW PLEA AND REQUESTED TO DELETE THE ADDITION TO THE EXTENT OF EXCESS PROF IT AVAILABLE TO ASSESSEE DUE TO HIGHER ESTIMATION OF BUSINESS INCOM E. DETAILS OF RECEIPTS FROM CREDITORS AND ESTIMATION OF PROFIT ON CONTRACT RECEIPTS WAS AS UNDER :- -: 5: - 5 DATE OF RECEIPTS OF AMOUNT FROM CREDITORS NAQME OF THE CREDITORS AMOUNT RECEIVED FROM CREDITORS GROSS CONTRACT RECEIPTS DURING THE PERIODS NET PROFIT @5.62 % OF GROSS CONTRACT RECEIPTS NET PROFIT @8% OF GROSS CONTRACT RECEIPTS DIFFERENCE BEING FUND AVAILABLE WITH THE ASSESSEE 7.9.2007 PRAKASH BUM 1,00,000 8,155,556.00 458,342.00 652,444.00 194,102.00 1.10.2007 -DO- 2,00,000 2,624,806 147,514.00 109,984.00 62,470.00 24.10.2007 - DO 100,000.00 40,9 73.00 2,303.00 3,278.00 975.00 18.12.2007 BABURAM SHARMA 140,000.00 2,000,721.00 112,441.00 160,.058.00 47,617.00 540.000.00 12,822,056.00 720,600.00 1,025,764.00 305,164.00 8. IT IS CLEAR FROM THE ABOVE TABLE THAT PROFIT ON CON TRACT RECEIPTS WORKS OUT TO BE RS. 10,25,764/- AS AGAINS T PROFIT OF RS. 7,20,600/- SHOWN BY THE ASSESSEE. THUS, THE EXT RA FUND OF RS. 3,09,464/- WAS AVAILABLE TO THE ASSESSEE. KEEPI NG IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE OUT OF VARIOUS ADDITIONS MADE U/S 68, WE DIRECT TO ALLOW SET OFF T O THE EXTENT OF RS. 3,05,164/-. ACCORDINGLY, BALANCE ADDITION MA DE U/S 68 IS HEREBY CONFIRMED. 9. IN THE RESULT, THE APPEAL IS ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL, 2013. SD/ - SD/ - (JOGIND ER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH APRIL, 2013. CPU* 810.4