AARCON INDIA, AMRITSAR V. INCOME TAX OFFICER,WARD 5 (1), AMRITSAR

ITA 573/ASR/2018

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8695 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 25-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 144; 44AD; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.573/Asr/2018 Assessment Year: 2015-16 M/s Aarcon India E-234, Ranjit Avenue, Amritsar. [PAN: AAPFA8150N] (Appellant) Vs. ITO, Ward-5(1), Amritsar. (Respondent) Appellant by None. Respondent by Ms. Kanchan Garg, Sr.DR Date of Hearing 18.10.2022 Date of Pronouncement 11.11.2022 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Appeals)-2, Amritsar, [in brevity the CIT(A)] bearing appeal No.10356/2017-18, date of order 28.08.2018, the order passed u/s 250(6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2015-16.The I.T.A. No.573/Asr/2018 Assessment Year: 2015-16 2 impugned order was emanated from the order of the ld. Income Tax Officer,Ward 5(1), Amritsar, (in brevity the AO) order passed u/s 144of the Act date of order 01.12.2017. 2. Tersely, we advert the fact of the case. The assessee is a Civil Contractor and declared turnover for the assessment year amount of Rs.5,24,34,588/-. The net profit was declared by the assessee @ 5.47 during this assessment year which is worked out amount of Rs.28,70,875/-. The assessment was initiated. The assessee was present before the AO and the assessment was completed u/s 144 for non submission of the books of account and the net profit was calculated @ 12% on the turnover of the assessee which is worked out amount of Rs.62,92,150/-. The assessee already declared the net profit Rs.28,70,875/- in return of income. So the difference amount Rs.34,21,275/- was added back with the total income of the assessee. The assessee has audited the books of account u/s 44AB of the Act and submitted the tax audit report with the return of income. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) after considering the submission of the assessee upheld the order of the ld. AO. 3. Aggrieved assessee filed an appeal before us. I.T.A. No.573/Asr/2018 Assessment Year: 2015-16 3 4. During the appeal hearing, none was present on behalf of the assessee. The matter is taken up with the consent of the ld. Sr. DR. 5. We heard the ld. Sr. DR and considered the documents available in record and also the order of both the revenue authorities. The assessee filed the details submission with ground of appeal and declared the year-wise net profit before the Bench, which is reproduced as below: SL NO Ass vr Sales (in Rs) Partners’ salary Net Profit shown Net profit rate Audit Section of Income Tax Act 1 2011-12 10,20,500 72,000 10,010 0.98 % 44AD 2 2012-13 12,81,526 72,000 30,522 2.38 % 44AD 3 2013-14 2,67,05,271 72,000 14,18,539 5.31 % 44AB 4 2014-15 23,65,204 1,00,000 89.216 3.77 % 44AD 5 2015-16 5,24,34,588 6,00,000 28,70,875 5.47 % 44AB 5.1 The main grievance of the assessee is that from assessment year 2011-12 to 2015-16 the assessee’s net profit was varied from 8% to 5.47%. The assessee maintained the books of account and tax audit was completed which was duly filed before the assessing authority. The ld. CIT(A) had passed the order without considering the average net profit of the assessee in each and every year. Only to I.T.A. No.573/Asr/2018 Assessment Year: 2015-16 4 upheld the order of the ld. AO by confirming the net profit ratio @ 12% of gross turnover. 6. The ld. Sr. DR only relied on the order of the revenue authorities and argued accordingly. 7. After a thoughtful consideration we find that the assessee has average net profit ranging from 0.98% to 5.47% on turn over. The assessee would be under the provision of section 44AD as the turnover is below 40 lacs for this assessment year.Considering the higher Turn Over the assessee is not under perview of section 44AD of the Act for this assessment year. So the applicability@8% net profit on turnover is not applicable suo motu on assessee. Both revenue authorities had not considered the nature of business, area of business, yearwise average net profit of the assessee. Only the net profit ratio 12% was confirmed on suo motu basis without considering the variance factors of the business. We find that considering the nature of the business and the average net profit from the assessment years 2011-12 to 2015-16 could not be @12% for the year under apple. The further opportunity should be allowed to the assessee for ascertaining the profit ratio for this assessment year for A.Y. 2015-16. Accordingly, the issue is setting aside to ld. CIT(A) for further adjudication. The assessee has also grievance for crediting of I.T.A. No.573/Asr/2018 Assessment Year: 2015-16 5 TDS which was deducted from his turnover. Needless to say the assessee should get a reasonable opportunity of hearing and documents which would be filed before the authority should be accepted and considered in accordance with law. 6. In the result, the appeal bearing ITA No.573/Asr/2018 isallowed for statistical purpose. Order pronounced in the open court on 11.11.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order