TASNEEM H. SAIFEE, MUMBAI V. ITO 17(1)-3, MUMBAI

ITA 589/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8736 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 20-01-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 25-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRITA MISRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH BEFORE SHRI D.K.AGARWAL, JUDICIAL MEMBER & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.589/MUM/2010 A.Y 2003-04 MRS. TASNEEM H. SAIFEE, PROP. UNICOAT, 153/155, MAZGAON, DR. MACARENA ROAD, MUMBAI 400 010, PAN: AMBPS 2011 A VS. INCOME TAX OFFICER 17 (1) 3, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAMEER DALAL. RESPONDENT BY : SMT. AMRITA MISRA. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING THE LD. COUNSEL OF THE A SSESSEE POINTED OUT THAT THE ONLY DISPUTE IS REGARDING REJECTION OF BOO KS AND ESTIMATION OF PROFITS. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT DUR ING ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO FURNISH DETAILS O F HANDLING AND LABOUR CHARGES AS WELL AS WAGES. A DETAILED CHART W AS ALSO FURNISHED. THE AO ISSUED NOTICES U/S.133[6] TO FEW PARTIES. SO ME OF THEM CONFIRMED THE CONTRACT AND SOME COMPLIED VERY LATE. IT WAS OBSERVED THAT SOME OF THE EXPENSES CLAIMED WERE ALSO NOT VER IFIABLE AND, THEREFORE, BOOKS OF ACCOUNTS WERE REJECTED. THE AO FURTHER OBSERVED 2 THAT ASSESSEE HAS DECLARED NET PROFIT OF 7.10% WHIC H WAS ULTIMATELY ESTIMATED AT 15%. 3. ON APPEAL, THE ACTION OF THE AO WAS CONFIRMED. 4. BOTH THE PARTIES WERE HEARD IN DETAIL. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THE AO HAD VALID REASON FOR REJECTION OF THE BOOKS BECAUSE EVE N SOME OF THE EXPENSES WERE NOT VERIFIABLE. HOWEVER, AT THE SAME TIME WE ARE OF THE VIEW, THAT WHEN BEEN REJECTED PROFIT HAS TO BE ESTI MATED JUDICIOUSLY. EVEN SEC.44AD PRESCRIBES PRESUMED NET PROFIT RATE O F 8% WHEN NO BOOKS OF ACCOUNTS ARE MAINTAINED BY THE PERSONS ENG AGED IN THE BUSINESS OF CIVIL CONSTRUCTION. SINCE ASSESSEE IS A CIVIL CONTRACTOR, THEREFORE, WE ARE OF THE VIEW THAT ENDS OF JUSTICE WOULD MEET IF NET PROFIT IS ESTIMATED AT 8%. THIS PROPOSAL WAS AGREED EVEN BY THE LD.COUNSEL OF THE ASSESSEE. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO APPLY THE NET PROFIT RA TE OF 8%. 6. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JANUARY, 2011. SD/- SD/- (D.K.AGARWAL) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 28 TH JANUARY, 2011. P/-* 3