Asstt.Commissioner of Income Tax, Lucknow V. M/s. Unique Power Engineers , Lucknow

ITA 616/LKW/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70547 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-09-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO.616/LKW/2012 ASSESSMENT YEAR: 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S UNIQUE POWER ENGINEERS, RANGE-I, LUCKNOW. ROOM NO.202, DURGAMA TOWER, LALBAGH, LUCKNOW. (PAN: AACFU 0176 B). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.K. RAM, D.R. RESPONDENT BY : NONE DATE OF HEARING : 10.09.2013 DATE OF PRONOUNCEMENT : 10.09.2013 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I DATED 22.10.2012 AND PERTAINS TO A.Y. 2009-10. 2. THE ISSUE IS RAISED THAT THE LD. CIT(A) ERRED IN RESTRICTING ESTIMATION OF NET PROFIT (N.P.) TO 6% OF TURNOVER AS AGAINST 10% EST IMATED BY THE A.O. 2 ITA NO.616/LKW/2012 A.Y. 2009-10 3. IN THIS CASE, THE ASSESSEE IS ENGAGED IN THE BUS INESS OF RURAL ELECTRIFICATION. IT FILED ITS RETURN OF INCOME ON 30.09.2009 DECLARING A TOTAL INCOME OF RS.96,23,583-. THE FIRST NOTICE UNDER SECTION 143(2) WAS ISSUED ON 03.09.2010. THE A.O. ISSUED FURTHER NOTICES UNDER SECTION 143(2) AND 142(1) AND QUESTIONNAIRE ASKING THE ASSESSEE TO FURNISH INFORMATION, DETAILS AND TO PRO DUCE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS. THE ASSESSEE WAS GIVEN VARIOUS OPPORTUNI TIES TO MAKE COMPLIANCE BUT IT FAILED TO DO SO. AS THE REQUISITE COMPLIANCE WAS N OT MADE BY THE ASSESSEE, THE A.O. COMPLETED THE ASSESSMENT UNDER SECTION 144/143 (3) OF THE I.T. ACT ON 26.12.2011. THE A.O. DID NOT ACCEPT THE NET PROFIT DISCLOSED AT 4.93% OF THE TURNOVER AND HE, AFTER REJECTING THE BOOKS OF ACCOU NTS, TREATED 10% OF THE TURNOVER AS NET PROFIT WHICH RESULTED IN ASSESSMENT OF TOTAL INCOME OF RS.1,95,20,452/-. THE INCOME ASSESSED LED A DEMAND OF RS.42,08,560/-. 4. UPON ASSESSEES APPEAL, THE LD. CIT(A) NOTED THA T THE ESTIMATE OF N.P. AT THE RATE OF 10% OF THE TURNOVER AS MADE BY THE A.O. WAS NOT BASED ON EITHER ANY COMPARABLE CASES OR ANY LOGICAL AND SCIENTIFIC ANAL YSIS OF MATERIAL AVAILABLE. HE OBSERVED THAT THE A.O. HAS ALSO NOT EXAMINED THE FI NANCIAL RESULTS OF THE PAST YEARS TO HAVE A PROPER APPRECIATION OF THE CORRECTNESS OR OTHERWISE OF N.P. RATE DISCLOSED FOR THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) P ROCEEDED TO HOLD THAT THE N.P. IN THIS CASE CAN BE REASONABLY ESTIMATED ON 6% OF THE TURNOVER. 3 ITA NO.616/LKW/2012 A.Y. 2009-10 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, IN OUR CONSIDERED OPINION, THIS APPEAL CAN BE DISPOSED OF BY HEARING THE LD. DEPARTMENTAL REPRESE NTATIVE AND REFERRING TO THE RECORDS. 7. UPON CAREFUL CONSIDERATION, WE FIND THAT IN THIS CASE THE ASSESSEE HAS NOT CO- OPERATED WITH THE A.O. THE ASSESSMENT ORDER HAS BE EN PASSED UNDER SECTION 144 OF THE I.T. ACT. IN THE ASSESSMENT ORDER BOOKS OF ACCOUNTS WERE REJECTED. THE A.O. DID NOT ACCEPT THE NET PROFIT DISCLOSED BY THE ASSE SSEE AT 4.93% OF THE TURNOVER. THEREFORE, AFTER REJECTING THE BOOKS OF ACCOUNTS, H E TREATED 10% OF THE TURNOVER AS NET PROFIT. WE FIND THAT IN THIS REGARD, THE LD. C IT(A) IS CORRECT IN HOLDING THAT THE A.O. HAS FAILED TO APPRECIATE PROPERLY THE FACTS IN THIS CASE AND THE PAST COMPARABLE RESULTS. THE A.O. HAS NOT CONSIDERED THE PAST RESU LTS OF THE ASSESSEE. HE HAS ALSO NOT REFERRED TO ANY COMPARABLE CASE. IT IS NOTED T HAT IN THE PRECEDING TWO YEARS ASSESSEES NET PROFITS WERE 5.07% AND 13.81%. UNDE R THE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE ESTIMATE OF 6% N.P. BY THE LD. CIT(A) IS APPROPRIATE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. UNDER THE CIR CUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. 4 ITA NO.616/LKW/2012 A.Y. 2009-10 8. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 10.09.2013) SD/- SD/- (C.M. GARG) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) 4. CIT 5. D.R. ASSISTANT REGISTER