ACIT, Jaipur V. ZUBERI ENGINEERING COMPANY, Jaipur

ITA 631/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99482 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 24-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Keywords: Depreciation
• Section: 43B

Judgement Text

ITA NO.631/JP/2014 ACIT, CIRCL E- 2,JAIPUR VS. M/S. ZUBERI ENGINEERING COMPANY 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE:SHRI R.P.TOLANI, JM & SHRI VIKRAM SINGH YADA V, AM VK;DJ VIHY LA-@ ITA NO. 631/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 THE ACIT CIRCLE- 2 JAIPUR CUKE VS. M/S. ZUBERI ENGINEERING COMPANY 2835, JOGIYON KA TIBBA, PHUTA KHURA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAAFZ 2103 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/11/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 18 /11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM:- THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER O F THE LD. CIT(A)-I, JAIPUR DATED 30-07-2014 FOR THE ASSESSMENT YEAR 201 1-12 WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE. 1. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTIONS OF DEPRECIATION, INTEREST AND R EMUNERATION TO PARTNERS OUT OF THE NET PROFIT ARRIVED BY THE AO BY APPLYING NET PROFIT RATE OF 8% ON GROSS RECEIPTS AFTER REJEC TING THE BOOKS OF ACCOUNT. ITA NO.631/JP/2014 ACIT, CIRCL E- 2,JAIPUR VS. M/S. ZUBERI ENGINEERING COMPANY 2 (II) WHETHER ANY DEDUCTION WITH RESPECT TO DEPRECIATION, INTEREST AND REMUNERATION TO PARTNERS CAN BE ALLOWED SUBSEQUENT TO APPLYING NET PROFIT RATE ON T HE GROSS RECEIPT OF THE ASSESSEE FIRM. 2. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 87,796/- OF EMPLOYEES CONTRIBUTION TO PF AND ESI WHICH WAS DEPOSITED BEYOND THE PRESCR IBED TIME LIMIT PROVIDED IN THE RESPECTIVE ACTS. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOL DING THAT EMPLOYEES CONTRIBUTION TO PF AND ESI ARE GOVERNED B Y THE PROVISION OF SECTION 43B AND NOT BY SECTION 36(1) ( VA) R.W.S. 2(24(X) OF THE ACT. 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPIT E OF SERVICE OF NOTICE OF THIS HEARING. CONSEQUENTLY WE ARE LEFT WITH NO A LTERNATIVE BUT TO DECIDE THE APPEAL ON MERITS, EX PARTE QUA THE ASSESSEE, AF TER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON RECORD. 2.2 THE LD. DR RELIED ON THE ORDER OF THE AO. 2.3 WE HAVE HEARD THE LD. DR AND PERUSED THE MATER IALS AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A) HAS DECIDED BOT H THE ISSUES IN FAVOUR OF THE ASSESSEE BY FOLLOWING OBSERVATIONS. 4.1 SO FAR AS THE DETERMINATION OF INCOME IS CONCERNED, IT IS NOTED THAT THE AO HAS ESTIMATED TH E INCOME BY APPLYING NET PROFIT RATE OF 8% ON GROSS CONTRACTUAL RECEIPTS AND HAS DENIED THE CLAIM OF DEPRECIATION, PAYMENT OF IN TEREST ETC. IT ITA NO.631/JP/2014 ACIT, CIRCL E- 2,JAIPUR VS. M/S. ZUBERI ENGINEERING COMPANY 3 IS HOWEVER, NOTED THAT IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEAR 2009-10 THE HON'BLE ITAT VIDE ITS ORDER DATED 15-01-2014 IN ITA NO. 647/JP/2012 HAS HELD AS UNDER:- THEREFORE, WE AMEND THE LATER PART OF THE FINDING S OF THE LD. CIT(A) WHERE HE ADOPTED NET PROFIT RATE OF 5.12% ON TOTAL CONTRACT RECEIPTS ALLOWING DEPRECIAT ION, INTEREST AND REMUNERATION PAID TO PARTNERS. IN OUR CONSIDERED OPINION, THE LAW DEMAND CONSISTENCY TO A VOID ANY FUTURE MISUNDERSTANDING AND TO KEEP THE FINDING S IN THE SAME MANNER WE HOLD THAT NET PROFIT RATE OF 8% FURTHER SUBJECT TO DEPRECIATION, INTEREST AND REMUN ERATION PAID TO PARTNER COULD BE FINAL FINDING. ACCORDINGLY , WE HOLD AS ABOVE AND ALLOW THE APPEAL OF THE ASSESSEE TO THAT EXTENT. RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE ITAT I N THE APPELLANTS OWN CASE AS MENTIONED ABOVE, THE APPLIC ATION OF NET PROFIT RATE OF 8% IS UPHELD, SUBJECT TO FURTHER ALL OWANCE OF DEPRECIATION, INTEREST AND REMUNERATION PAID TO THE PARTNERS. SINCE AFTER ALLOWING DEPRECIATION, INTEREST AND REM UNERATION, THE NET PROFIT WOULD BE LESS THAN WHAT HAS BEEN DEC LARED BY THE APPELLANT, THE NET PROFIT DECLARED BY THE APPELLANT AMOUNTING TO RS. 4,01,05,375/- IS ACCEPTED. THE APPEAL ON THIS G ROUND IS, ACCORDINGLY, ALLOWED. 5.1 I HAVE CONSIDERED THE FACTS OF THE CASE. IT I S NOTED THAT THE AO HAS MADE THE DISALLOWANCE ON THE GROUND THAT THE SAID AMOUNT WAS NOT DEPOSITED BEFORE DUE D ATE. THE CONTENTION OF THE APPELLANT THAT THE RELEVANT AMOUN T WAS DEPOSITED BEFORE THE DUE DATES PRESCRIBED U/S 43B W AS NOT ACCEPTED BY THE AO. IT IS HOWEVER, NOTED THAT THE J URISDICTIONAL HIGH COURT IN THE CASE OF UDUS SANGH LTD. (SUPRA) H AS HELD THAT THE PAYMENT MADE BEFORE FILING OF THE RETURN I S TO BE ALLOWED. HENCE, THE DISALLOWANCE MADE BY THE AO DOE S NOT APPEAR TO BE JUSTIFIED AND IS, ACCORDINGLY, DELETE D. ITA NO.631/JP/2014 ACIT, CIRCL E- 2,JAIPUR VS. M/S. ZUBERI ENGINEERING COMPANY 4 SINCE THE LD. CIT(A) HAS RELIED ON THE ITAT ORDER ( SUPRA) AND JUDGEMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS . UDAIPUR DUGDH UTPADAK SAHKARI SANGH LTD. [2013) 35 TAXMANN.COM 61 6, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH IS U PHELD. THUS GROUND NO. 1 AND 2 OF THE REVENUE ARE DISMISSED 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 /11/201 5. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 /11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE- 2, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. ZUBERI ENGINEERING COMPANY, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.631/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR