Sukhwinder Singh, Kurukshetra V. DCIT, Kurukshetra

ITA 639/CHANDI/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8919 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 29-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 639/CHD/2015 ASSESSMENT YEAR : 2009-10 SHRI SUKHWINDER SINGH, VS THE DCIT, GOVT. CONTRACTOR, CIRCLE, # 84/3, GURUDWARA GALI, KURUKSHETRA. PEHOWA, DISTT.- KURUKSHETRA. PAN: ATXPS3122M & ITA NO. 640/CHD/2015 ASSESSMENT YEAR : 2010-11 SHRI SUKHWINDER SINGH, VS THE JCIT, GOVT. CONTRACTOR, KURUKSHETRA RANGE, # 84/3, GURUDWARA GALI, KURUKSHETRA. PEHOWA, DISTT.- KURUKSHETRA. PAN: ATXPS3122M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 05.12.2016 DATE OF PRONOUNCEMENT : 07.12.2016 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS) ROHTAK DATED 31.03.2015 FOR ASSESSMENT YEARS 2009-10 AND 2010-11 . 2. IN BOTH THE APPEALS, THE ASSESSEE CHALLENGED THE REJECTION OF THE BOOKS OF ACCOUNT UNDER SECTION 145 (3) OF 2 THE INCOME TAX ACT AND CONFIRMATION OF APPLICATION OF NET PROFIT RATE OF 12% THEREBY MAKING ADDITION TO T HE RETURNED INCOME. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A CIVIL CONTRACTOR AND CASES HAVE BEEN TAKEN UP FOR SCRUTIN Y. THE ASSESSEE HAD STATED THAT NO STOCK REGISTER WAS MAIN TAINED AND IN THE ABSENCE THEREOF, THE DETAILS OF MATERIAL PURCHASED LIKE CEMENT, BRICKS, BAJRI, AND BITUMEN E TC. BY THE ASSESSEE COULD NOT BE VERIFIED. THE ASSESSING OFFICER RECORDED SEVERAL FACTS IN THE ASSESSMENT ORDER. TH E BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT COMPLETE AND COR RECT AND ARE NOT RELIABLE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CASE OF THE ASSESSEE IS OF CIVIL CONTRACTOR, TH E MAIN EXPENSES ARE THE EXPENSES INCURRED ON MATERIAL PURC HASED AND OF LABOUR. BOTH THESE EXPENSES ARE NOT VERIFIA BLE FOR THE REASONS RECORDED IN THE ASSESSMENT ORDER. THE ASSES SING OFFICER, ACCORDINGLY, REJECTED THE BOOK RESULTS UND ER SECTION 145(3) OF THE INCOME TAX ACT. THE ASSESSING OFFICE R NOTED THAT NET PROFIT RATE OF 12% SHOULD BE APPLIED IN VI EW OF THE JUDGEMENT OF THE HON'BLE HIGH COURT IN THE CASE OF PRABHAT KUMAR, CONTRACTOR, SIRSA (2010) 323 ITR 676. THE ASSESSING OFFICER ALSO NOTED THAT IN PREVIOUS ASSES SMENT YEAR ALSO, NET PROFIT RATE OF 12% HAVE BEEN APPLIED AND CONFIRMED BY THE LD. CIT(APPEALS) IN ASSESSMENT YEA R 2008- 09. THE ASSESSING OFFICER IN ASSESSMENT YEAR 2009- 10, ACCORDINGLY, COMPUTED THE INCOME OF THE ASSESSEE BY APPLYING NET PROFIT RATE OF 12%. IN ASSESSMENT YEA R 3 2010-11, ASSESSING OFFICER RECORDED THE SAME FACTS AND NOTED VARIOUS DEFECTS IN THE BOOKS OF ACCOUNT OF TH E ASSESSEE AND APPLIED NP RTE OF 12% AND COMPUTED INC OME OF THE ASSESSEE ACCORDINGLY. 3(I) THE LD. CIT(APPEALS) CONFIRMED THE REJECTION O F THE BOOKS OF ACCOUNT IN BOTH THE YEARS AND ALSO CONFIRM ED THE ADDITION ON MERIT AND THUS, APPLICATION OF NP RATE OF 12% WAS CONFIRMED. 4. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF T HE VIEW APPLICATION OF PROFIT RATE OF 12% IS ON EXCESSIVE S IDE IN BOTH THE ASSESSMENT YEARS. DURING THE COURSE OF ARGUMEN TS, LD. COUNSEL FOR THE ASSESSEE DID NOT CHALLENGE THE ORDE RS OF THE AUTHORITIES BELOW AS REGARDS REJECTION OF THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE INCOME TAX ACT. HE HAS, HOWEVER, SUBMITTED THAT THE APPLICATION OF NET PROFIT RATE OF 12% IS ON HIGHER SIDE CONSIDERING HISTORY O F THE ASSESSEE. HE HAS SUBMITTED THAT IN PRECEDING ASSES SMENT YEARS, THE ASSESSMENTS HAVE BEEN FRAMED BY THE ASSE SSING OFFICER ACCEPTING LESSER PROFIT RATE OF 3% IN ASSES SMENT YEAR 2003-04. IN ASSESSMENT YEAR 2004-05 IN EX-PARTE OR DER, 6.5% NP RATE WAS APPLIED AND ASSESSEE IS IN APPEAL IN HIGH COURT. IN ASSESSMENT YEAR 2005-06, ITAT CONFIRMED THE NP RATE DECLARED BY ASSESSEE AT 1.08% VIDE ORDER DATED 23.09.2009 IN ITA 140/2009. COPY OF THE ORDER IS P LACED ON RECORD. IN ASSESSMENT YEAR 2006-07, ITAT CONFIRMED APPLICATION OF NP RATE DECLARED BY ASSESSEE AT 1.20 % VIDE ORDER DATED 24.11.2011 IN ITA 1461/CHD/2010. IN 4 ASSESSMENT YEAR 2008-09, ASSESSEE DECLARED NP RATE OF 3.33% AND THE TRIBUNAL IN ITA 1233/2011 VIDE ORDER DATED 24.09.2012 DIRECTED THE ASSESSING OFFICER TO MAKE A DDITION BY APPLYING NET PROFIT RATE @ 6%. COPIES OF THE OR DERS ARE PLACED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE , THEREFORE, SUBMITTED THAT SINCE IDENTICAL ISSUE HAV E BEEN EXAMINED IN THE CASE OF THE ASSESSEE IN PRECEDING ASSESSMENT YEARS, THEREFORE, AT THE BEST, NP RATE @ 6% MAY BE APPLIED AS IS APPLIED IN ASSESSMENT YEAR 2008-09 BY THE TRIBUNAL. THE LD. DR DID NOT DISPUTE THE ABOVE ORDE RS OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE. 4(I) CONSIDERING THE FACTS OF THE CASE, WE ARE OF T HE VIEW IDENTICAL ISSUE HAVE BEEN CONSIDERED BY ITAT CHANDI GARH BENCH IN THE CASE OF THE ASSESSEE, IN PRECEDING ASS ESSMENT YEARS 2005-06, 2006-07 AND 2008-09. THE ASSESSING OFFICER HAS RECORDED SEVERAL REASONS FOR REJECTION OF THE B OOKS OF ACCOUNT IN THE ASSESSMENT YEARS WHICH HAVE NOT BEEN DISPUTED BY LD. COUNSEL FOR THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE DID NOT CHALLENGE REJECTION OF THE BOO KS OF ACCOUNT UNDER SECTION 145(3) OF THE ACT, THEREFORE, FINDINGS OF AUTHORITIES BELOW TO THAT EXTENT ARE CONFIRMED. 4(II) THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITT ED THAT IN ASSESSMENT YEAR 2009-10, ASSESSEE HAS DECLARED NP R ATE OF 3.5% AND IN ASSESSMENT YEAR 2010-11, ASSESSEE DECLA RED NP RATE OF 4.8% THEREFORE, CONSIDERING HISTORY OF THE ASSESSEE AS NOTED ABOVE, IN WHICH IN EARLIER YEARS NP RATE OF 1 2% WAS NOT APPROVED BY THE TRIBUNAL AND IN THE LAST YEAR F OR 5 ASSESSMENT YEAR 2008-09, THE TRIBUNAL VIDE ORDER DA TED 24.09.2012 DIRECTED THE ASSESSING OFFICER TO MAKE A DDITION ON ACCOUNT OF ESTIMATE OF PROFIT BY APPLYING NP RAT E OF 6%, WE ARE OF THE VIEW IN THE FACTS AND CIRCUMSTANCES O F THE CASE, FOLLOWING HISTORY OF THE ASSESSEE, IT WOULD B E REASONABLE AND APPROPRIATE TO DIRECT THE ASSESSING OFFICER TO APPLY NP RATE @ 6% AS AGAINST 12% ADOPTED BY THE AUTHORITIES BELOW. 5. IN THIS VIEW OF THE MATTER, WE MODIFY THE ORDERS OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO COMPUTE THE INCOME OF THE ASSESSEE BY APPLYING NET PROFIT RATE OF 6% AS AGAINST 12% AND COMPUTE THE INCOME OF THE ASSESSEE ACCORDINGLY IN BOTH THE ASSESSMENT YEARS U NDER APPEAL. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH DECEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD