Dy. CIT, Firozabad V. M/s Ram Pal Singh conractor, Firozabad

ITA 65/AGR/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6827 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 02-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C SHARMA
• Assessee Lawyers: RAJENDER SHARMA
• Section: 143(3); 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.65/AGR/2009 ASST. YEAR: 2005-06 DY. C.I.T., CIRCLE-5, VS. M/S. RAM PAL SINGH, C ONTRACTOR, FIROZABAD. VILL. BHENDI, POST BARA GAON, FIROZABAD. (PAN : AABFR 3781 N). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.C. SHARMA, JR. D.R. RESPONDENT BY : SHRI RAJENDER SHARMA, ADVOCATE ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FIELD BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 08.12.2008 BY TAKING THE FOLLOWING EFFECTIVE GROUND S OF APPEAL :- (1) THAT THE COMMISSIONER OF INCOME-TAX (APPEALS)- II, AGRA HAS ERRED IN LAW AND FACTS AND ON THE FACTS IN DIRECTING TO APPLY NE T PROFIT @ 6% AS AGAINST NET PROFIT RATE OF 8% APPLIED BY THE ASSESSING OFFICER BY TOTALLY IGNORING THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER IN PARA 3 OF THE ASSESSMENT ORDER. (2) THAT THE COMMISSIONER OF INCOME-TAX (APPEALS)-I I, AGRA HAS ERRED IN LAW AND ON FACTS IN DIRECTING THAT SEPARATE ADDITION ON THE BASIS OF BOOKS OF ACCOUNT CAN NOT BE MADE TO THE INCOME ESTIMATED AFTER REJEC TING THE BOOKS OF ACCOUNT UNDER SECTION 145. (3) THAT THE COMMISSIONER OF INCOME-TAX (APPEALS)-I I, AGRAS FINDING AS REGARD INTEREST ON FDRS IS ALSO AGAINST FINDINGS OF HONBLE KERALA HIGH COURT IN THE CASE K. RAVINDRANATHAN NAIR VS. DCIT/262, ITR 6 69 (KER.) AND URBAN STANILAUS COMPANY VS. CIT 263 ITR PAGE 10 AGAINST W HICH SLP OF THE ASSESSEE HAS BEEN DISMISSED BY HONBLE SUPREME COURT IN 263 ITR PAGE 3 (ST) AND 265 ITR 38 (ST) RESPECTIVELY. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. C ALCULATED THE ASSESSMENT AT RS.25,93,850/- UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 ( THE ACT HEREINAFTER) AGAINST THE RETURNED INCOME OF RS.8,90,548/- BY INVOKING THE PROVISIONS OF SECTION 145(3) AND ESTIMATING THE NET PROFIT OF THE ASSESSEE @ 8%. THE A.O. HAS ALSO MA DE THE DISALLOWANCES AFTER INVOKING THE PROVISIONS OF SECTION 145(3) AND MADE THE DISALLOWA NCE OF THE EXPENSES ALSO. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE ACTION OF THE A.O. REJECTING THE BOOKS OF ACCOUNTS UNDER SECTION 145(3) BUT HE REDUCED THE NE T PROFIT FROM 8% TO 6% ON THE BASIS OF THE BUSINESS RESULT OF THE ASSESSEE RELATING TO THE A.Y . 2004-05. THE CIT(A) ALSO NOTED THAT IN THE LAST YEAR THE ASSESSEE HAD A NET PROFIT @ 6.12% AND ACCORDINGLY DIRECTED THE A.O. TO APPLY THE N.P. AT THE RATE OF 6%. THE CIT(A) HAS ALSO DELETE D THE DISALLOWANCE WHICH WAS MADE OVER AND ABOVE THE ESTIMATION OF THE INCOME UNDER SECTION 14 5 HOLDING THAT ONCE THE BOOKS OF ACCOUNTS HAS BEEN REJECTED, NO FURTHER DISALLOWANCE CAN BE M ADE IN VIEW OF THE DECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. BANWARI LAL BANSH IDHAR, 229 ITR 229 (ALL.). 3. THE LD. D.R. BEFORE US RELIED ON THE ORDER OF TH E A.O. WHILE THE LD. A.R. RELIED ON THE ORDER OF THE CIT(A). 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSE THE MATERIAL ON RECORD ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT IN THIS CASE THE ASSESSEE IS NOT IN APPEAL AGAINST UPHOLDING THE ACTION OF THE A.O. BY CIT(A) REJECTING THE BOOKS OF ACCOUNTS UNDER SECTION 145 OF THE ACT.. THE QUESTION THEREF ORE REMAINS WHAT SHOULD BE THE PROFIT ON WHICH INCOME BE ASSESSED IN THE CASE OF THE ASSESSE E. THE A.O. HAD ESTIMATED THE PROFIT @ 8% BUT WHEN THE ASSESSEE WENT BEFORE THE CIT(A), THE C IT(A) SPECIFIED THAT IN THE PRECEDING A.Y. THE ASSESSEE DERIVED THE N.P. @ 6.12% AND THE SAME RATE HAS DULY BEEN ACCEPTED BY THE 3 DEPARTMENT. NO OTHER COMPARATIVE INSTANCE WAS BROU GHT TO OUR KNOWLEDGE. NO DOUBT, IN CASE THE BOOKS OF ACCOUNTS ARE REJECTED UNDER SECTION 14 5, THE ASSESSMENT HAS TO BE MADE IN THE MANNER AS SPECIFIED UNDER SECTION 144 I.E. ON THE B ASIS OF THE EVIDENCE AVAILABLE ON RECORD. THE IMMEDIATE PAST RESULT IN THE CASE OF THE ASSESSEE, IN OUR OPINION, IS THE BEST EVIDENCE WHICH IS AVAILABLE. IN VIEW OF THIS FACT, WE ARE OF THE VIE W THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER O F THE CIT(A) AND THE CIT(A) HAS CORRECTLY DIRECTED TH E A.O. TO APPLY N.P. AT THE RATE OF 6%. IN VIEW OF THIS FACT, WE UPHOLD THE ORDER OF THE CIT(A ). 5. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 24.06.2010). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 24 TH JUNE, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY