M/s. Aditya Traders, HANUMANGARH TOWN V. ITO, HANUMANGARH

ITA 651/JODH/2006

• Counselvise Citation: 65123314 RSA 2006
• Duration Of Justice: 7 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 14-12-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Depreciation
• Section: 234B

Judgement Text

IN TH E INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI , ACCOUNTANT MEMBER. ITA NO . 651 /J U /20 06 (A.Y. 200 4 - 05) M/S. ADITYA TRADERS, VS. THE ITO , WARD - 1, HANUMANGARH, HANUMANGARH. UDAIPUR . PAN NO. AAKFA 8602 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : S HRI SURESH OJHA DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 1 2 / 0 6 /201 4 . DATE OF PRONOUNCEMENT : 15 /0 7 /201 4 . O R D E R PER HARI OM MARATHA , J .M TH IS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER DATED 13 / 11/ 20 06 OF L D . CIT(A) , BIKANER. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THIS APPEAL: 1. THAT CIT(A) ERRED IN LAW & IN FACTS IN CONFIRMING AO'S REJECTION OF BOOKS UNDER SECTION 145(3), MORE SO, RECEIPTS WERE VERIFIABLE AND EXPENSES WERE SUPPORTED BY VOUCHERS 2 WHERE SELF MADE OR INDEPENDENT BILLS AS CONCERNED DEPARTMENTS MADE PAYMENTS AFTER VERI FYING EXECUTION OF RESPECTIVE WORK ON SITES. 2. THAT CIT(A) WAS NOT JUSTIFIED IN FACTS IN UPHOLDING APPLICATION OF NP RATE OF 10% SUBJECT TO DEPRECIATION & DEDUCTION OF SECTION 40(BUSINESS) ON TOTAL CONTRACT RECEIPTS OF RS. 10655342/ - 3. THAT CIT(A) WAS NOT JUSTIFIED IN NOT ALLOWING DEDUCTION FROM PROFIT DETERMINED BY APPLYING A NP RATE FOR INTEREST PAID ON BUSINESS LOANS FROM THIRD PARTIES. 4. THAT CHARGING OF INTEREST U/S 234B WAS AGAINST LAW AND FACTS. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE T HAT THE ASSESSEE IS A PARTNERSHIP FIRM DERIVING ITS INCOME FROM EXECUTION OF CONTRACT WORK UNDERTAKEN FROM GOVERNMENT DEPARTMENT. THE BOOKS OF ACCOUNT WERE REJECTED U/S 145(3) OF THE INCOME - TAX ACT, 1961 ['THE ACT', FOR SHORT] AND NET PROFIT RATE WAS APPL IED. THE TRIBUNAL HAS ALSO CONFIRMED THE APPLICATION OF PROVISIONS OF SECTION 145(3) OF THE A C T BUT THE ASSESSEE HAD CLAIMED INTEREST PAID TO THIRD PARTIES WHILE ESTIMATING PROFIT UNDER THIS SECTION. THIS ISSUE WAS STATED TO BE COVERED BY THE DECISION OF THIS VERY BENCH RENDERED IN THE CASE OF M/S GANESH GARHIA CONSTRUCTION CO. VS. ACIT FOR A.Y. 2004 - 05 IN ITA NO. 430/JODHPUR/2008 WHICH WAS ALSO CORRECTED/RECTIFIED VIDE MA NO. 04/JU/2013 VIDE ORDER DATED 02.05.2014. ACCORDINGLY, THE ORDER PASSED BY THE T RIBUNAL ON 31.12.2008 IN THIS CASE WAS RECALLED AND ONLY 3 TO THAT EXTENT THE APPEAL WAS HEARD. THE ISSUE OF PAYMENT OF INTEREST TO THIRD PARTIES BEING CLEARLY COVERED BY THE TRIBUNAL ORDER AND THEIR CONSISTENT VIEW, WE MODIFY THE ORDER ACCORDINGLY BY MAKIN G OBSERVATION THAT AFTER INVOKING PROVISIONS OF SECTION 145(3) OF THE ACT IN THIS CASE, INTEREST PAID TO THIRD PARTIES IS ALSO ALLOWABLE. ACCORDINGLY, RESULT OF THE APPEAL SHALL REMAIN SAME I.E. APPEAL SHALL BE PARTLY ALLOWED. 4 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ( ORDER PRONO UNCED IN THE COURT ON 15 TH JU LY , 201 4 ) . SD/ - SD/ - (N.K.SAINI) ( HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15 TH JULY , 201 4 . VL / COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR .