The Osho co-op L7&C society, Shop no. 2 Geeta market Panipat V. ITO ward 3, Panipat

ITA 668/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6652 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DLEHI BEFORE : SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO.668/DEL/2019 ASSESSMENT YEAR: 2015-16 THE OSHO CO-OP. L7 & C SOCIETY, VS. INCOME-TAX OFF ICER, SHOP NO.2, GEETA MARKET ROAD, WARD-3, PANIPAT. PANIPAT. PAN : AABAT6789R (APPELLANT) (RESPONDENT) APPELLANT BY : SH. K.C. ANEJA, I.T.P RESPONDENT BY: MS. RINKU SINGH, SR. DR. DATE OF HEARING : 04.02.2020 DATE OF PRONOUNCEMENT : 04.02.2020 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE, WHEREIN CORRECTNESS OF THE ORDER DATED 23.10.2018 OF CIT(A), KARNAL PERTAI NING TO 2015-16 ASSESSMENT YEAR IS ASSAILED ON THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE A.O. HAS WRONGLY & ARBITRARILY ESTIMATED THE INCOME AT RS.971 506/- BY APPLYING NET RATE OF 8% ON THE GROSS RECEIPTS WHICH IS WRONG & VER Y HIGH. 2. THAT THE APPELLANT IS A LABOUR & CONSTRUCTION SOC IETY ENGAGED IN COLLECTIVE DISPOSAL OF LABOUR OF THE MEMBERS AND LIAB LE TO DEDUCTIONS U/S. 80P(VI) OF THE INCOME TAX ACT, 1961 AND BY PROPER RE PRESENTATION COULD NOT CLAIM THE SAME AND BEING STATUTORY CLAIM IS LIA BLE TO BE GRANTED. 2. BOTH THE PARTIES HAVE BEEN HEARD. A PERUSAL OF T HE RECORD SHOWS THAT THE ASSESSEE IS SHOWN TO BE A CONTRACTOR ENGAGED IN THE WORK OF CIVIL CONSTRUCTION OF 2 HSAM BOARD, PANIPAT. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING NET PROFIT @ 0.61% AGAINST GROSS CONTRACT RECEIPTS OF RS.1,21, 43,829/- AND DECLARED NET PROFIT AT RS.74,950/- AND HAD CLAIMED A REFUND OF R S.2,42,877/- ON ACCOUNT OF TDS. THE ASSESSEE HAD DEBITED HUGE EXPENSES TO PROF IT & LOSS ACCOUNT ON ACCOUNT OF WAGES, MATERIAL PURCHASE, COMMISSION AND SALARY. FURTHER, THE ASSESSEE HAD ALSO SHOWN EXPENSES PAYABLE AT RS.31,9 8,000/- AS ON 31.03.2015. THE ASSESSEE HAD DEBITED EXPENSES AMOUNTING TO RS.8 8,86,905/- ON ACCOUNT OF PURCHASE OF MATERIAL. THE ASSESSEE HAD ALSO NOT SHO WN ANY WORK IN PROGRESS. AS PER BALANCE SHEET, THE ASSESSEE DID NOT SHOW ANY SU NDRY CREDITORS AS ON 31.03.2015 WHEREAS IN PARTY WISE DETAILS OF SUNDRY CREDITORS GIVEN BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT, IT HAS BE EN SHOWN AT RS.24,04,209/-. PERUSAL OF BANK ACCOUNT STATEMENT REVEALED THAT THE ASSESSEE HAD MADE THE PAYMENT OF ALL THE EXPENSES IN CASH. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE CASH BOOK, LEDGER, MUSTER ROLL, SALARY REGISTER, STOCK REGISTER BILL/VOUCHERS AND C OPY OF CONTRACTS EXECUTED WITH THE DEPARTMENTS BUT INSPITE OF PROVIDING AMPLE OPPO RTUNITIES, THE ASSESSEE DID NOT FURNISH /PRODUCE ANY INFORMATION AND PRODUCE TH E REQUISITE DOCUMENTS. PERUSAL OF STATEMENT OF FACTS SHOWS THAT THE ASSESS EE IS A LABOUR & CONSTRUCTION CO-OP. SOCIETY REGISTERED WITH THE REGISTRAR OF SOC IETIES VIDE REGISTRATION NO. 2146 DATED 10.08.2007 AND IS ENGAGED IN DOING COLLE CTIVE DISPOSAL OF LABOUR OF ITS MEMBERS CONTRIBUTE THEIR LABOUR & CARRY ON THE WORK OF CONSTRUCTION AGAINST TENDERS OR OTHER WORK. IN THE PROCEEDINGS BEFORE TH E ASSESSING OFFICER, THE ASSESSEE WAS HELD NOT TO BE ENTITLED TO CLAIM DEDUC TION U/S. 80P(2)(A)(VI) AND ADDITIONS IN TERMS OF PARA 4 & 5 OF THE ASSESSMENT ORDER WERE MADE. THE ADDITIONS WERE CHALLENGED BEFORE THE LD. CIT(A). HO WEVER, IT APPEARS THAT NO SPECIFIC GROUND FOR 80P DEDUCTION WAS RAISED AND TH E ASSESSEE HEAVILY CONTESTED 3 THE ADDITIONS ON THE GROUND THAT ACCOUNTS WERE AUDI TED. THE LD. CIT(A) REJECTED THE CLAIM OF ASSESSEE OBSERVING AS UNDER : FROM A PERUSAL OF THE ABOVE, IT IS CLEARLY SEEN THA T THE ASSESSEE DID NOT FURNISH THE DETAILS ASKED FOR BY THE A.O. AND EVEN A T THIS STAGE, BEYOND STATING THAT THE ACCOUNTS ARE AUDITED, NO CONCRETE E VIDENCE IN SUPPORT OF ITS CLAIMS HAVE BEEN SUBMITTED. IN VIEW OF THE ABOVE , THE ACTION OF THE A.O. IN REJECTING THE BOOKS OF ACCOUNTS WAS CORRECT AND I C ONFIRM THE SAID ADDITION. AS FAR AS THE SUBMISSION IN RESPECT OF ADD ITION U/S. 80P OF THE INCOME TAX ACT IS CONCERNED, NO GROUND OF APPEAL WAS FILED ON THIS ISSUE AND HENCE, DOES NOT CALL FOR A DECISION IN THIS REGARD . 3. PERUSAL OF THE IMPUGNED ORDER SHOWS THAT BEFORE THE LD. CIT(A), THE ASSESSEE FAILED TO ADDRESS ON THE ISSUE INVOLVED IN GROUND NO.2 REGARDING DEDUCTION UNDER SECTION 80P. THE ASSESSEE IS STATED TO HAVE BEEN IN THIS BUSINESS FOR 6 TO 7 YEARS. IT IS SEEN THAT IN ORDER TO ADJUD ICATE UPON GROUND NO. 2, PAST HISTORY OF THE ASSESSEE AND FACTS ON RECORD NEED TO BE TAKEN INTO CONSIDERATION. IN VIEW OF THE FACT THAT THERE IS NO FINDING OF THE LD. CIT(A) ON THIS ISSUE, IT WILL BE APPROPRIATE TO RESTORE THIS ISSUE BACK TO THE FILE OF LD. CIT(A). ON THE FIRST ISSUE, IT WAS SUBMITTED THAT PROFIT RATE OF 8% IS VERY HIGH A ND THE ESTIMATE AS CONSIDERED IN THE CASE OF SIMILAR LABOUR AND CONSTRUCTION SOCI ETY IN ITA NO. 7884/DEL/91 IN THE CASE OF THE KARNAL KOMI EKTA CO-OP. LABOUR & CO NSTRUCTION SOCIETY LTD. VS. ITO, WHEREIN THE ESTIMATE OF 2.5% IS CONCERNED TO B E JUSTIFIED, BE TAKEN INTO CONSIDERATION. COPY OF ORDER DATED 23.05.1997 WAS F ILED. SINCE, THERE IS NO COMPARISON AVAILABLE ON RECORD FOR THE ESTIMATE OF 8% RELIED UPON BY THE TAX AUTHORITIES AND THERE IS NO DISCUSSION ON THE PAST HISTORY, ACCORDINGLY, IT IS DEEMED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER FOR PROPER REPRESENTATION AND DISCUSSION ON THE ISSUES INVOLVED IN THIS APPEA L. IN VIEW THEREOF AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, THE IMPUGNED ORDER IS SET ASIDE TO THE FILE OF LD. 4 CIT(A) FOR DECIDING THE ISSUES BY WAY OF SPEAKING O RDER AND IN ACCORDANCE WITH LAW AFTER GIVING PROPER OPPORTUNITY OF HEARING TO T HE ASSESSEE. 4. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED: 04/02/2020 AKS