Dy. Commissioner of Income Tax, GONDA V. Shri Jitendra Singh, Basti

ITA 67/LKW/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2070 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 23-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.67/LKW/2015 ASSESSMENT YEAR 2010-11 SHRI JITENDRA SINGH, VILLAGE. MAHADEVA. POST PAGAR, BASTI 272 001 PAN BLOPS 5203 B VS DCIT, CIRCLE-GONDA (RESPONDENT) (APPELLANT) S HRI O.N. PATHAK , DR APPELLANT BY NONE RESPONDENT BY 21/09/2015 DATE OF HEARING 09/10/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT (A)-II, GONDA DATED 30.10.2014 FOR THE AY 2010-11. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THAT THE LD. CIT(A)-II LUCKNOW HAS ERRED IN LAW AND ON FACTS BY DIRECTING THE AO TO ESTIMATE THE NET PROFIT AT RS. 52,50,000/- AS AGAINST 8% APPLIED BY THE AO ON THE GROSS CONTRACT RECEIPTS OF RS. 16,63,63,696/- RELYING ON PAST HISTORY OF ASSES SCE'S OWN CASE IGNORING THE FACT HE HIMSELF HAS CONFIRMED THE STAN D OF THE AO FOR REJECTION OF BOOKS OF ACCOUNT IN TERMS OF PROVI SIONS OF SECTIONS 145(3) OF L.T. ACT AND THE AO HAD RIGHTLY ESTIMATED THE NET PROFIT @ 8% OF THE GROSS CONTRACT RECEIPTS. 2. THAT THE LD. CTT(A)-II. LUCKNOW HAS ERRED IN LAW AND ON FACTS WHILE COMPARING THE PAST HISTORY OF ASSESSEE'S CASE IGNORING THE 2 FACT THAT HE HAS ALSO INCLUDED THE BUSINESS RESULTS OF ASSESSEE DISCLOSED FOR THE YEAR UNDER CONSIDERATION PREPARED ON THE BASIS OF BOOKS OF ACCOUNT WHICH THE AO HAD REJECTED IN TE RMS OF PROVISIONS OF SECTION 145(3) OF L.T. ACT, & THE ACT ION OF THE A.O. HAS BEEN CONFIRMED BY LD. CIT(A) HENCE, BUSINESS RE SULTS PREPARED ON THE BASIS OF THESE BOOKS HAVE NO LEGS T O STAND. 3. THAT THE LD. C1T(A)-1L LUCKNOW HAS ERRED IN LAW AND ON FACT BY DIRECTING THE AO TO ESTIMATE THE NET PROFIT AT RS. 52,50,000/- RELYING ON THE PAST HISTORY OF ASSESSEE'S OWN CASE IGNORING THE FACT THAT THE FACTS OF THE PRESENT CASE ARE TOTALLY DIFFERENT FROM THE FACTS OF THE EASE IN PRECEDING ASSESSMENT YEARS AND ALSO PRINCIPLES OF RES-JUDICATA ARE NOT APPLICABLE UNDER L.T. ACT. 4. THAT THE APPELLANT ALSO CRAVES TO MODIFY, AMEND, CHANGE AND REVISE THE ABOVE GROUNDS OF APPEAL AND ADD FURTHER GROUNDS OF APPEAL, IF NECESSARY. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE, IN SPI TE OF NOTICE AND HENCE, WE PROCEED TO DECIDE THE APPEAL OF THE REVENUE EX-PART E QUA THE ASSESSEE. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 4. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR OF T HE REVENUE AND GONE THROUGH THE ORDERS OF THE LD. AUTHORITIES BELOW. WE FIND THAT THE ISSUE IN DISPUTE WAS DECIDED BY THE LD. CIT(A) BY MAKING FOLLOWING O BSERVATION ON PAGE 6 OF HIS ORDER: I HAVE EXAMINED THE WRITTEN SUBMISSION OF APPELLAN T AND FINDING GIVEN BY THE A.O. IN ASSESSMENT ORDER AND I (BUND MUCH FORCE IN THE ARGUMENT OF APPELLANT GIVEN IN WRITTEN SUBMISSIONS. THE A.O. DI D NOT MENTION ANY COMPARABLE CASE TO JUSTIFY THE APPLICATION OF N.P. RATE 8%. I HAVE ALSO FOUND THAT THE A.O. DID NOT CONSIDER THE PAST HISTO RY OF APPELLANT OWN CASE. I HAVE ALSO SEEN THAT IN PAST YEARS THE A.O. HAS MADE THE DISALLOWANCES AND FINAL ASSESSED INCOME RANGES 0.63 % TO 2.60%. IN PAST ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10 THE A.O . DID NOT APPLY THE N.P. RATE AND ONLY DISALLOWANCES WERE MADE OUT OF D IRECT & INDIRECT EXPENSES AND ASSESSED THE APPELLANT INCOME. THE FIN AL ASSESSED INCOME OF ALL THESE ASSESSMENT YEARS COMES TO 2.58%. 1.89% & 2.86% RESPECTIVELY AS MENTIONED ABOVE. HOWEVER LOOKING INTO THE NATURE OF BUSINESS OF 3 APPELLANT, POSITION OF BOOKS OF ACCOUNTS, BILLS & V OUCHERS WHICH WERE ADMITTEDLY NOT PRODUCED BEFORE A.O, DURING ASSESSME NT PROCEEDINGS AND PAST HISTORY OF APPELLANT OWN CASE , IT WOULD BE FA IR AND REASONABLE IF THE NET PROFIT IS TAKEN AND ASSESSED AT RS. 52,50,000/- INSTEAD OF TAKEN BY THE A.O. OF RS. 1,33,09,095/- . RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL DECISI ONS:- 'THE HOOKS OF ACCOUNT TOGETHER WITH PAST HISTORY OF THE CASE AS ALSO MATERIAL COLLECTED SHOULD BE CONSIDERED FOR ES TIMATION OF INCOME. RELIANCE IS PLACED IN THE CASE OF CIT V. GO TAN LIME KHANIJ UDYOG (2002) 256ITR 243 (GUJ-. IN THE CASE OF AJAY GOYAL V. I TO /2006/ 99TTJ (JD) 164, MADAN LAL V. ITO /2006/ 99 TTJ (JD) 538, CIT V. POPULAR E LECTRIC CO. PVT. LTD. [1993] 203 ITR 630 (CAT) AND M.A. RATIFY. CIT [I958] 33 ITR 843 (PAT) THE BENCHES OF THE TRIBUNAL ARE TA KING A CONSISTENT VIEW THAT THE PAST HISTORY IS THE BEST G UIDE WHERE THE PROVISIONS OF SECTION 145(3) ARE APPLIED. ' HENCE CONSIDERING THE FACTS & CIRCUMSTANCES MENTION ED ABOVE THE NET PROFIT OF APPELLANT IS ASSESSED AND CONFIRMED TO TH E EXTENT OF RS. 52,50,000/- AGAINST SHOWN BY THE APPELLANT OF RS. 4 9,75,238/-. THUS TO THE EXTENT OF RS.3,10,352/- ( RS. 52,50,000 -49,75,238) ADDITION MADE BY A.O. UNDER THIS HEAD IS HEREBY CONFIRMED AN D REST OF ADDITION IS LIABLE TO BE DELETED. THE A.O. IS DIRECTED TO DELET E THE ADDITION OF RS.80,59,095/-( RS.83.33,857-2,74,762) THUS THE APP ELLANT GETS RELIEF OF RS. 80,59,0957-. THIS GROUND IS PARTLY ALLOWED. 5. FROM THE ABOVE PARAS, FROM THE ORDER OF LD. CIT( A), IT IS SEEN THAT HE HAS REFERRED TO PAST HISTORY OF THE ASSESSEE FOR AYS 20 07-08, 2008-09 AND 2009-10 BUT THIS IS NOT COMING OUT AS TO WHETHER IN THOSE YEARS , BOOKS OF ACCOUNTS WERE PRODUCED BY THE ASSESSEE BEFORE THE AO OR NOT. WE A LSO FIND THAT IT IS ALSO OBSERVED BY THE LD. CIT(A) THAT THE AO DID NOT MENTION ANY C OMPARABLE CASE TO JUSTIFY THE APPLICATION OF NET PROFIT RATE 8% BUT LD. CIT(A) HA S ALSO NOT BROUGHT ON RECORD ANY COMPARABLE CASE WHILE DECIDING THAT ADOPTING NET PR OFIT AMOUNT OF RS.52.50 LAKH AS AGAINST FIGURE OF RS.1,33,09,095/- ADOPTED BY THE A O IS APPROPRIATE AND REASONABLE. 4 6. CONSIDERING ALL THESE FACTS AND IN VIEW OF THIS THAT ORDER OF LD. CIT(A) IS VERY CRYPTIC, WE FEEL IT PROPER THAT MATTER SHOULD GO BA CK TO HIS FILE FOR FRESH DECISION BY WAY OF A SPEAKING AND REASONED ORDER AND ACCORDINGL Y, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION AFTER PROVIDING REASONABLE OPPORTUNITIES OF BEING HEARD TO BOTH SID E. HE SHOULD PASS A WELL REASONED AND SPEAKING ORDER. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUNIL KUMAR YADAV) (A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 09/10/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR