DCIT, Jaipur V. M/S ZUBERI ENGINEERING CO., Jaipur

ITA 699/JPR/2012

• Counselvise Citation: 69923114 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: ANIL SHARMA
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAI NI) ITA NO. 699/JP/2012 ASSESSMENT YEAR : 2009-10 PAN: AAAFZ 2103 K THE DCIT VS. M/S. ZUBERI ENGINEERING COMPANY CIRCLE- 2 2835, JOGIYON KA TIBBA, JAIPUR PHUTTA KHURRA, JAIPUR (APPELLANT) (RESPONDENT) ITA NO. 647/JP/2012 ASSESSMENT YEAR : 2009-10 PAN: AAAFZ 2103 K M/S. ZUBERI ENGINEERING COMPANY VS. THE ACIT 2835, JOGIYON KA TIBBA, CIRCLE- 1 PHUTTA KHURRA, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI D.C. SHARMA ASSESSEE BY : SHRI ANIL SHARMA DATE OF HEARING: 13-01-2014 DATE OF PRONOUNCEMENT: 15-01-2014 ORDER PER HARI OM MARATHA, JM:- THESE ARE THE CROSS APPEALS PERTAINING TO ASSESSME NT YEAR 2009-10, HAVING BEEN FILED AGAINST THE ORDER OF THE LD. CIT( A) DATED 01-05-2012. 2.1 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 02-06-2011. HOWEVER, 2 THE ASSESSMENT ORDER WAS COMPLETED U/S 143(3) OF TH E INCOME TAX ACT, 1961 (THE ACT FOR SHORT) ON 09-12-2011 AT A TOTAL INCO ME OF RS. 5,88,25,860/-. THE ASSESSEE CHALLENGED THIS ASSESSMENT ORDER ON ME RITS AND THE LD. CIT(A) HAS GIVEN A PART RELIEF TO THE ASSESSEE. NOW BOTH T HE PARTIES ARE AGGRIEVED. 2.2 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N ITS APPEAL:-. .1 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN APPLYING THE NET PROFIT RATE OF 5.12% OF TOTAL CONTRACT RECEIPTS, CONSIDERING THE SAME TO BE AFTER ALLOWING DEPRECIATION , INTEREST AND PARTNERS REMUN ERATION AND THEREBY IN CONFIRMING THE ADDITION OF RS. 63,85,192 /-. 2. THEREFORE, IT IS PRAYED TO DELETE THE RELEVANT A DDITIONS MADE TO RETURNED INCOME. 2.3 THE REVENUE HAS RAISED THE SOLITARY GROUND AS U NDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) IS ERRED IN GRANTING FURTHER RELIEF BY ALLOWING DEPRECIATION, INTEREST TO BANK AND REMU NERATION TO PARTNER OUT OF NET INCOME ESTIMATED BY APPLYING NET PROFIT RATE OF 8% BY THE AO. 2.4 WE HAVE HEARD THE RIVAL SUBMISSIONS. IN FACT, A T THE VERY OUT SET OF HEARING OF THE APPEALS, IT WAS BROUGHT TO OUR NOTIC E THAT THE GROUND RAISED IN THE APPEAL OF THE REVENUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THIS VERY BENCH RENDERED IN ASSESSEE'S OW N CASE FOR THE ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. THE COPIES OF T HESE TRIBUNAL ORDERS ARE ANNEXED VIDE PAGES 41 TO 57 OF THE ASSESSEE'S PAPER BOOK. WE HAVE GONE THROUGH THE TRIBUNAL ORDERS. THE TRIBUNAL HAS CONFI RMED THE APPLICATION OF 3 NET PROFIT RATE AT 8%, FURTHER SUBJECT TO DEPRECIA TION, INTEREST TO BANK AND REMUNERATION PAID TO PARTNERS. THEREFORE, BY RESPEC TFULLY FOLLOWING THE VIEW OF THIS BENCH AND FOR THE SAKE OF CONSISTENCY WE HO LD A NET PROFIT RATE OF 8% FURTHER SUBJECT TO DEPRECIATION, INTEREST PAID TO P ARTNERS AND REMUNERATION PAID TO PARTNERS. THE LD. CIT(A) HAS TAKEN THE SAME VIEW, WHICH DESERVES TO BE CONFIRMED. BUT AFTER HOLDING AS ABOVE, THE LD. C IT(A) INSTEAD OF ESTIMATING THE NET PROFIT RATE BY APPLYING THE RATE OF 8% AND MAKING IT FURTHER SUBJECT TO DEPRECIATION, INTEREST AND REMUN ERATION PAID TO PARTNERS, HE HAS MADE CALCULATIONS AND AFTER TOTALING THE DEPREC IATION, INTEREST AND REMUNERATION PAID TO PARTNERS HE HAS REDUCED IT FRO M THE NET PROFIT AND HE HAS ARRIVED AT NET PROFIT RATE OF 5.12%. THERE IS N O DIFFERENCE IN THE QUANTIFICATION OF THE RELIEF TO THE ASSESSEE. HOWEV ER, THE OBJECTION OF THE ASSESSEE IS THAT CONSECUTIVELY IN ASSESSMENT YEARS AS DISCUSSED ABOVE, YEAR AFTER THE YEAR, A NET PROFIT RATE OF 8% FURTHER SUB JECT TO DEPRECIATION, INTEREST AND REMUNERATION PAID TO PARTNERS HAVE BEEN HELD TO BE JUSTIFIED IN ASSESSEE'S OWN CASE AND BY ADOPTING NET PROFIT RATE ONLY AND N OT MENTIONING FURTHER DEDUCTION ON ACCOUNT OF DEPRECIATION, INTEREST AND REMUNERATION PAID TO PARTNERS. IT IS LIKELY TO SET A WRONG PRECEDENT IN ASSESSEE'S OWN CASE WHICH MAY LEAD TO COMPLEXITIES SOMETIMES IN FUTURE. SINCE THERE IS NO DIFFERENCE BETWEEN THE FINDINGS OF THE LD. CIT(A) IN THIS YEAR VIS-A-VIS EARLIER ASSESSMENT YEARS. HOWEVER, THE OBJECTION OF THE AS SESSEE SEEMS TO BE 4 JUSTIFIED. THEREFORE, WE AMEND THE LATER PART OF TH E FINDINGS OF THE LD. CIT(A) WHERE HE ADOPTED THE NET PROFIT RATE OF 5.12% ON TO TAL CONTRACT RECEIPTS ALLOWING DEPRECIATION, INTEREST AND REMUNERATION PA ID TO PARTNERS. IN OUR CONSIDERED OPINION, THE LAW DEMANDS CONSISTENCY TO AVOID ANY FUTURE MISUNDERSTANDING AND TO KEEP THE FINDINGS IN THE SA ME MANNER WE HOLD THAT NET PROFIT RATE OF 8% FURTHER SUBJECT TO DEPRECIATI ON, INTEREST AND REMUNERATION PAID TO PARTNER COULD BE FINAL FINDING . ACCORDINGLY, WE HOLD AS ABOVE AND ALLOW THE APPEAL OF THE ASSESSEE TO THAT EXTENT. 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THAT OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-01-2014 SD/- SD/- (.N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMEBR JAIPUR DATED: 15 TH JAN 2014 *MISHRA COPY FORWARDED TO:- BY ORDER 1. THE ACIT, CIRCLE- 2, JAIPUR 2. M/S. ZUBERI ENGINEERING COMPANY, JAIPUR 3. THE LD. CIT(A) 4. THE DR 5. THE GUARD FILE (IT NO.699/JP/12) A.R., ITAT, J AIPUR 5 6 7