The Deputy Commissioner of Income Tax, Jammu V. Sh. Rasvinder Singh, Jammu

ITA 70/ASR/2013

• Counselvise Citation: 7020914 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAAD KIDWAI
• Assessee Lawyers: P N ARORA
• Keywords: Assessment record
• Section: 133(6); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.70(ASR)/2013 ASSESSMENT YEAR:2008-09 PAN :AYHPS7091L DY. COMMISSIONER OF INCOME TAX, VS. SH. RASVINDER S INGH, CIRCLE-1, JAMMU. H.NO.3, SEC.7, NANAK NAGAR, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SAAD KIDWAI, DR RESPONDENT BY:SH. P.N.ARORA, ADVOCATE DATE OF HEARING:07/08/2014 DATE OF PRONOUNCEMENT:25/08/2014 ORDER PER B.P.JAIN, AM ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), JAMMU DATED 22.11.2012 FOR THE ASSESSMENT YEAR 2008 -09.THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF N ET PROFIT RATE APPLIED WHEN THE EX-PARTE ASSESSMENT WAS MADE AS TH E ASSESSEE HAD FAILED TO FILE COPY OF AUDIT REPORT, REPLY TO T HE QUESTIONNAIRE AND PRODUCE COMPLETE BOOKS OF ACCOUNT , BILLS AND VOUCHERS. ITA NO.70(ASR)/2013 2 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF N ET PROFIT RATE APPLIED WHEN THE EX-PARTE ASSESSMENT WAS MADE ON TH E BASIS OF MATERIAL EVIDENCE AVAILABLE ON RECORD AND INQUIRIES MADE. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN NOT APPRECIATING THE FACT THAT THE RETURN OF INCOME FILED BY THE ASSESSEE IS A PAPERLESS RETURN AND NO P & L ACCOUNT & BALANCE SHEET WERE ENCLOSED WITH THE RETURN OF INCO ME FROM WHICH THE GROSS RECEIPTS SHOWN BY THE ASSESSEE CAN BE DETERMINED. ONLY TDS CERTIFICATES WERE ENCLOSED WIT H THE RETURN OF INCOME. 4. THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN THE PRESENT CASE WAS MADE UNDER SECTION 144 OF THE I.T. ACT, 1961. THE A O CALLED FOR THE COPY OF ACCOUNT FROM M/S. ERICSSON GURGAON AND ON PERUSAL O F THE SAID ACCOUNT, IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAD RECEIV ED PAYMENT OF RS.44,46,814/- AND THE AO APPLIED NET PROFIT RATE O F 12% ON THE SAID RECEIPTS ASSUMING THEM TO BE RECEIPTS FROM THE CONTRACT OF THE ASSESSEE IN VIEW OF THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH C OURT IN THE CASE OF PRABHAT KUMAR VS. CIT AND ADDITION OF RS.5,33,542/ - WAS MADE TO THE INCOME OF THE ASSESSEE. 2.1. THE AO FURTHER ON THE PERUSAL OF THE TDS CERTI FICATES AVAILABLE ON RECORD OF DIFFERENT PARTIES AS PER DETAILS BELOW WO RKED OUT THE TOTAL RECEIPTS ITA NO.70(ASR)/2013 3 AT RS.2,87,40,171/- AND APPLIED THE NET PROFIT RATE OF 12% AT RS.34,48,820/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. BEFORE THE LD. CIT(A), THE ASSESSEE MADE THE SUB MISSIONS WITH REGARD TO THE ADDITION OF RS.5,33,542/- THAT ON CALLING TH E INFORMATION FROM M/S. ERICSSON GURGAON, NO QUERY WAS RAISED FROM THE ASSE SSEE. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE SAID RECEIPTS, IN FA CT, HAVE WRONGLY BEEN MENTIONED AND THE RECEIPTS SIDE HAS ALREADY BEEN AC COUNTED FOR IN THE PROFIT & LOSS ACCOUNT, WHICH TANTAMOUNT TO DOUBLE TAXATION . WITH REGARD TO THE ADDITION OF RS.34,48,820/-, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE DETAILS WORKED OUT BY THE A O ARE WITH REGARD TO PURCHASES AND NOT SALES WHERE THE TAX HAS BEEN COLL ECTED AND FORM -27D IS ON RECORD AND NOT FORM -16A. IT WAS SUBMITTED BEFOR E THE LD. CIT(A) THAT THE SALES ARE TO THE TUNE OF RS.2,93,77,071/-, WHIC H INCLUDES SALES OF LIQUOR BUSINESS OF RS.36,01,644/- AND RECEIPTS FROM CONSTR UCTION BUSINESS OF RS.2,57,75,427/-. HE HAS ALSO RECONCILED THE PURCHA SE AS PER TAX COLLECTION CERTIFICATE WHICH HAS BEEN REFLECTED IN THE PURCHAS ES. 4. THE LD. CIT(A) DELETED THE ADDITION VIDE PARAS 4 .5 & 4.6 OF HIS ORDER AND THE RELEVANT FINDINGS IN THE SAID PARAS ARE REP RODUCED FOR THE SAKE OF CONVENIENCE: 4.5. THE AO HAS DETERMINED GROSS RECEIPT OF THE AS SESSEE AT RS.2,87,40,171/- AND APPLIED A RATE OF 12% TO ARRIV E AT THE TOTAL ITA NO.70(ASR)/2013 4 INCOME OF RS.34,48,820/-. THE ASESSEE SUBMITTED BE FORE ME THAT THE FIGURE OF GROSS RECEIPT DERIVED FROM TDS CERTIFICAT E AT RS.2,87,40,171/- COMPRISES OF RECEIPT FROM CONSTRUC TION AT RS.2,57,75,427/- AND RS.29,76,588/- FROM LIQUOR BUS INESS. IN FACT, THE AO HAS WRONGLY TAKEN THE AMOUNTS AT (PAGE-2 AT THE BOTTOM OF THE ASSESSMENT ORDER THAT THE AMOUNT RECEIPTS FROM M/S. FRIENDS TRADING CORPORATION AND ON PAGE-3 FROM SH. HARPAL SINGH DUT TA FOR RS.3,41,294/- AND RS.26,23,450/- RESPECTIVELY) AND ADDED TO THE TURNOVER. THIS IS IN REALITY THE PURCHASE OF THE AS SESSEE ON ACCOUNT OF LIQUOR BUSINESS. IF THIS AMOUNT IS REDUCED, THEN TH E GROSS RECEIPT FROM CONSTRUCTION COMES TO RS.2,57,75,427/- APPROX. THIS GROSS RECEIPT WAS SHOWN IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH THE RETURN. I FIND FORCE IN THE SUBMISSION OF THE ASSESSEE THAT PROFIT ESTIMATION BY THE AO ON THIS DECLARED AMOUNT WOULD AMOUNT TO DOUBLE TAXATION. I, THEREFORE, HOLD THAT ADDITION OF RS.34,48,820/- IS UNCALLED FOR AN HENCE DELETED. 4.6. WITH REGARD TO ADDITION OF RS.5,33,542/-, IT IS FOU ND THAT THE A.O. HAD CALLED FOR AN INFORMATION U/S 133(6) FROM M/S. ERICSON INDIA PVT. LTD; GURGAON. THE PROPRIETORSHIP CONCERN OF TH E APPELLANT M/S. RASIA CONSTRUCTION HAD RECEIVED THE PAYMENT TO THE TUNE OF RS.44,46,814/- AND THE AO HAD APPLIED A RATE OF 12% AND ARRIVED AT AN INCOME OF RS.5,33,542/-. THE A.O. COMPLETED THE BEST JUDGMENT ASSESSMENT U/S 144 ON THE GROUND THAT THE ASSESSEE DID NOT EXPLAIN AND RESPOND TO HIS NOTICE DURING THE ASSESSMENT PRO CEEDINGS. ON THE OTHER HAND, THE APPELLANT SUBMITTED THAT THE STATEM ENT WAS NOT PROVIDED TO THE APPELLANT FOR REBUTTAL, THE APPELLA NT HAS QUESTIONED THAT AO HIMSELF ARRIVED THAT THE AMOUNT RECEIVED FR OM M/S. ERICSON INDIA PVT. LTD. WAS RS.13,87,501+RS.18,05,592 + RS. 31.92,644/- THEN HOW HE ARRIVED AT THE RECEIPT FIGURE OF RS.44,46,81 4/-. THE APPELLANT HAS STATED THAT THE RECEIPT FROM M/S. ERICSON INDIA PVT. LTD. AMOUNTING TO RS.31,92,644/- IS THE PART OF TOTAL TU RNOVER DECLARED BY THE APPELLANT IN THE P & L ACCOUNT AMOUNT AT RS.2,5 7,75,427/-. I FIND FORCE AND LOGIC IN THE SUBMISSION OF THE APPELLANT. THE INTIMATION COLLECTED BY THE A.O. HAS NOT BEEN CONFRONTED THERE FORE, ANY INTERFERENCE OF ADDITION WRONGLY DRAWN ON THE BASIS OF SUCH INFORMATION CANNOT BE UPHELD. THUS, THE ADDITION OF RS.5,33,542/- IS DELETED. ITA NO.70(ASR)/2013 5 5. THE LD. DR, MR. SAAD KIDWAI, ARGUED THAT THERE IS A EX-PARTE ASSESSMENT MADE BY THE AO AND THE ASSESSEE HAD NOT PRODUCED BOOKS OF ACCOUNT AND AUDIT REPORT, BILLS AND VOUCHERS AND TH ERE WAS NO BALANCE SHEET AND PROFIT & LOSS ACCOUNT ATTACHED WITH THE RETURN OF INCOME BEING A PAPERLESS RETURN AND THERE WAS NO MATERIAL EVIDENCE AVAILABLE ON RECORD AND THE ASSESSMENT HAS BEEN MADE WITHOUT MAKING ANY INQ UIRY. 6. THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N.ARORA, ADVOCATE ON THE OTHER HAND ARGUED THAT EVEN BEING THE PAPERLESS RE TURN, ALL THE FIGURES OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT WERE FILLED IN THE RETURN OF INCOME, THOUGH THE PROFIT & LOSS AND BALANCE SHEET WERE ON RECORD AND IT IS NO-WHERE MENTIONED BY THE AO THAT THE RETURN DOES NOT CARRY BALANCE SHEET AND P & L ACCOUNT, WHICH IN FACT, WAS ON RECORD. HOWEVER, AS SESSEE HAD MADE THE SUBMISSIONS AND HAD RECONCILED THE VARIOUS ACCOUNT S AND THE AO WITHOUT CONSIDERING THE EXPENSES INCURRED BY THE ASSESSEE H AD TAKEN INTO ACCOUNT THE RECEIPT SIDE AND HAD APPLIED A NET PROFIT RATE. THI S AMOUNTS TO DOUBLE TAXATION SINCE THE ASSESSEE HAD ALREADY INCLUDED AL L THE RECEIPTS IN THE PROFIT & LOSS ACCOUNT AND NO DEFECT IN THE SAME HAS BEEN P OINTED OUT. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS REGARDS THE ADDITION OF RS.34,48,820/-, THE AO H AS TAKEN GROSS RECEIPTS AS PER CERTIFICATE AVAILABLE ON RECORD, WHICH IN FACT, HAS BEEN TREATED BY THE AO ITA NO.70(ASR)/2013 6 AS PER TDS CERTIFICATE. BUT IN FACT, THEY WERE CERT IFICATES IN FORM 27D FOR THE TAX COLLECTED AND MEANT FOR PURCHASES AND NOT FOR SALES. THIS IS THE PRIME MISTAKE WHICH HAS BEEN DONE BY THE AO WHILE FRAMIN G THE ASSESSMENT. AS PER TDS CERTIFICATES, THE TOTAL RECEIPTS FROM CONST RUCTION HAS BEEN SUBMITTED TO BE AT RS.2,57,75,427/- AND SALE OF LIQUOR BUSINE SS AT RS.36,01,644/-, TOTALING RECEIPTS TO RS.2,93,77,071/-, WHICH HAS BE EN REFLECTED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT IN THE PROFIT & LO SS ACCOUNT. THE AMOUNT OF RS.29,76,588/- HAS BEEN REFLECTED AS PURCHASES AGAI NST TAX COLLECTION CERTIFICATE IN FORM-27D HAS ALSO BEEN EXPLAINED BY THE ASSESSEE BEFORE THE LD. CIT(A). ALL THESE MATERIALS IN THE FORM OF TDS CERTIFICATE AS WELL AS FORM 27D AND PROFIT & LOSS ACCOUNT WERE AVAILABLE ON RECORD BEFORE THE A.O. THEREFORE, IT IS NOT CORRECT TO SAY THAT SUCH MATERIAL WAS NOT AVAILABLE BEFORE THE A.O. BUT THE AO CHOSE TO COLLECT THE FIG URES ONLY FROM FORM 27D, WHICH IS NOT CORRECT. ON PERUSAL OF THE PROFIT & LO SS ACCOUNT ON RECORD AT PB 59, THE GROSS RECEIPTS FROM CONSTRUCTION BUSINESS H AS BEEN DECLARED AT RS.2,57,75,427/- AND LIQUOR BUSINESS AT PB 42 HAS B EEN DECLARED AT RS.36,01,644/-. THE PURCHASES AGAINST LIQUOR BUSINE SS ARE RS.29,76,558/- AT PB-2 WHICH IS A MATTER OF RECORD. IF THE GROSS RECE IPTS FROM LIQUOR BUSINESS ARE REDUCED FROM THE TOTAL GROSS RECEIPTS THEN THE RECEIPT FROM CONSTRUCTION BUSINESS COMES AT RS.2,57,75,427/- AND THE ASSESSEE HAS ALREADY DECLARED THE ITA NO.70(ASR)/2013 7 NET PROFIT FROM THE LIQUOR BUSINESS AT RS.93,788/- AND FROM CONSTRUCTION BUSINESS AT RS.5,87,632/- AT PB 42 & 59. THEREFORE, THE ADDITION BY THE AO WILL TANTAMOUNT TO DOUBLE TAXATION, WHICH IN FACT I S NOT CALLED FOR. THEREFORE, IN THE FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO. 8. AS REGARDS THE SECOND ADDITION WITH REGARD TO AN AMOUNT OF RS.5,33,542/-, THE ASSESSMENT RECORD WAS CALLED FOR , WHICH WAS PERUSED AND RECONCILIATION OF THE ACCOUNTS WAS PLACED ON RECORD WITH M/S. ERICSON INDIA PVT. LTD; GURGAON, WHERE THE OPENING BALANCE OF RS. 14,25,263/- WAS ALSO TAKEN INTO CONSIDERATION BY THE AO, WHICH WAS MEANT IN FACT FOR THE PRECEDING YEAR. FEW ADJUSTMENTS WERE PART OF THE RE CONCILIATION, AS PER STATEMENT OF ACCOUNT OF M/S. ERICSON INDIA PVT. LTD . AND RECEIPTS AS PER TDS CERTIFICATE. WE FIND THAT THE RECEIPTS FROM M/S. E RICSON INDIA PVT. LTD. WERE OF RS.31,92,644/-, WHICH IN FACT HAD BEEN DECLARED BY THE ASSESSEE IN ITS TOTAL RECEIPTS FROM THE CONTRACT BUSINESS AS UNDER: THE TOTAL RECEIPT REFLECTED BY THE ASSESSEE FROM CONTRACT BUSINESS: AS PER THE TDS CERTIFICATES & P & L A/C 2,57,75, 427.00 AS PER DETAILS: M/S. ERICSON INDIA PVT LTD. RECEIPTS AS STATE ABOVE 31,93,094.00 M/S. RELIANCE TELECOM INFRA 7,30,511.00 M/S. HINDUSTAN CONSTRUCTION CO. 1,41,01,391.00 M/S. HINDUSTAN CONSTRUCTION CO. 77,50,431.00 2,57,75,427.00 ITA NO.70(ASR)/2013 8 THEREFORE, BY APPLYING A NET PROFIT RATE ON THE SA ID AMOUNT BY THE AO WILL TANTAMOUNT TO A DOUBLE TAXATION. THE ASSESSEE HAVIN G DECLARED RECEIPTS IN THE PROFIT & LOSS ACCOUNT CANNOT AGAIN BE A SUBJECT MAT TER OF TAXATION, WHICH THE AO HAS DONE AND THE LD. CIT(A) HAS RIGHTLY DELETE D THE SAID ADDITION. WE, THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE L D. CIT(A) IN THIS REGARD. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.70(ASR)/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH AUGUST, 2014. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25TH AUGUST, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. RASVINDER SINGH PROP. M/S. ERICSO N INDIA PVT. LTD. JAMMU. 2. THE DCIT, CIRCLE-1, JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR