Jay Construction, Anand V. The Income tax Officer,Ward-1, Anand

ITA 72/AHD/2010

• Counselvise Citation: 7220514 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 08-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: B T THAKKAR
• Keywords: Gift; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND SHRI T. R. MEENA, AM) ITA NO.72/AHD/2010 A. Y.: 2005-06 JAY CONSTRUCTION, NR. SHIV VADI, BALKRISHNA SOCIETY, B/H C. P. COLLEGE, AMBIKA CHOWK, ANAND, 388 001 PA NO. AAEFJ 7695 Q VS THE INCOME TAX OFFICER, W-1, S. P. COMPLEX, MAYFAIR ROAD, ANAND 388 001 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B. T. THAKKAR, AR RESPONDENT BY SHRI SAMIR TEKRIWAL, SR. DR DATE OF HEARING: 07-03-2012 DATE OF PRONOUNCEMENT: 13-04-2012 O R D E R PER TEJ RAM MEENA: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-IV , BARODA DATED 27 TH OCTOBER, 2009 IN APPEAL NO. CIB/IV-A-48/07-08 , FOR ASSESSMENT YEAR 2005-06, CHALLENGING HIS ACCEPTANCE OF THE ORDER OF THE AO IN REJECTING THE AUDITED BOOKS OF ACCOUNTS OF THE ASSE SSEE AS WELL AS IN ACCEPTING THE ESTIMATION OF 10% GROSS PROFIT AS PRO FIT IN CONSTRUCTION SUB CONTRACT BUSINESS AND MAKING ADDITION OF RS.10, 14,202/-. 2. THE ASSESSEE IS CARRYING ON BUSINESS OF CIVIL C ONSTRUCTION ON SUB CONTRACT BASIS. IN THE YEAR UNDER CONSIDERATION , THE ASSESSEE HAS SHOWN A TOTAL CONTRACT RECEIPT OF RS.1.22 CRORES AG AINST CONTRACT WORK CARRIED OUT WITH THE FOLLOWING PARTIES: ITA NO.72/AHD/2010 (AY 2005-06): JAY CONSTRUCTION V S ITO, W-1, ANAND 2 I) NAGARJUNA CONSTRUCTION CO. RS.85,14,868/- II) SHRI SAI CONSTRUCTION RS.36,99,198/- THE NET PROFIT HAS BEEN SHOWN BY THE ASSESSEE AT RS .43,380/- AT THE RATE OF 0.355%. THE AO ESTIMATED THE NET PROFIT AT THE RATE OF 10% OF TOTAL SUB CONTRACT RECEIPT AFTER REJECTING THE BOOK RESULTS U/S 145(3) OF THE IT ACT AS THE ASSESSEE DID NOT MAINTAIN PROPER PURCHASE BILLS WHICH INCLUDED GIFT ARTICLES ALSO NOT RELATED TO CO NSTRUCTION WORK. NO SUPPORTING EVIDENCE FOR LABOUR CHARGES WAS ALSO FIL ED BEFORE THE AO. THE LEARNED CIT(A) AFTER COMPARISON OF VARIOUS CASE S CONFIRMED THE ADDITION AND APPLIED NET PROFIT RATE AT 10% AND TH E APPEAL WAS DISMISSED. 3. BEFORE US, THE LEARNED AR ARGUED THAT THE ASSESS EE IS A CONSTRUCTION SUB CONTRACTOR. NET PROFIT IS LOW. IT IS DIFFICULT TO GET BILLS OF LABOUR CHARGES AND NET PROFIT RATE APPLIED BY THE A O IS ON HIGHER SIDE IN CASE OF CONSTRUCTION SUB CONTRACT AND REQUESTED TO APPLY REASONABLE RATE IN THIS CASE; WHEREAS THE LEARNED D R CONTENDED THAT THE ASSESSEE DID NOT SUBMIT PROPER PURCHASE BILLS A ND SOME PURCHASES WERE FOUND TO BE UNVERIFIABLE. THEREFORE, CIT(A)S ORDER SHOULD BE CONFIRMED. 4. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND CONSIDERED THE RIVAL SUBMISSIONS. IT APPEARS THAT N ET PROFIT RATE IN CONSTRUCTION SUB CONTRACT WORK @ 10% IS ON HIGHER S IDE. THE ITA NO.72/AHD/2010 (AY 2005-06): JAY CONSTRUCTION V S ITO, W-1, ANAND 3 ASSESSEE ADMITTED BEFORE THE LEARNED CIT(A) NET PRO FIT RATE OF 4%. IT IS IN THE INTEREST OF JUSTICE THAT NET PROFIT RATE OF 6% IS REASONABLE IN THIS CASE. THE AO IS DIRECTED TO RECALCULATE THE IN COME OF THE ASSESSEE ON THE BASIS OF NET PROFIT RATE OF 6%. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-04-2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (T. R. MEENA) ACCOUNTANT MEMBER LAKSHMIKANT D LAKSHMIKANT D LAKSHMIKANT D LAKSHMIKANT DEKA/ EKA/ EKA/ EKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD