M/s. Shri Laxmi Narayan Constructions, Sangli V. Income-tax Officer,

ITA 776/PUN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1091 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 25-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR CHAWARE
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation; Corroborative evidences
• Section: 44AD; 142(1); 234B; 144

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 776 /PN/201 5 / ASSESSME NT YEAR : 20 09 - 1 0 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS, A/P WAGHAPUR, TAL. TASGAON, SANGLI. . / APPELLANT PAN: A A XFS5974N VS. THE INCOME TAX OFFICER , WARD 1 ( 1 ), SANGLI . / RESPONDENT / APPELLAN T BY : SHRI M.K. KULKARNI / RESPONDENT BY : SHRI ANIL KUMAR CHAWARE / DATE OF HEARING : 08 . 0 8 .201 6 / DATE OF PRONOUNCEMENT: 12 . 0 8 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FIL ED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 1&2 , KOLHAPUR DATED 0 4 . 0 2 .20 1 5 RELATING TO ASSESSMENT YEAR 20 09 - 1 0 AGAINST ORDER PASSED UNDER SECTION 1 4 4 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE EXPARTE ASSESSMENT COMPLETED BY A.O. UNDER S.144 OF THE ACT AND CONFIRMED BY LD. C I T(A) IS NOT JUSTIFIED. IT BE SET ASIDE WITH DIRECTIONS TO A.O. TO REFRAME THE ASSESSMENT DE NOVO I N ACCORDANCE WITH THE PROVISIONS OF TAX. ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 2 (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LAST OF THE NOTICE ISSUED UNDER S .142(1) AND SERVED ON 05 - 12 - 2011 TO COMPLY ON 08 - 12 - 2011 IS NO NOTICE IN THE EYE OF LAW SINCE NO PROPER OPPORTUNITY WA S GIVEN TO ASSESSEE EVEN THOUGH THE REPRESENTATIVE OF THE ASSESSEE ATTENDED BEFORE A.O. ON 07 - 12 - 2011. IN VIEW OF THIS THE EXPARTE ASSESSMENT UNDER S. 144 AND CONFIRMED BY C I T(A) IS NOT JUSTIFIED. IT BE SET ASIDE. (3) ON THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. C I T(A) WAS NOT JUSTIFIED IN ESTIMATING THE NET INCOME @10% OF TOTAL CONTRACT RECEIPTS OF RS.3,66,26,900/ - RESULTING INTO ADDITION OF RS.36,62,690/ - WITHOUT REJECTING THE BOOKS OF ACCOUNT REGULARLY MAINTAINED AND DULY AUDITED U/S 145(3) OF THE ACT. THE ESTIMATION BEING ILLEGAL AND WITHOUT JURISDICTION BE QUASHED AND SET ASIDE. (4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C I T(A) FAILED TO APPRECIATE THE WRITTEN SUBMISSIONS FILED BEFORE HIM DURING THE COURSE O F HEARING OF THE APPEAL RUNNING INTO 19 PAGES ON 07 - 11 - 2012 FOR WHICH THE APPEAL ORDER WAS PASSED ON 04 - 02 - 2015. THE LD. C I T(A) DID NOT DEAL WITH ALL THE POINTS CANVASSED BEFORE HIM. IN VIEW OF THIS THE APPEAL BE SET ASIDE AS THE SAME HAS NOT BEEN PROPERL Y DECIDED IN ACCORDANCE WITH THE PROVISIONS OF LAW. (5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEVY OF INTEREST U/S 234A, 234B AND 234C IS NOT JUSTIFIED. 3. THE ASSESSEE IS AGGRIEVED BY THE ORDERS OF AUTHORITIES BELOW IN ESTIMATING THE INCOME @ 10% OF TOTAL CONTRACT RECEIPTS OF RS.3,66,26,900/ - ESTIMATING THE INCOME @ 10% OF TOTAL CONTRACT RECEIPTS OF RS.3,66,26,900/ - RESULTING IN ADDITION OF RS.36,62,690/ - . 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4,51,850/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. THEREAFTER, THE ASSESSING OFFICER ISSUED VARIOUS NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT AND ALSO LETTER TO THE ASSESSEE ON DIFFERENT DATES, BUT THERE WAS TOTAL NON - COMPLIANCE BY THE ASSES SEE. IN RESPONSE TO THE NOTICE ISSUED FOR INITIATING PENAL PROCEEDINGS UNDER SECTION 271(1)(B) OF THE ACT ALSO, THE ASSESSEE SIMPLY STATED THAT DUE TO HEALTH PROBLEMS, HE WAS UNABLE TO ATTEND THE OFFICE ON DATES OF EARLIER HEARINGS. HOWEVER, NO COMPLIANC E THEREAFTER WAS ALSO MADE BY THE ASSESSEE TO THE NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT. THE ASSESSING OFFICER THUS, VIDE LETTER DATED 01.12.2011 SERVED ON 05.12.2011 BY RPAD ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 3 SPECIFICALLY STATED THAT THE OPPORTUNITY GIVEN ON 08.12.2011 WOULD BE TH E FINAL OPPORTUNITY AND FAILURE TO COMPLY WITH THE FINAL OPPORTUNITY GIVEN WOULD RESULT IN FINALIZATION OF ASSESSMENT PROCEEDINGS UNDER SECTION 144 OF THE ACT. THE ASSESSEE FAILED TO COMPLY WITH THE SAME AND THEREAFTER, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE ACT. THE ASSESSING OFFICER ON PERUSAL OF RETURN OF INCOME AND THE AUDITED REPORT FILED BY THE ASSESSEE NOTED THAT THE ASSESSEE WAS ENGAGED IN UNDERTAKING CONTRACT WORKS. DURING THE YEAR, THE ASSESSEE WAS AWARDED CONTR ACT WORK OF PWD DEPARTMENT AND BUILDING AND CONSTRUCTION DIVISION OF Z.P. SANGLI. THE TOTAL CONTRACT RECEIPTS DECLARED BY THE ASSESSEE WERE RS.3,66,26,900/ - , ON WHICH NET LOSS OF RS.2,76,782/ - WAS DECLARED . I N THE IMMEDIATELY PRECEDING YEAR , T HE TOTAL CO NTRACT RECEIPTS DISCLOSED WERE RS.1.72 CRORES, ON WHICH NET PROFIT OF RS.36,106/ - WAS DECLARED. THE ASSESSING OFFICER NOTED THAT THE MAJOR EXPENSES CLAIMED BY THE ASSESSEE FOR THE YEAR WERE ON ACCOUNT OF LABOUR PAYMENTS OF RS. 1.46 CRORES, MATERIAL PURCHAS E OF RS.1.28 CRORES, MACHINERY RENT OF RS.39.90 LAKHS, PETROL, DIESEL AND SPARE PARTS OF RS. 28.05 LAKHS, TOTALING RS.3.40 CRORES. THE ASSESSEE HAD NOT DECLARED ANY CLOSING STOCK OF MATERIAL PURCHASE SHOWN BY IT. FURTHER, THOUGH IN THE TAX AUDIT REPORT, I T WAS STATED THAT THE ASSESSEE HAD DEDUCTED TAX AT SOURCE AND PAID THE SAME TO THE GOVERNMENT ACCOUNT BUT NO SUCH DETAILS AND EVIDENCES WERE APPENDED. IN THE ABSENCE OF THE ASSESSEE HAVING PRODUCED THE BOOKS OF ACCOUNT, BILLS, VOUCHERS AND OTHER RELEVANT RECORDS IN RESPECT OF CONTRACT RECEIPTS, THE ASSESSING OFFICER FOUND IT REASONABLE TO ESTIMATE THE NET PROFIT AT 10% ON CONTRACT RECEIPTS SHOWN AT RS.3.66 CRORES. THE INCOME WORKS OUT TO RS. 36,62,690/ - AS AGAINST THE LOSS OF RS. 2,76,782/ - SHOWN BY THE ASS ESSEE AND THE SAME WAS ADDED AS INCOME OF THE ASSESSEE. ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 4 5. BEFORE THE CIT(A), THE FIRST ISSUE RAISED BY THE ASSESSEE WAS AGAINST THE EXPARTE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT. THE CIT(A) NOTED THAT THE ASSESSEE HAD FAILED TO COMPLY WIT H NOTICES ISSUED BY THE ASSESSING OFFICER AND HE HAD NO OTHER OPTION EXCEPT TO FINALIZE THE ASSESSMENT UNDER SECTION 144 OF THE ACT AND THE GROUND TAKEN BY THE ASSESSEE WAS THUS, REJECTED. THE SECOND PLEA RAISED BY THE ASSESSEE BEFORE THE CIT(A) WAS AGAIN ST THE ESTIMATION OF INCOME BY TAKING 10% OF CONTRACT RECEIPTS AS INCOME OF THE ASSESSEE. THE ASSESSEE CLAIMED THAT WHERE ITS BOOKS OF ACCOUNT WERE AUDITED AND AUDIT REPORT WAS ALSO SUBMITTED ALONG WITH RETURN OF INCOME AND SINCE ALL THE RECEIPTS WERE FRO M GOVERNMENT DEPARTMENT, NO ESTIMATION SHOULD HAVE BEEN DONE AND THE BOOK RESULTS SHOULD BE ACCEPTED. THE CIT(A) OBSERVED THAT THE ONUS WAS UPON THE ASSESSEE TO FURNISH THE DETAILS AND DOCUMENT IN SUPPORT OF INCOME AND EXPENDITURE SHOWN IN THE AUDITED ACC OUNTS. HOWEVER, NO SUCH DETAILS AND DOCUMENTS WERE FURNISHED IN SUPPORT OF VARIOUS EXPENSES CLAIMED BY THE ASSESSEE AGAINST THE CONTRACT RECEIPTS OF RS.3.66 CRORES. THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS IN THE HEARING ON 15.11.20 1 3 AND TH EREAFTER ASKED THE ITP TO FURNISH THE DETAILS OF LABOUR PAYMENTS, MATERIAL PURCHASED, MACHINERY RENT, PETROL, DIESEL AND THE DETAILS OF TDS MADE. THE ITP APPEARED SUBSEQUENTLY ON 13.02.2013, 27.02.2013 AND 07.02.2014, HOWEVER, NO DETAILS WERE FURNISHED BE FORE THE CIT(A) . THE CIT(A) THUS, HELD THAT THE ASSESSEE HAD FAILED TO PRODUCE ANY SUPPORTING EVIDENCE OF INCURRING ANY EXPENDITURE. THUS, THE ESTIMATION MADE BY THE ASSESSING OFFICER IN THIS REGARD WAS UPHELD BY THE CIT(A). 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER S OF AUTHORITIES BELOW. ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 5 7. THE FIRST OBJECTION RAISED BY THE ASSESSEE IS AGAINST THE EXPARTE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE ACT AND CONFIRMED BY THE CIT(A). THE SECOND OBJECTION RAISED BY THE A SSESSEE IS THAT WHERE THE NOTICE WAS SERVED ON 05.12.2011 TO COMPLY ON 08.12.2011, IT WAS NO NOTICE IN THE EYE OF LAW AND NO PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE. THE NEXT PLEA RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL IS AGAINST ESTIMATION OF NE T INCOME @ 10% OF TOTAL CONTRACT RECEIPTS OF RS.3.66 CRORES WITHOUT REJECTING BOOKS OF ACCOUNT WHICH WERE DULY AUDITED. ANOTHER PLEA RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS AGAINST THE ORDER OF CIT(A) IN FAILING TO APPRECIATE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FILED THE COPY OF SAID WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A), DURING THE COURSE OF HEARING. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ACCOUNTS MAINTAINED BY THE ASSESSEE WERE GENUINE AND WERE AUDITED BY THE CHARTERED ACCOUNTANT AND HENCE, THE RESULTS SHOWN BY THE ASSESSEE SHOULD HAVE BEEN ACCEPTED. 8. THE LEARNED DEPARTMEN TAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSEE HAD FAILED TO PRODUCE EVEN SINGLE DOCUMENTARY EVIDENCE IN RESPECT OF EXPENSES CLAIMED BY IT. IT WAS FURTHER POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT AS AGA INST THE TURNOVER OF RS.3.66 CRORES DURING THE YEAR, THE ASSESSEE HAS SHOWN LOSSES, WHEREAS AS AGAINST THE TURNOVER OF RS.1.72 CRORES IN ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAD DECLARED PROFIT OF RS.36 LAKHS. 9. ON PERUSAL OF RECORD AND ORDERS PASSED BY THE AUTHORITIES BELOW, THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST EXPARTE ASSESSMENT ORDER PASSED ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 6 BY THE ASSESSING OFFICER WHICH HAS BEEN CONFIRMED BY THE CIT(A) BY MAKING ESTIMATION OF INCOME @ 10% OF THE TOTAL CONTRACT RECEIPTS. THE ASSESSEE WAS A CIVIL CONTRACTOR AND WAS CARRYING ON THE CONTRACT WORK OF PWD DEPARTMENT AND BUILDING AND CONSTRUCTION DIVISION OF Z.P. SANGLI. FOR THE YEAR UNDER CONSIDERATION, THE TOTAL CONTRACT RECEIPTS OF RS.3.66 CRORES WERE SHOWN BY THE ASSESSEE, ON WHICH THE ASSESSEE DECLARED NET LOSS OF RS.2,76,782/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS AS PER AUDIT REPORT OF CHARTERED ACCOUNTANT AND AS PER THE AUDITED BALANCE SHEET AND PROFIT & LOSS ACCOUNT . THE ASSESSEE HAD CLAIMED EXPENSES TO THE EXTENT OF RS. 1.46 CRORES ON ACCOUNT OF LABOUR PAYMENTS, RS.1.28 CRORES ON ACCOUNT OF MATERIAL PURCHASE, ABOUT RS.38 LAKHS ON MACHINERY RENT AND PETROL, DIESEL & SPARE PARTS OF RS.28 LAKHS , ETC . THE TOTAL EXPENDITURE AS SUCH, WAS RS.3.40 CRORES. THE ASSESSEE CLAIMS TO HAVE DEDUCTED TAX AT SOURCE AFTER VARIOUS PAYMENTS, BUT NO DETAILS OR EVIDENCES IN THIS REGARD WERE APPENDED TO THE AUDIT REPORT. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AND ALSO ASKED THE ASSESSEE TO APPEAR ON VARIOUS DATES, WHICH WERE TOTALLY NON - COMPLIED BY THE ASSESSEE. IN THE ABSENCE OF THE SAME AND WHERE THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT, THE BILLS AND VOUCHERS IN SUPPORT, IN RESPECT OF CONTRACT RECEIPTS AND THE VARIOUS EXPENSES DEBITED, THE ASSESSING OF FICER ESTIMATED THE NET PROFIT @ 10% ON CONTRACT RECEIPTS SHOWN AT RS.3.66 CRORES. THE SAID ASSESSMENT PROCEEDINGS WERE COMPLETED AFTER GIVING SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY EXPARTE ASSESSMENT SHOULD NOT BE COMPLETED UNDER SECTION 144 OF THE ACT. 10. UNDER THE PROVISIONS OF SECTION 144 OF THE ACT, WHERE A PERSON FAILS TO MAKE A RETURN UNDER SECTION 139(1) OF THE ACT OR FAILS TO COMPLY WITH THE TERMS OF NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT OR 142(2A) OF THE ACT; OR HAVING ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 7 MADE A RET URN, FAILS TO COMPLY WITH ALL THE TERMS OF NOTICE ISSUED UNDER SECTION 143(2) OF THE ACT, THEN THE ASSESSING OFFICER AFTER TAKING INTO ACCOUNT ALL THE RELEVANT MATERIAL, SHALL, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, MAKE THE ASSESSMENT OF TOTAL INCOME OR LOSS TO THE BEST OF HIS JUDGMENT AND DETERMINE THE SUM PAYABLE BY THE ASSESSEE ON THE BASIS OF SUCH ASSESSMENT. IT IS PROVIDED THAT THE BEST JUDGMENT ASSESSMENT WOULD BE COMPLETED BY THE ASSESSING OFFICER AFTER SERVING A NOTICE CALLING UP ON THE ASSESSEE TO SHOW CAUSE AS TO WHY ASSESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF HIS JUDGMENT. IN THE FACTS OF THE PRESENT CASE, THE ASSESSING OFFICER HAS COMPLIED WITH ALL THE CONDITIONS LAID DOWN IN SECTION 144 OF THE ACT. THE ASSESSEE HA D FAI LED TO COMPLY WITH THE NOTICES ISSUED UNDER SECTION 143(2) AND 142(1) OF THE ACT. THE ASSESSING OFFICER HAD ALSO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE ASSESSMENT SHOULD NOT BE COMPLETED UNDER SECTION 144 OF THE ACT, TO WHICH ALSO, THE ASS ESSEE FAILED TO FURNISH THE INFORMATION. IN VIEW THEREOF, WHERE THE ASSESSEE HAS SHOWN TOTAL DISREGARD TO THE VARIOUS NOTICES ISSUED TO THE ASSESSEE AND ALSO TO THE SHOW CAUSE NOTICE ISSUED, T HEN THE ASSESSING OFFICER HAS THE POWER TO COMPLETE THE ASSESSM ENT TO THE BEST OF HIS JUDGMENT AND DETERMINE THE TAX PAYABLE BY THE ASSESSEE. IN THE PRESENT FACTS OF THE CASE, THE ASSESSING OFFICER ADOPTED THE CONTRACT RECEIPTS SHOWN BY THE ASSESSEE AS THE BASIS FOR COMPUTING THE INCOME OF ASSESSEE FOR THE RELEVANT A SSESSMENT YEAR AND ESTIMATED THE INCOME @ 10% OF CONTRACT RECEIPTS. THERE IS NO MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD AS TO EXERCISE OF POWER BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE ACT. 11. NOW, COMING TO THE SECOND OBJECTION OF L EARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE CIT(A) HAS FAILED TO CONSIDER THE WRITTEN SUBMISSIONS FILED BEFORE HIM DURING THE COURSE OF HEARING BEFORE ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 8 DECIDING THE APPEAL. THE PERUSAL OF SAID WRITTEN SUBMISSIONS REVEAL THE ASSESSEE TO HAVE OBJECTED TO THE OBSERVATIONS OF ASSESSING OFFICER THAT AS THE LIMITATION OF TIME FOR COMPLETING ASSESSMENT ACCORDING TO THE ASSESSEE, SUCH LIMITATION OF TIME FOR COMPLETION OF ASSESSMENT CANNOT BE JUSTIFICATION FOR COMPLETING ASSESSMENT AGAINST THE ASSESSE E. THE SECOND PLEA RAISED BY THE ASSESSEE WAS AGAINST THE EXPARTE ASSESSMENT BEING ARBITRARY ASSESSMENT MADE BY THE ASSESSING OFFICER AND THAT HE HAS FAILED TO MAKE A RATIONALE ESTIMATE. ANOTHER POINT RAISED BY THE ASSESSEE WAS THAT THE EXPARTE ASSESSMEN T WAS INVALID AS NO SHOW CAUSE NOTICE WAS SERVED AS PER PROVISO TO SECTION 144(1) OF THE ACT. IN THIS REGARD, THE ASSESSEE HAS REFERRED TO VARIOUS DECISIONS. THE PLEA OF THE ASSESSEE WAS THAT IN THE ABSENCE OF ANY OPPORTUNITY BEING GIVEN TO THE ASSESSEE BY THE ASSESSING OFFICER BEFORE PASSING OF EXPARTE ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT, THEN IT WAS OPPOSED TO FUNDAMENTAL PRINCIPLES OF NATURAL JUSTICE AND THEREFORE, SUCH ASSESSMENT WAS NOT SUSTAINABLE ON LAW. THE NEXT OBJECTION RAISED BY THE ASSESSEE WAS THAT WHERE THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT, NO ADDITION CAN BE SUSTAINED IN THE HANDS OF ASSESSEE. IN THIS REGARD ALSO, RELIANCE WAS PLACED ON SERIES OF DECIS IONS . THE ASSESSEE FURTHER CLAIMS THAT WHERE ALL ITS RECEIPTS WERE SUBJECT TO TAX DEDUCTION AT SOURCE AND HENCE NO INTEREST UNDER SECTION 234B OF THE ACT COULD BE LEVIED. ONE ANOTHER ASPECT WHICH HAS BEEN REFERRED IN THE SAID WRITTEN SUBMISSIONS IS THE E STIMATION OF INCOME BY MAKING AN ENHANCEMENT OF RS. 2,76,782/ - ON THE BASIS OF TDS CERTIFICATE FILED. 12. THE ALLEGATION OF THE ASSESSEE BY WAY OF WRITTEN SUBMISSIONS BEFORE THE CIT(A) ARE UN FOUNDED . FIRST OF ALL, THE SANCTITY OF COMPLETING THE ASSESSME NT WITHIN PERIOD OF LIMITATION HAS TO BE ADHERED TO. THE ASSESSING OFFICER IS ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 9 STATUTORILY REQUIRED TO COMPLETE THE ASSESSMENT WITHIN A PERIOD OF LIMITATION AND IN THE ABSENCE OF THE SAME, THE ASSESSMENT ORDER SO PASSED WOULD SUFFER FROM LACUNAE. THE SECO ND PLANK OF OBJECTIONS OF ASSESSEE WAS THAT THE EXPARTE ASSESSMENT ORDER WAS PASSED WITHOUT ANY SHOW CAUSE NOTICE , IS WITHOUT ANY BASIS. IN THE PARAS HEREINABOVE, REFERENCE HAS BEEN MADE TO SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER ON 01.12.2011, WHEREIN THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN AS TO WHY THE PROCEEDINGS SHOULD NOT BE COMPLETED UNDER SECTION 144 OF THE ACT. IN THE ABSENCE OF THE ASSESSEE HAVING APPEARED BEFORE THE ASSESSING OFFICER AND HAVING PRODUCED ANY DETAILS AND / OR BOOKS OF A CCOUNT OR VOUCHERS, THE ASSESSING OFFICER HAD COMPLIED WITH THE PROVISIONS OF THE ACT BY GIVING THE SAID SHOW CAUSE NOTICE AND HENCE, THE EXPARTE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT IS VALID. THE FACTS BEFORE THE COURTS IN THE CASES RELIE D UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ARE DIFFERENT AND HENCE, HAVE NO BEARING ON THE FACTS OF THE PRESENT CASE. IT IS NOT THE CASE OF ASSESSEE THAT VARIOUS NOTICES ISSUED BY THE ASSESSING OFFICER HAVE NOT BEEN SERVED UPON THE A SSESSEE. ANOTHER POINT RAISED BY THE ASSESSEE IS AGAINST THE ORDER OF ASSESSING OFFICER IN NOT REJECTING THE BOOKS OF ACCOUNT AND IN MAKING ESTIMATION OF INCOME IN THE HANDS OF ASSESSEE. FIRST OF ALL, THOUGH THE ASSESSEE CLAIMS THAT ITS RESULTS SHOWN IN THE PROFIT & LOSS ACCOUNT ARE BACKED BY BOOKS OF ACCOUNT AND THE ACCOUNTS ARE ALSO AUDITED, HOWEVER, THE ASSESSEE FAILED TO PRODUCE ANY BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER TIME AND AGAIN ASKED THE ASSESSEE TO PROVE THE GEN UINENESS OF EXPENDITURE CLAIMED UNDER VARIOUS HEADS AND THE ASSESSEE FAILED TO PRODUCE BILLS, VOUCHERS, ETC. IN THIS REGARD. WHERE THE ASSESSEE HAS NOT EVEN PRODUCED THE BOOKS OF ACCOUNT, IT CAN BE PRESUMED THAT THE SAID BOOKS OF ACCOUNT ARE NOT AVAILABLE WITH THE ASSESSEE, HENCE THE ASSESSING OFFICER HAD NO ALTERNATIVE, BUT TO ESTIMATE THE ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 10 INCOME IN THE HANDS OF ASSESSEE ON THE BASIS OF CONTRACT RECEIPTS EARNED BY THE ASSESSEE, AS REFLECTED IN THE TDS CERTIFICATE FILED WITH RETURN OF INCOME. WHERE THE AS SESSEE HAD PRODUCED THE BOOKS OF ACCOUNT AND THERE WERE CERTAIN DEFECTS NOTED BY THE ASSESSING OFFICER IN THOSE BOOKS OF ACCOUNT, THEN IN SUCH CIRCUMSTANCES, THERE IS MERIT IN THE PLEA OF ASSESSEE THAT THE BOOKS OF ACCOUNT NEED TO BE REJECTED BEFORE MAKING ANY ESTIMATION OF INCOME IN THE HANDS OF ASSESSEE. HOWEVER, IN THE PRESENT CASE, THE ASSESSEE HAS FAILED TO PRODUCE BOOKS OF ACCOUNT AND HENCE, THERE IS NO MERIT IN THE CLAIM OF ASSESSEE . IT MAY FURTHER BE NOTED THAT DURING THE APPELLATE PROCEEDINGS, TH E CIT(A) HAD ASKED THE ASSESSEE TO FURNISH THE DETAILS OF VARIOUS EXPENSES VIDE ORDER SHEET DATED 15.12.2013 AND T HE ITP SHRI S.V. DESHPANDE WAS ASKED TO FURNISH THE DETAILS, WHO APPEARED SUBSEQUENTLY ON 13.02.20013, 27.02.2013 AND 07.02.2014 ALSO. HOWEVE R, NO DETAILS WERE FURNISHED BY HIM. EVEN BEFORE THE TRIBUNAL, THE ASSESSEE HAS FAILED TO EVEN FURNISH THE DETAILS IN RESPECT OF VARIOUS EXPENSES EXCEPT FOR RELYING ON THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A). THE REPEATED SUBMISSION OF THE LEARNE D AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE SAID WRITTEN SUBMISSIONS HAVE NOT BEEN CONSIDERED DURING ASSESSMENT PROCEEDINGS OR THE APPELLATE PROCEEDINGS IN ASSESSING THE INCOME IN THE HANDS OF ASSESSEE . WHERE THE ASSESSEE HAS ADMITTEDLY EARN ED THE CONTRACT RECEIPTS FROM THE GOVERNMENT AGENCIES AND HAS BOOKED VARIOUS EXPENSES AND HAS CLAIMED LOSS CAN ONLY BE VERIFIED BY THE ASSESSEE FURNISHING THE VARIOUS DETAILS AND PRODUCING THE NECESSARY DOCUMENTS, SUPPORTING EVIDENCE WITH REGARD THERETO. THE ASSESSEE HAS FAILED IN HIS DUTY OF EVEN FURNISHING THE BASIC DETAILS OF EXPENDITURE CLAIMED BY IT AND IN THE ABSENCE OF THE SAME, THERE IS NO MERIT IN THE SUBMISSIONS MADE BY THE ASSESSEE IN THIS REGARD AND DISMISSING THE SAME, THE ORDER OF CIT(A) IS U PHELD IN ESTIMATING THE INCOME IN THE HANDS OF ASSESSEE @ 10% OF CONTRACT RECEIPTS. UNDER SECTION ITA NO. 776 /PN/20 1 5 M/S. SHRI LAXMI NARAYAN CONSTRUCTIONS 11 44AD OF THE ACT, IN THE CASE OF CIVIL CONTRACTORS, THE STATUTORY ACT PROVIDES THAT THE INCOME HAS TO BE ESTIMATED @ 8% OF THE TOTAL TURNOVER OR GROSS RECEIPT S WHERE THE TOTAL RECEIPTS DO NOT EXCEED RS.40 LAKHS . T HE ESTIMATION OF INCOME @ 10% IN THE HANDS OF ASSESSEE ON THE GROSS RECEIPTS FOR THE YEAR IS FAIR AND REASONABLE, WHERE THE ASSESSEE HAS FAILED TO COMPLY WITH VARIOUS NOTICES ISSUED TO ESTABLISH ITS C ASE OF HAVING INCURRED LOSS FOR THE YEAR UNDER CONSIDERATION. ADMITTEDLY, THE GRO S S RECEIPTS ARE ABOVE RS.40 LAKHS. REJECTING THE SAME, VARIOUS GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. 1 3 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED ON THIS 12 TH DAY OF AUGUST , 201 6 . SD/ - SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 12 TH AUGUST , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - 1&2 , KOLHAPUR ; 4. / THE CIT - I / II, KOLHAPUR / CIT (CENTRAL), PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE