Fastrack Builders And Fabricators (P) Ltd., Chandigarh V. ITO, Chandigarh

ITA 787/CHANDI/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51514 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Depreciation
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 787/CHD/2011 ASSESSMENT YEAR: 2007-08 FASTRACK BUILDERS & V ITO, WARD 1(3), FABRICATORS (P) LTD., CHANDIGARH. H.NO. 320, SECTOR 9, CHANDIGARH. PAN: AAACF-7147G (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SMT. JAISHREE SHARMA DATE OF HEARING : 26.09.2011 DATE OF PRONOUNCEMENT : 27.09.2011 ORDER PER MEHAR SINGH, AM THIS APPEAL IS AGAINST THE ORDER DATED 28.05.2011 P ASSED BY THE CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS OF THE CASE IN DISMISSING THE APPEAL AGAINST THE ORDER OF INCOME TAX OFFICER, WARD 1(3) CHANDIGARH. 2. THE LD. INCOME TAX OFFICER HAS DISALLOWED 40% OF THE EXPENSES WITHOUT CONSIDERING THE FACTS AND MERITS O F THE CASE AND BUSINESS OF THE ASSESSEE. 3. THE LD. INCOME TAX OFFICER HAS NOT CONSIDERED TH E NORMS OF NET PROFITS AS FIXED BY THE INCOME TAX DEPARTMENT ITSELF. 2 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN CIVIL CONSTRUCTION WORK. IT FILED ITS RETURN OF INCOME DECLARING NIL INCOME ON 29.11.20 07. NET PROFIT RATE OF (-) 0.52% WAS DECLARED. THE CASE WA S PICKED UP FOR SCRUTINY BY ISSUING A NOTICE U/S 143(2) OF THE INCO ME-TAX ACT,1961 ON 08.08.2008. A DETAILED QUESTIONNAIRE A LONGWITH NOTICE U/S 142(1) WAS SERVED UPON THE ASSESSEE, IN RESPONSE TO WHICH SHRI VIGYAN ARORA, CA APPEARED AND PRODUCED B OOKS OF ACCOUNT. IT WAS FOUND THAT BESIDES DEPRECIATION AM OUNTING TO RS.1,50,839/-, THE ASSESSEE HAD DEBITED EXPENSES TO THE TUNE OF RS.49,87,291/- TO THE PROFIT AND LOSS ACCOUNT AND D ECLARED NET PROFIT @ (-) 0.52%. THE ASSESSEE WAS ASKED TO PROD UCE THE ORIGINAL BILLS/VOUCHERS. IT WAS NOTICED THAT ASSES SEE WAS NOT HAVING PROPER RECORD OF PAYMENTS MADE IN ITS POSSES SION. IN THE ABSENCE OF PROPER BILLS/VOUCHERS TO VERIFY THE EXPE NSES, EXPENSES TO THE EXTENT OF 40%, WHICH AMOUNTED TO RS.17,27,392/- WERE DISALLOWED AND ADDED TO THE INC OME OF THE ASSESSEE. 4. BEFORE CIT(A), LD. COUNSEL FOR THE ASSESSEE CLAI MED THAT THE APPELLANT HAD 80% OF THE VOUCHERS AND WAS READY TO PRODUCE THE SAME. THE AO, WHO WAS PRESENT ON THAT DATE, WAS DI RECTED TO EXAMINE THE BOOKS OF ACCOUNT AND VOUCHERS BY 20.05. 2011 BUT THE APPELLANT NEVER PRODUCED THE BOOKS OF ACCOUNT/V OUCHERS BEFORE THE AO. HENCE, IT WAS EVIDENT THAT APPELLANT WAS NOT HAVING VOUCHERS AND WAS NOT MAINTAINING THE BOOKS O F ACCOUNT. SO, ADDITION TO THE EXTENT OF 40% OF THE EXPENSES M ADE BY THE AO WAS CONFIRMED. 3 5. A BARE PERUSAL OF THE FACTUAL MATRIX OF THE CASE REVEALS THAT THE ADHOC ADDITION MADE HAS BEEN UPHELD BY THE LD. CIT(A). THE CONTENTION OF THE ASSESSEE WAS THAT VOUCHERS COULD NOT BE TRACED AT THE SITE OF CONSTRUCTION WHICH WAS IN UN-ORGANIZ ED STATE. HAVING REGARD TO THE FACTUAL MATRIX OF THE CASE AND TO MEET THE ENDS OF JUSTICE, THE ADDITION TO THE EXTENT OF 20% IS UPHELD. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS PARTLY A LLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER,2011. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH SEPT.,2011 POONAM COPY TO: 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH