SINGHAL BUILDERS CONTRACTOR, Jaipur V. ACIT, BHARATPUR

ITA 800/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5110 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Rejection of books of accounts; Depreciation
• Section: 244A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH ,-MH-TSU]] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI A.D. JAIN, JM & SHRI VIKRAM SINGH YADA V, AM VK;DJ VIHY LA-@ ITA NO. 799/JP/15, 800/JP/15 & 36/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11, 2011-12 & 2012-13 M/S SINGHAL BUILDERS CONTRACTOR, A-98, RANJEET NAGAR, BHARATPUR. CUKE VS. THE JT. COMMISSIONER OF INCOME TAX, RANGE, BHARATPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAPFS 9809 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA, (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08.09.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 14/09/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THESE ARE THREE APPEALS FILED BY THE ASSESSEE AGA INST THE ORDER OF LD. CIT(A), ALWAR DATED 21.09.2015 FOR A.Y. 2010-11 & 2011-12 AND DATED 23.11.2015 FOR AY. 2012-13. ALL THESE APPEALS WERE HEARD TOGETHER AND HENCE DISPOSED OFF BY THIS CONSOLIDATED ORDER. THE ASSE SSEE HAS TAKEN FOLLOWING GROUNDS OF APPEALS: ITA NO. 799/JP/15 (1) THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE APPLICATION OF SEC. 145(3) OF THE AC T. THE PROVISION SO INVOKED AND CONFIRMED BY THE LD. CIT(A) BEING CONTR ARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME KINDLY BE QUASHED. CONS EQUENTLY THE LUMP SUM TRADING ADDITION OF RS. 3,00,000/- KINDLY BE DE LETED IN FULL. ITA NO. 799/JP/15, 800/JP/15 & 36/JP/16 M/S SINGHAL BUILDER CONTRACTOR, BHARATPUR VS. JCIT BHARATPUR 2 (2) THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN RESTRICTING THE TRADING ADDITION UPTO RS. 3,00,000/ - AS AGAINST GP RATE 10.50 % APPLIED BY THE AO. THE GP RATE SO APPLI ED AND ADDITION SO MADE BY THE AO AND TRADING ADDITION SO PARTLY SUSTA INED BY THE LD. CIT(A) IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FA CTS ON THE RECORD AND HENCE THE ADDITION KINDLY BE DELETED IN FULL. (3) THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B, 234C AND WITHDRAW INTERES T U/S 244A OF THE ACT. THE APPELLANT TOTALLY DENIES IT LIABILITY OF CHARGING OF ANY SUCH INTEREST. THE INTEREST SO CHARGED BEING CONTRARY T O THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. ITA NO. 800/JP/15 (1) THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE APPLICATION OF SEC. 145(3) OF THE AC T. THE PROVISION SO INVOKED AND CONFIRMED BY THE LD. CIT(A) BEING CONTR ARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME KINDLY BE QUASHED. CONS EQUENTLY THE LUMP SUM TRADING ADDITION OF RS. 5,54,405/- KINDLY BE DE LETED IN FULL. (1.2) THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN APPLYING THE GP RATE OF 10.5% AS AGAINST 10% DECLAR ED BY THE ASSESSEE AND 11% APPLIED BY THE AO. THE GP RATE SO APPLIED AND ADDITION SO MADE BY THE AO AND PARTLY SUSTAINED BY THE LD. CIT( A) IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AN D HENCE THE ADDITION KINDLY BE DELETED IN FULL. (2) THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN DISALLOWING LOSS ON SALE OF JEEP AMOUNTING TO RS. 49,492/-. THE DISALLOWANCE SO MADE AND CONFIRMED BEING TOTALLY CO NTRARY TO THE PROVISIONS OF LAW AND FACTS KINDLY BE DELETED IN FU LL. (3) THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B, 234C AND WITHDRAW INTERES T U/S 244A OF THE ACT. THE APPELLANT TOTALLY DENIES ITS LIABILITY O F CHARGING OF ANY SUCH INTEREST. THE INTEREST SO CHARGED BEING CONTRARY T O THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. ITA NO. 799/JP/15, 800/JP/15 & 36/JP/16 M/S SINGHAL BUILDER CONTRACTOR, BHARATPUR VS. JCIT BHARATPUR 3 ITA NO/ 36/JP/2016 (1) THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN CONFIRMING THE APPLICATION OF SEC. 145(3) OF THE AC T. THE PROVISION SO INVOKED AND CONFIRMED BY THE LD. CIT(A) BEING CONTR ARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME KINDLY BE QUASHED. CONS EQUENTLY THE LUMP SUM TRADING ADDITION OF RS. 8,34,653/- KINDLY BE DE LETED IN FULL. (2) THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN APPLYING THE GP RATE OF 10.5% AS AGAINST 10.02% DEC LARED BY THE ASSESEE AND 11% APPLIED BY THE AO. THE GP RATE SO APPLIED AND ADDITION SO MADE BY THE AO AND PARTLY SUSTAINED BY THE LD. CIT( A) IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AN D HENCE THE ADDITION KINDLY BE DELETED IN FULL. (3) THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING INTEREST U/S 234B. THE APPELLANT TOTALLY DENIES I T LIABILITY OF CHARGING OF ANY SUCH INTEREST. THE INTEREST SO CHARGED BEING C ONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN F ULL. 2. IN ALL THESE YEARS UNDER CONSIDERATION, THE BOOK S OF ACCOUNTS HAVE BEEN REJECTED BY THE AO INVOKING PROVISIONS OF SECTION 1 45(3) OF THE ACT AND THEREAFTER THE ESTIMATION OF INCOME HAS BEEN MADE. DURING THE COURSE OF HEARING, THE LD. AR HAS SUBMITTED THAT HE IS NOT P RESSING THE GROUND RELATING TO REJECTION OF BOOKS OF ACCOUNT IN ALL THESE YEARS. H ENCE THE GROUND RELATING TO REJECTION OF BOOKS OF ACCOUNTS IN ALL THESE YEARS A RE DISMISSED AS NOT PRESSED. 3. REGARDING ESTIMATION OF INCOME IS CONCERNED, THE LD . AR HAS SUBMITTED THAT THE MATTER IS DIRECTLY COVERED BY THE VARIOUS ORDERS OF THE ITAT STARTING FROM A.Y. 2003-04 AND ONWARDS IN THE SENSE THAT TH E NET PROFIT RATE DECLARED BY THE ASSESSEE IN THE RESPECTIVE YEARS WAS DISTURB ED BY THE AO. HOWEVER, THE SAME WAS ULTIMATELY ACCEPTED BY THE HONBLE ITAT AT THE SAME FIGURE OR WITH THE MINOR CORRECTIONS ONLY. THIS PROVES THAT THE R ESULTS BEING DECLARED BY THE ASSESSEE ARE ACCEPTABLE WHICH WAS HELD GOOD ALL THE SE YEARS AS WELL. THE LD.AR ITA NO. 799/JP/15, 800/JP/15 & 36/JP/16 M/S SINGHAL BUILDER CONTRACTOR, BHARATPUR VS. JCIT BHARATPUR 4 FURTHER DRAWN OUR REFERENCE TO THE COMPARATIVE FIGU RES OF N.P. RATE DECLARED BY THE ASSESSEE AND SUBSEQUENTLY UPHELD BY THE ITA T AS UNDER: COMPARATIVE N.P. CHART A.Y. GROSS RECEIPT RATE SHOWN RATE APPLIED BY AO RATE APPLIED BY CIT(A) RATE/ ADDITION UPHELD BY ITAT 2003-04 RS.12,16,67,035/- 9.09% 12.50% 12.50% 9.09% 2004-05 RS.15,98,62,600/- 8% 12.50% 11.20% 8% 2005-06 RS.9,26,20,823/- 10.00% 12.50% 11.20% 10% 2006-07 RS.15,38,39,155/- 10.69% 12.50% 11.27% 11% 2007-08 RS.9,19,57,822/- 11.40% - - >< 2008-09 RS.14,40,25,630/- 10.57% 12.50% 11.20% LUMPSUM ADDITION OF RS.2,50,000/- (10.74%) 2009-10 RS.21,75,96,791/- 10.06% 12.50% 11.10% 10.5 0% 2010-11 RS.8,67,81,555/- 10.50% 12.50% LUMPSUM ADDITION OF RS.3,00,000/- (10.85%) APPEAL PENDING 2011-12 RS.11,20,00,823/- 10.00% 11% 10.50% APPEAL PENDING 2012-13 RS. 17,38,91,471/- 10.02% 11% 10.5% APPEAL PENDING NOTE : NP RATE SHOWN IS BEFORE/SUBJECT TO INTEREST TO BANK, INTEREST TO THE PARTNERS AND DEPRECIATION ETC. AS PER CONSISTENT PRACTICE FO LLOWED BY BOTH PARTIES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. ON REVIEW OF THE ASSESSMENT ORDERS PASSE D BY THE AO, IT IS NOTED THAT THE AO HAS APPLIED THE NP RATE OF 12.5% IN A.Y . 2010-11 AND 11% IN A.Y. 2011-12 AND A.Y. 2012-13 RESPECTIVELY. HOWEVER, TH E BASIS OF ARRIVING AT SUCH ESTIMATION HAS BEEN STATED AS PAST HISTORY OF THE A SSESSEE. SIMILARLY, THE LD. ITA NO. 799/JP/15, 800/JP/15 & 36/JP/16 M/S SINGHAL BUILDER CONTRACTOR, BHARATPUR VS. JCIT BHARATPUR 5 CIT(A) HAS UPHELD A LUMP SUM ADDITION OF RS. 3,00,0 00/- IN A.Y. 2010-11 RESULTING IN NP RATE OF 10.85% AND FOR A.Y. 2011-12 AND A.Y. 2012-13, HE HAS APPLIED THE NP RATE OF 10.5% FOLLOWING THE ORDER OF THE COORDINATE BENCH FOR A.Y. 2009-10. WE HAVE GONE THROUGH THE ORDERS OF T HE COORDINATE BENCHES RIGHT FROM A.Y. 2003-04 ONWARDS TILL A.Y. 2009-10 A ND WHAT WE OBSERVED IS THAT THE COORDINATE BENCHES HAVE ACCEPTED THE NP RATE DE CLARED BY THE ASSESSEE IN THE RESPECTIVE YEARS EXCEPT FOR A.Y. 2008-09 AND 20 09-10. SO WHAT APPEARS IS THAT CONSISTENTLY EXCEPT FOR THE MINOR VARIATIONS IN THESE TWO YEARS, THE RESULT DECLARED BY THE ASSESSEE HAVE BEEN UPHELD BY THE CO ORDINATE BENCHES. IT IS A SETTLED POSITION IN LAW AS HELD BY THE RAJASTHAN HI GH COURT IN THE CASE OF CIT VS. GOTTON LIME KHANIJ UDHYOG 256 ITR 243 THAT MERE REJECTION OF BOOKS OF ACCOUNTS DID NOT NECESSARILY LEAD TO THE ADDITIONS TO THE RETURNED INCOME . IT WAS ALSO HELD IN THAT CASE THAT THE BOOKS OF ACCOUN TS TOGETHER WITH PAST HISTORY OF THE CASE AS ALSO MATERIAL COLLECTED BY THE AO SHOULD BE CONSIDERED FOR ESTIMATION OF INCOME. IN THE INSTANT CASE, THE RE IS NOTHING ON RECORD TO SUGGEST THAT THE AO HAS MADE A REASONED AND FAIR E STIMATION OF NP RATE FOR THE YEARS UNDER CONSIDERATION RATHER IT IS NOTED TH AT THE AO HIMSELF HAS FOLLOWED THE PAST HISTORY OF THE ASSESSEE WHEREIN C ONSISTENTLY RATE OF 12.5% WAS APPLIED BY THE AO IN ALL THOSE YEARS. AS WE HAV E STATED ABOVE, IN THE PAST, DECLARED RESULTS HAVE BEEN ACCEPTED BY THE COORDINA TE BENCHES IN ALL THOSE YEARS. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANC ES OF THE CASE, WE SEE NO REASON TO INTERFERE WITH THE DECLARED RESULTS AND T HE NP RATE AS DECLARED BY THE ASSESSEE FOR THE IMPUGNED YEARS UNDER CONSIDERATIO N. HENCE WE DELETE THE TRADING ADDITIONS MADE BY THE AO IN ALL THESE YEARS AND THE GROUND RELATING TO SUCH ADDITION ARE UPHELD. ITA NO. 799/JP/15, 800/JP/15 & 36/JP/16 M/S SINGHAL BUILDER CONTRACTOR, BHARATPUR VS. JCIT BHARATPUR 6 4. THE GROUNDS RELATING TO CHARGING OF INTEREST U/S 234A, 234B, 234C, 234DAND WITHDRAWAL OF INTEREST U/S 244AOF THE ACT A RE CONSEQUENTIAL IN NATURE WHICH REQUIRES NO ADJUDICATION HENCE THE SAME ARE D ISMISSED. 5. FURTHER IN A.Y. 2011-12 THE ASSESSEE HAS TAKEN A GROUND RELATING TO DISALLOWANCE OF LOSS ON SALE OF JEEP AMOUNTING TO RS.49,492/-. GIVEN THAT WE HAVE UPHELD THE N.P. RATE AS DECLARED BY THE ASSESS EE, THE AO IS DIRECTED TO VERIFY THE SAID CLAIM AS PER LAW. HENCE THIS GROUN D IS ALLOWED FOR STATISTICAL PURPOSES. WITH THE ABOVE DIRECTIONS ALL THESE APPEALS ARE DIS POSED OFF ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 14/0 9/2016. SD/- SD/- ( ,-MH-TSU ) ( FOE FLAG ;KNO ) ( A.D. JAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 14/09/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S SINGHAL BUILDER CONTRACTOR, BHAR ATPUR 2. IZR;FKHZ@ THE RESPONDENT- THE JCIT, BHARATPUR 3. VK;DJ VK;QDR@ CIT , ALWAR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-, ALWAR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.799/JP/2015, 800/JP/15 & 36/JP/1 6) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 799/JP/15, 800/JP/15 & 36/JP/16 M/S SINGHAL BUILDER CONTRACTOR, BHARATPUR VS. JCIT BHARATPUR 7