Smt. Harvinder Kaur, Ludhiana V. DCIT-CC-1, Ludhiana

ITA 81/CHANDI/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7987 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 11-05-2021
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Documents seized; Capital Gains
• Section: 132; 13; 153; 153C; 20

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH BEFORE: SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI R.L. NEGI, JUDICIAL MEMBER . / ITA NO.72/CHD/2021 / ASSESSMENT YEAR : 2015-16 SHRI HARVINDER SINGH, KOTHI NO.2, OPP. GURUNANAK PUBLIC SCHOOL, SARABHA NAGAR, LUDHIANA. THE D.C.I.T., CENTRAL CIRCLE-1, LUDHIANA. ./ PAN NO: CAVPS5256H /APPELLANT /RESPONDENT & . / ITA NOS.80 & 81/CHD/2021 / ASSESSMENT YEARS : 2015-16 & 2016-17 SMT. HARVINDER KAUR, KOTHI NO.2, OPP. GURUNANAK PUBLIC SCHOOL, SARABHA NAGAR, LUDHIANA. THE D.C.I.T., CENTRAL CIRCLE-1, LUDHIANA. ./ PAN NO: AFBPK5015M /APPELLANT /RESPONDENT ! ' /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADV. $ ' / REVENUE BY : SMT.C. CHANDRAKANTA, CIT DR ' !' /DATE OF HEARING : 01.07.2021 ' !' /DATE OF PRONOUNCEMENT: 27.08. 2021 (HEARING THROUGH WEBEX) /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THE ABOVE APPEALS HAVE BEEN PREFERRED BY TWO DIFFER ENT ASSESSEES AGAINST SEPARATE ORDERS OF THE COMMISSION ER OF ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 2 OF 15 INCOME TAX (APPEALS)-5, LUDHIANA DATED 08.04.2021, 08.04.2021 AND 09.04.2021 RELATING TO ASSESSMENT YE ARS 2015-16, 2015-16 AND 2016-17 RESPECTIVELY, PASSED U /S 250(6) OF THE OF THE INCOME TAX ACT, 1961 (HEREINAF TER REFERRED TO AS ACT). 2. IT WAS COMMON GROUND THAT THE ISSUE INVOLVED IN ALL THE ABOVE APPEALS WAS COMMON, THEREFORE, THEY WERE TAKE N UP TOGETHER FOR HEARING AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. WE SHALL FIRST BE DEALING WITH THE APPEAL OF SHRI HARVINDER SINGH IN ITA NO.72/CHD/2021 FOR ASSESSMEN T YEAR 2015-16. THE EFFECTIVE GROUNDS RAISED IN THIS APPEAL READ AS UNDER: 2. THAT THE CIT (A) HAS ERRED IN CONFIRMING THE AD DITION ON ACCOUNT OF THE UNDISCLOSED CAPITAL GAIN AMOUNTING T O RS.3,75,000/- WITHOUT ANY BASIS. 3. THAT THE LD. CIT (A) HAS FAILED TO APPRECIATE TH AT NO INCRIMINATE EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH RELATING TO THE PART ADDITIONS AS CONFIRMED BY THE WORTHY CIT(A). 4. THAT THE LD. CIT (A) HAS ERRED IN NOT CONSIDERIN G THE SALE AGREEMENT AS SEIZED AND HAS ERRED IN RELYING ONLY O N THE ORAL STATEMENT OF THE FAMILY MEMBER. 4. THE LD.COUNSEL FOR THE ASSESSEE STATED THAT HE W AS NOT PRESSING GROUND NO.3. THE SAME, THEREFORE, IS DISMI SSED AS NOT PRESSED. ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 3 OF 15 5. GROUND NOS.2 AND 4, IT WAS CONTENDED, RELATED TO THE ISSUE OF ADDITION MADE ON ACCOUNT OF UNDISCLOSED CA PITAL GAIN AMOUNTING TO RS.3,75,000/-. DRAWING OUR ATTENTION T O THE FACTS OF THE CASE, THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERAT ION U/S 132 OF THE ACT CARRIED OUT ON THE RESIDENTIAL PREMI SES OF SHRI SURINDER SINGH BINDRA, WHO WAS THE ASSESSEES BROTH ER, CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOU ND. ACCORDINGLY, PROCEEDINGS U/S 153C OF THE ACT WERE I NITIATED ON THE ASSESSEE AND ONE OF THE ADDITIONS MADE RELATED TO ALLEGED UNDISCLOSED CAPITAL GAIN ON THE SALE OF LAND AMOUNT ING TO RS.3,75,000/-. THE AO, IT WAS POINTED OUT, NOTED TH AT ONE OF THE DOCUMENTS SEIZED DURING SEARCH, BEING DOCUMENTS NOS.62 TO 86 OF ANNEXURE A-12, RELATED TO EXCHANGE OF OLD HOUSE NO.99-B, SOUTH MODEL GRAM, LUDHIANA WITH RESIDENTIA L PLOT MEASURING 326 SQ. YD. ADJOINING BOMBAY DYEING SHOWR OOM AT NATIONAL ROAD, LUDHIANA. THE AO NOTED THAT WHEN SHR I SURINDER SINGH BINDRA WAS CONFRONTED WITH THE SAID DOCUMENT, HE RECORDED HIS STATEMENT ON OATH DATED 20.11.2017 STATING THAT THE OLD HOUSE EXCHANGED, WA S CO- OWNED BY HIMSELF, HIS WIFE, HIS BROTHER ( THE ASSES SEE IN THE PRESENT CASE) AND HIS BROTHERS WIFE SMT.HARVINDER KAUR FOR A CONSIDERATION OF RS.83 LACS AND THE PURCHASE CONSID ERATION OF THE SAID PROPERTY WAS RS.48 LACS. THAT ALL THE DOCU MENTS ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 4 OF 15 RELATED TO THE TRANSACTIONS WERE DULY REGISTERED. T HE AO, HOWEVER, FOUND ON EXAMINATION OF THE SALE DEED OF T HE SAID PROPERTY THAT IT WAS NOT SOLD FOR RS.83 LACS BUT RA THER IT WAS SOLD FOR AN AMOUNT OF RS.68 LACS. HE, THEREFORE, DE RIVED FROM THE SAME THAT THE DIFFERENCE IN THE VALUE MUST HAVE BEEN TAKEN IN CASH. FURTHER NOTING THAT THE ASSESSEE HAD DISCLOSED CAPITAL GAINS TAKING THE SALE CONSIDERATION OF PROP ERTY AT RS.68 LACS,HE HELD THAT THE ASSESSEE HAD FAILED TO DISCLOSE THE EXCESS CAPITAL GAIN TO THE EXTENT OF RS.15 LACS ON THE IMPUGNED TRANSACTION AND BIFURCATING IT BETWEEN FOU R CO- OWNERS HE ADDED THE ASSESSEES SHARE MOUNTING TO RS.3,75,000/- TO THE INCOME RETURNED. THE SAME WAS UPHELD BY THE CIT(A). 6. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE STATED THAT THE ABOVE ADDITION WAS UNCALLED FOR AS THE AO HAD MEREL Y RELIED ON THE SUBMISSION GIVEN BY THIRD PARTY THAT TOO WIT HOUT MAKING ANY INDEPENDENT ENQUIRY OR CONFRONTING THE S AME TO THE ASSESSEE FOR REBUTTAL/CROSS EXAMINATION AND THA T NO DOCUMENTARY EVIDENCE WAS FOUND TO PROVE THAT THE PR OPERTY WAS SOLD FOR RS.83 LACS. HE CONTENDED THAT THE AO D ID NOT MAKE AN EFFORT TO CROSS-EXAMINE THE ACTUAL SALE PRI CE EITHER FROM THE ASSESSEE OR HIS FAMILY MEMBERS, NOR FROM T HE PERSONS WITH WHOM THE EXCHANGE TOOK PLACE. THE INFE RENCE OF THE AO THAT THE EXCESS MONEY OF RS.15 LACS WAS RECE IVED IN ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 5 OF 15 THE SAID TRANSACTION, WAS MERELY TO SUPPORT HIS CON CLUSION. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT IT I S SETTLED LAW THAT WHEN DOCUMENTARY EVIDENCE IS PITTED AGAINS T ORAL EVIDENCE THEN DOCUMENTARY EVIDENCE WOULD PREVAIL. H E RELIED UPON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT(CENTRAL), CALCUTTA VS. DAULAT RAM RAWATMULL (19 73) 87 ITR 349. HE FURTHER POINTED OUT THAT NO OTHER DOCUM ENTS WERE FOUND DURING SEARCH DISPUTING THE REGISTERED SALE D EED. HE, THEREFORE, CONTENDED THAT THE ADDITION MADE BY THE CIT(A) WAS WHOLLY UNJUSTIFIED. 7. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DER OF THE CIT(A) AS UNDER: THE FACTS OF THE CASE, BASIS OF ADDITION MADE BY T HE AO AND THE ARGUMENTS OF THE AR DURING THE COURSE OF APPELL ATE PROCEEDINGS HAVE BEEN CONSIDERED. THE AR HAS SUBMIT TED THAT THE ADDITION HAS BEEN MADE ONLY ON THE BASIS OF STA TEMENT RATHER THAN ON CONCLUSIVE EVIDENCE. IT IS FURTHER M ENTIONED THAT DURING THE SEARCH & SEIZURE, NO DOCUMENTARY EVIDENC E WAS FOUND WHICH MAY PROVE THAT THE ASSESSEE HAS SOLD TH E PROPERTY AT RS. 83 LACS AND RECEIVED THE DIFFERENCE PAYMENT OF RS. 20 LACS OVER AND ABOVE THE REGISTRY AMOUNT AND CONTENDED THAT THE ORIGINAL AGREEMENT WAS FOUND WITH REGARD T O THE ABOVE EXCHANGE OF PROPERTY AND FILED A COPY OF THE SAME. THE AR HAS ARGUED THAT THE ADMISSION OR CONFESSION MAY BE STRONG PIECE OF EVIDENCE BUT IT IS NOT CONCLUSIVE EVIDENCE AND VERACITY OF SUCH EVIDENCE CAN BE JUDGED VIZ A VIZ THE MATERI AL EVIDENCE AND OBTAINING CIRCUMSTANCES OF THE CASE. I T IS ALSO SUBMITTED THAT THE AO DID NOT MAKE ANY EFFORT TO CR OSS- EXAMINE THE ACTUAL SALE PRICE AND INFERENCE OF THE AO THAT THE ASSESSEE HAD RECEIVED EXCESS MONEY OF RS. 15 LACS W AS BASED ON SUSPICION AND SURMISES. HERE IT IS PERTINENT TO MEN TION THAT DURING THE POST SEARCH INVESTIGATION, THE RELE VANT DOCUMENT SEIZED AT PAGE NO. 62 TO 86 OF ANNEXURE A- 12, WERE CONFRONTED AND IN THE STATEMENT DATED 20.11.2017, I T WAS ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 6 OF 15 ADMITTED THAT THE PRICE OF PROPERTY SOLD WAS APPROX IMATELY RS. 83 LACS AND THE DIFFERENCE AMOUNT OF RS. 35 LAC S WAS RECEIVED FROM SH. IQBALJIT SINGH IN CASH IN AUGUST/SEPTEMBER, 2014. IT IS CLEAR FROM THE ABOVE THAT AT THE TIME OF RECORDING THE STATEMENT, WHEN THE DOCUMENTS WERE CONFRONTED, THERE WAS CLARITY OF FACTS AND THERE WA S NO CONFUSION REGARDING THE DOCUMENTS BEING CONFRONTED AND THE CONTENTS THEREOF. THE AMOUNT OF TOTAL SALE CONSIDER ATION AND THE AMOUNT OF DIFFERENCE ARE CLEARLY MENTIONED ALON G WITH THE MODE OF PAYMENT OF THE DIFFERENCE AMOUNT OF RS. 35 !ACS IN CASH. THE NAME OF THE PERSON AND THE MONTH IN WH ICH THE PAYMENT WERE RECEIVED ARE ALSO CLEARLY MENTIONED. T HUS, IT CANNOT BE SAID THAT THE STATEMENT WAS GIVEN UNDER A NY MISTAKEN BELIEVE OR CONFUSION ABOUT THE FACTS. THIS STATEMENT HAS NOT BEEN DENIED NOR IT HAS BEEN RETRACTED AT AN Y STAGE. THEREFORE, IT HAS TO BE BELIEVED AS SUCH TO BE TRUE . THE AO HAS RIGHTLY MENTIONED THAT IN SUCH TYPE OF PROPERTY TRANSACTION, THE DIFFERENCE IN CONSIDERATION IS TAK EN IN CASH. IN THE PRESENT CASE, IT IS CLEARLY ADMITTED THAT TH E DIFFERENCE AMOUNT OF RS. 35 LACS (RUPEES THIRTY FIVE LACS) WAS RECEIVED FROM SH. IQBAL JEET SINGH IN CASH. UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS. 3,75 ,000/- MADE BY THE AO IS FOUND SUSTAINABLE AND HENCE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES. WE FIND MERIT IN THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE. THE SOLE BASIS FOR MAKING THE ADDITION OF RS.3,75,000/- IN THE PR ESENT CASE TO THE CAPITAL GAIN RETURNED BY THE ASSESSEE ON SAL E OF PROPERTY JOINTLY OWNED WITH HIS BROTHER, SHRI SURIN DER SINGH BINDRA, AND BOTH THEIR RESPECTIVE SPOUSES, WE FIND, IS BASED ON THE STATEMENT RECORDED OF HIS BROTHER, WHO WAS T HE SEARCHED PERSON, WHEREIN HE STATED A HIGHER SALE CONSIDERATION OF RS.83 LACS HAVING BEEN RECEIVED AS OPPOSED TO RS. 68 LACS SALE CONSIDERATION BASIS WHICH THE SHAR E OF CAPITAL GAIN EARNED BY THE ASSESSEE WAS COMPUTED. BUT IT IS A FACT ON RECORD THAT THE ONLY DOCUMENTARY EVIDENCE AVAILABLE ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 7 OF 15 IN THE PRESENT CASE IS THE REGISTERED SALE DEED WHI CH RECORDS AND CONFIRMS THE SALE CONSIDERATION DECLARED BY TH E ASSESSEE OF RS.68 LACS. NO OTHER EVIDENCE WHATSOEVER CONTRA DICTING THE SALE CONSIDERATION MENTIONED IN THE REGISTERED SALE DEED HAS BEEN FOUND. FURTHER IT IS ALSO NOT DENIED THAT NO I NVESTIGATION, WITH REGARD TO THE DIFFERENCE IN THE SALE CONSIDERA TION AS STATED BY SHRI SURINDER SINGH BINDRA AND AS RECORDE D IN THE REGISTERED SALE DEED, WAS DONE BY THE AO. ON THE CO NTRARY, WE FIND, HE MERELY JUMPED ON THE ORAL STATEMENT OF SHR I SURINDER SINGH BINDRA TAKING IT TO BE A SOLEMN TRUTH MERELY BECAUSE IT WAS A STATEMENT RECORDED ON OATH, TOTALLY DISREGARD ING THE REGISTERED DOCUMENTARY EVIDENCE BEING THE SALE DEE D. A REGISTERED SALE DEED CANNOT BE SUMMARILY DISMISSED AS EVIDENCE WHEN JUXTAPOSED WITH THE ORAL STATEMENT AL ONE THAT TOO ONLY OF ONE OF THE PARTIES TO THE TRANSACTION E VEN WHEN MADE ON OATH. THE STATEMENT, TO CARRY WEIGHT AS EVI DENCE NEEDS TO BE SUPPORTED WITH OTHER EVIDENCES. THE STA TEMENT AT BEST RAISES A SUSPICION ABOUT THE CONSIDERATION EXC HANGED IN THE TRANSACTION WHICH SHOULD PROMPT FURTHER INQUIRI ES, BUT ORAL STATEMENT EVEN IF RECORDED ON OATH ALONE IS NOT SUFFICIENT TO CONTRADICT/DISPLACE A DULY REGISTERED DOCUMENTARY EVIDENCE. WE AGREE WITH THE LD.COUNSEL FOR THE ASSESSEE THAT THE CONCLUSION OF THE AO THAT THE EXC ESS CONSIDERATION WAS RECEIVED, WAS BASED ON MERE SURMI SES AND ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 8 OF 15 LACKED BEING BACKED BY ANY EVIDENCE DOCUMENTARY OR OTHERWISE OF ANY SORT. IN VIEW OF THE SAME, WE HOLD THAT THE APPROACH OF THE REVENUE AUTHORITIES IN TREATING THE ORAL STATEMENT OF THE SEARCHED PERSON AS SACROSANCT IN T OTAL DISREGARD TO THE REGISTERED DOCUMENTARY EVIDENCE A VAILABLE, IS NOT IN ACCORDANCE WITH LAW AND THE ADDITION MADE, T HEREFORE, BY HOLDING THAT THE SURPLUS CONSIDERATION WAS RECEI VED IN THE IMPUGNED TRANSACTION AMOUNTING TO RS.3,75,000/- IN THE HANDS OF THE ASSESSEE IS, THEREFORE, DIRECTED TO BE DELETED. GROUND OF APPEAL NOS. 2 AND 4 RAISED BY THE ASSESSE E ARE, THEREFORE, ALLOWED. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. WE NOW TAKE UP THE APPEAL OF SMT.HARVINDER KAUR IN ITA NO.80/CHD/2021 FOR ASSESSMENT YEAR 2015-16. 9. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE AS UNDER: 2. THAT THE LD. CIT (A) HAS ERRED IN CONFIRMING TH E APPLICATION OF RATE OF PROFIT @ 8% ON CONTRACT RECE IPTS AND IGNORING THE VOLUMINOUS EVIDENCE FILED DURING THE A PPELLATE PROCEEDINGS ABOUT THE APPLICATION OF NET PROFIT RAT E AT MUCH LESS PERCENTAGE. 3. THAT THE CIT (A) HAS ERRED IN CONFIRMING THE ADD ITION ON ACCOUNT OF THE UNDISCLOSED CAPITAL GAIN ON THE SALE OF HOUSE 99B AMOUNTING RS. 3,75,000/- WITHOUT ANY BASI S. 4. THAT THE CIT(A) HAS ERRED IN NOT CONSIDERING THE SALE AGREEMENT AS SEIZED AND HAS ERRED IN RELYING ONLY O N THE ORAL STATEMENT OF THE FAMILY MEMBER. ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 9 OF 15 5. THAT THE LD. C1T(A) HAS FAILED TO APPRECIATE THA T NO INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH RELATING TO THE PART ADDITIONS AS CONFIRMED BY THE WORTHY CIT(A). 10. GROUND NOS.2, IT WAS CONTENDED, RELATED TO ADDI TION MADE BY APPLYING GP RATE TO CONTRACT RECEIPTS OF TH E ASSESSEE. 11. THE FACTS RELATING TO THE CASE ARE THAT THE AO HAD MENTIONED THAT DURING THE COURSE OF SEARCH U/S 132, FIVE NOTEBOOKS/DIARIES (ANNEXURE A-L, A-2, A-3, A-5 & A- 5) WERE SEIZED FROM THE RESIDENCE OF SH. S. S. BINDRA, THE HUSBAND OF THE ASSESSEE. THE STATEMENT OF SHRI S. S. BINDRA WA S RECORDED ON 11.12.2017, WHICH IS REPRODUCED IN THE ASSESSMEN T ORDER, WHERE HE HAD STATED THAT THESE RELATED TO BUSINESS/PROFESSIONAL ACTIVITIES UNDERTAKEN BY SMT. HARVINDER KAUR (HIS WIFE), THE ASSESSEE. IT WAS FURTHER STATE D THAT SHE WAS TECHNICALLY QUALIFIED PERSON AND GOT VARIOUS CO MPONENT OF CIVIL CONSTRUCTION WORK DONE ON CONTRACT BASIS AND EARNED PROFIT @ 8 TO 9% OF THE RECEIPT. IT WAS ALSO STATED THAT THE SE PROFITS WERE NEVER DECLARED IN THE RETURN. THE AO T ABULATED THE VARIOUS PAYMENTS WITH REFERENCE TO THE ABOVE ME NTIONED ANNEXURE AND YEAR-WISE BIFURCATION WAS ALSO DONE. A S PER THE AO, THESE WERE CONFRONTED TO THE ASSESSEE AND ASKED WHY INCOME @25% OF THE TOTAL RECEIPTS SHOULD NOT BE EST IMATED. THE REPLY SUBMITTED IS REPRODUCED IN THE ASSESSMENT ORDER WHERE IT WAS REITERATED THAT THE DOCUMENTS WERE PAR T AND ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 10 OF 15 PARCEL OF CONSTRUCTION BUSINESS ACTIVITIES DONE BY HER AND THAT THESE ANNEXURES BELONGED TO HER. IT WAS CLAIMED THA T THE PROFIT ON THE SAME WAS ALREADY DECLARED IN THE INCO ME TAX RETURNS FOR THE ASSESSMENT YEARS 2015-16 TO 2018-19 AND HAD GIVEN YEAR-WISE AMOUNT IN THE TABLE. IT WAS FURTHER ARGUED BY THE ASSESSEE THAT THE PROPOSED PROFIT @25% WAS TOO EXCESSIVE AND PLEADED FOR APPLICATION OF 6% NET PROFIT, RELYI NG UPON VARIOUS CASE LAWS. THE REPLY WAS CONSIDERED BY THE AO BUT NOT FOUND ACCEPTABLE. THE AO OBSERVED THAT AFTER CONSID ERING VARIOUS JUDGMENTS AND THE STATEMENT OF SH. S. S. BI NDRA (RECORDED ON 11.12.2017} WHERE HE HIMSELF ADMITTED THAT THE ASSESSEE HAD EARNED PROFIT @8 TO 9 % ON SUCH CONTRA CT RECEIPTS, IT WAS FAIR & REASONABLE TO APPLY NET PR OFIT RATE OF 10%. THE AO CALCULATED TOTAL RECEIPTS FOR THE ASSES SMENT YEAR 2015-16 AT RS. 5,44,12,493/- AND NET PROFIT WAS EST IMATED AT RS. 54,41,249/- AND AFTER GIVING BENEFIT OF PROFIT OF RS.35,00,000/- DECLARED AS PER RETURN FILED U/S 153 C, THE AO MADE FURTHER ADDITION OF RS. 19,41,249/- (RS. 54,41 ,249 - RS. 35,00,000} FOR THE ASSESSMENT YEAR 2015-16. 12. THE LD.CIT(A) RESTRICTED THE ADDITION TO 8% N ET PROFIT RATE AS UNDER: THE FACTS OF THE CASE, BASIS OF ADDITION MADE BY T HE AO AND THE ARGUMENTS OF THE AR DURING THE COURSE OF APPELL ATE PROCEEDINGS HAVE BEEN CONSIDERED. THE AR HAS ARGUED THAT THE PROFIT ELEMENT ON THE TRANSACTIONS @ 10% TAKEN BY THE AO ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 11 OF 15 IS EXCESS AND CONTENDED THAT THE PROFIT MARGIN IN T HE CONSTRUCTION WORK RANGES FROM 4 TO 6 % AND THE ASSE SSEE HAS SHOWN INCOME @ 6% ON HIGHER SIDE. IT IS HOWEVER REL EVANT TO NOTE THAT AS PER THE OWN ADMISSION OF SH. SURINDER SINGH BINDRA, THE ASSESSEE HAS EARNED PROFIT @ 8 TO 9 % O F THE RECEIPT FROM THIS BUSINESS/ PROFESSION AND IT WAS A LSO STATED THAT AFTER CONSULTING SMT. HARVINDER KAUR, THE ASSE SSEE, IT WAS ADMITTED THAT THE CORRESPONDING PROFIT WAS NEVE R DECLARED FOR TAXATION IN THE RETURN FILED BEFORE SE ARCH. ON THE BASIS OF THE STATEMENT OF SH. SURINDER SINGH BINDRA GIVEN AFTER DULY CONSULTING THE ASSESSEE, IT WOULD BE REASONABLE TO APPLY A RATE OF 8% ON THE CONTRACT RE CEIPT FOR CALCULATING THE PROFIT OF THE ASSESSEE ON SUCH ACTI VITIES (BECAUSE UNDER THE PRESUMPTIVE TAX UNDER THE INCOME TAX ACT, 1961, THE RATE OF PROFIT ON CONTRACT RECEIPTS IS TA KEN AS 8%). ACCORDINGLY, THE PROFIT FOR THE YEAR UNDER CONSIDER ATION ON RECEIPTS OF RS.5,44,12,493/-, IS CALCULATED AT RS.4 3,53,000/- AS AGAINST RS, 54,249/- CALCULATED BY THE AO. THERE FORE, THE APPELLANT GETS RELIEF OF RS. 10,88,249/- AND THE AD DITION TO THE EXTENT OF RS. 8,53,000/- IS SUSTAINED. 13. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN VARIOUS DE CISIONS HAS HELD A NET PROFIT RATE OF 4% AS JUSTIFIABLE IN THE CASE OF THE CONTRACTORS. IN THIS REGARD HE RELIED UPON THE DECI SION IN THE CASE OF SH. PRAVEEN KUMAR MITTAL IN ITA NO.272 OF 2 011 DATED 13-10-11 AND A COPY OF THE SAME WAS PLACED BEFORE U S. HE ALSO REFERRED TO THE DECISION IN THE CASE OF SUKHJINDER SINGH VS. DCIT IN ITA NO.639/CHD/2015 FOR APPLICATION OF LOWE R NET PROFIT RATE OF 6%. 14. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD.CIT(A). ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 12 OF 15 15. WE HAVE HEARD BOTH THE PARTIES. THE ONLY ISSUE TO BE DECIDED IS THE APPLICABILITY OF NET PROFIT RATE TO THE CONTRACT RECEIPTS OF THE ASSESSEE. 16. THE ARGUMENT OF THE LD.COUNSEL FOR THE ASSESSEE JUSTIFYING APPLICATION OF A LOWER RATE OF NET PROFI T TO THE CONTRACT RECEIPTS AS AGAINST 8% APPLIED BY THE LD.C IT(A), THAT COURTS HAVE APPROVED 4%/6% NET PROFIT RATE ON RECEI PT OF CONTRACTORS, WE DO NOT FIND JUSTIFIED. THE CASE LAW S CANNOT LAY DOWN THE APPLICABLE NET PROFIT RATES ON BUSINESS, BEING A FACTUAL MATTER TO BE DETERMINED ON THE FACTS OF EAC H CASE. IN THE CASE OF PRABHAT KUMAR(SUPRA) RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE, THE HONBLE JURISDICT IONAL HIGH COURT HELD SO IN SO MANY WORDS WHEN REJECTING THE I DENTICAL ARGUMENT OF THE REVENUE THAT A RATE OF 12% NET PROF IT STOOD APPROVED BY THE COURT IN THE CASE OF CIVIL CONTRACT ORS. IT WAS HELD THAT THE FACTS OF THE CASE IN HAND WERE PERTIN ENT FOR APPLYING THE NET PROFIT RATE AND NOTING THE ACCEPTE D NET PROFIT RATE OF AROUND 4%, THE SAME WAS APPLIED IN THE SAID CASE. 17. IN THE PRESENT CASE IT IS NOT DENIED THAT THE H USBAND OF THE ASSESSEE, WHO WAS THE PERSON SEARCHED WHEREIN D OCUMENTS RELATING TO HIS WIFE, THE ASSESSEE BEFORE US, WERE FOUND, HAD HIMSELF STATED TO THE AUTHORITIES OF HAVING EARNED 8% TO 9% PROFITS ON THE RECEIPTS. MOREOVER, AS RIGHTLY POINT ED OUT BY THE ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 13 OF 15 LD.CIT(A), EVEN LEGISLATURE HAS CONSIDERED A NET PR OFIT RATE OF 8% TO BE APPROPRIATE FOR CONTRACT RECEIPTS IN THE P RESUMPTIVE SCHEME OF TAXATION. THEREFORE, WE SEE NO REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A) RESTRICTING THE NET PROF IT RATE OF 8% OF THE CONTRACT RECEIPTS. GROUND NO. 2 RAISED BY THE ASSESSEE IS, THEREFORE, DISMISSED. 18. IT WAS COMMON GROUND THAT THE ISSUES INVOLVED I N GROUND NOS. 3 & 4 RAISED BY THE ASSESSEE IN THIS APPEAL A RE IDENTICAL TO GROUND NOS.2 AND 4 RAISED BY THE ASSESSEE IN ITA NO.72/CHD/2021. THEREFORE, OUR DECISION RENDERED TH EREIN AT PARA 8 WILL APPLY MUTATIS MUTANDIS IN THE APPEAL OF THE ASSESSEE IN ITA NO.80/CHD/2021 ALSO. GROUND NOS. 3 & 4 RAISED BY THE ASSESSEE ARE, THEREFORE, ALLOWED. 19. GROUND NO.5 RAISED IN THIS APPEAL WAS NOT PRESS ED BEFORE US, AND THE SAME IS THEREFORE DISMISSED AS NOT PRE SSED. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 20. WE NOW TAKE UP THE APPEAL OF SMT.HARVINDER KAUR IN ITA NO.81/CHD/2021 FOR ASSESSMENT YEAR 2016-17. 21. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE AS UNDER: ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 14 OF 15 2. THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE APPLICATION OF RATE OF PROFIT @8% ON CONTRACT RECEIPTS AND IGNORING THE VOLUMINOUS EVIDENCE FILED DURING THE APPELLATE PROCEEDINGS ABOUT THE APPLICATION OF NET PROFIT RATE AT MUCH LESS PERCENTAGE. 3. THAT THE LD.CIT(A) HAS ERRED IN NOT CONSIDERING AND IGNORING THE SUBMISSIONS AND FACTS AS FILED BEFORE THE CIT(A) AS WELL AS BEFORE THE ASSESSING OFFICER. 22. WITH REGARD TO GROUND NO.2 & 3 RAISED IN THIS C ASE, IT WAS COMMON GROUND THAT THE ISSUE INVOLVED IN THIS GROUN D IS IDENTICAL TO GROUND NO.2 RAISED BY THE ASSESSEE IN ITA NO.80/CHD/2021. THEREFORE, OUR DECISION RENDERED TH EREIN AT PARAS 15 TO 17 WILL APPLY MUTATIS MUTANDIS TO THIS GROUND ALSO. GROUND NO. 2 & 3 RAISED BY THE ASSESSEE IS, T HEREFORE, DISMISSED. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 23. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE, IN ITA NO.72/CHD/2021 AND ITA NOS.80 & 81/CHD/2021 STAND P ARTLY ALLOWED. ORDER PRONOUNCED ON 27 TH AUGUST, 2021. SD/- SD/- (R.L. NEGI) (ANNAPURNA GUPTA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER DATED: 27 TH AUGUST, 2021 * * ITA NOS.72, 80 & 81/CHD/2021 A.YS. 2015-16 & 2016-17 PAGE 15 OF 15 ),' !-./.! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % 0! / CIT 4. % 0! ( )/ THE CIT(A) 5. .12 ! 3 , '3 , 45627 / DR, ITAT, CHANDIGARH 6. 268& / GUARD FILE ), % / BY ORDER,