ACIT Circle-6, Nagpur V. Shri. Rajendra Balbhadra Goenka, Nagpur

ITA 88/NAG/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9571 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI
• Section: 44AD; 2

Judgement Text

ITA NO. 88/NAGPUR/2010 RAJENDRA BALBHADRA GOENKA, NAGPUR IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , NAGPUR BEFORE: SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI D.T. GARASIA , JUDICIAL MEMBER ITA NO. 88 / NAG / 20 10 ASSESSMENT YEAR : 2006 - 07 ACIT, CIRCLE - 6 NAGPUR VS. RAJENDRA BALBH ADRA GOENKA NAGPUR (APPELLANT) (RESPONDENT) PAN NO.AAOPG 4703A APPELLANT BY: DR. MILIND BHUSARI, SR. DR RESPONDENT BY: SHRI K.P. DEWANI, ADVOCATE DATE OF HEARING: 11.10.2012 DATE OF PRONOUNCEMENT: 15.10.2012 ORDER PER P.K. BANSAL, ACCOUNTANT MEMBER: - THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF THE CIT(A) DATED 25.2.2010 BY TAKING THE FOLLOWING EFFECTIVE GROUND OF APPEAL: 1. THE LD. CIT(A) - II, NAGPUR ERRED IN DIRECTING THE AO TO ADOPT THE NET PROFIT AT 7% OF CONTRACTUAL RECEIPTS DESPITE TH E FACT THAT THE AO FOUND SPECIFIC DISCREPANCIES WITH RESPECT TO CONTRACTUAL RECEIPTS OF BOTH ELECTRICAL AND LABOUR CONTRACT WORK? 2. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE FIND THAT THE ASSESSING OFFICER REJECTED THE BOOKS O F ACCOUNTS OF THE ASSESSEE AND ESTIMATED THE NET PROFIT @ 12%. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE NET PROFIT @ 7%. 3. WE NOTED THAT THE REJECTION OF THE BOOKS OF ACCOUNTS HAD BEEN CONFIRMED BY THE CIT(A) AND THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE REJECTION OF THE BOOKS OF ACCOUNTS. NOW THE ONLY QUESTION BEFORE US REMAINS THE ESTIMATION OF THE PROFIT IN VIEW OF THE PROVISION OF SECTION 144. THE ASSESSEE BEFORE US FILED A COMPARAT IVE CHART FOR THE PRECEDING TWO ASSESSMENT YEARS WHICH HAS BEEN ITA NO.88/NAGPUR/2010 RAJENDRA BALBHADR A GOENKA, NAGPUR 2 COMPLETED U/S 143(1) BUT HAS NOT DISCLOSED THE NET PROFIT FOR THE SUBSEQUENT TWO ASSESSMENT YEARS I.E. THE ASSESSMENT YEAR 2007 - 08 AND 2008 - 09. ESTIMATE IS ALWAYS AN ESTIMATE AND HAS TO BE MA DE TO THE BEST OF THE MATERIAL AVAILABLE ON RECORD. ESTIMATE CANNOT TAKE THE PLACE OF ACTUALITY. IF THERE IS NO COMPARATIVE INSTANCE AVAILABLE, WE ARE OF THE VIEW THAT SECTION 44AD WILL BE THE BEST GUIDELINE TO ESTIMATE THE PROFIT. SECTION 44AD PROVIDES A RATE OF 8% IN THE ESTIMATION OF THE NET PROFIT EVEN THOUGH THIS SECTION IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE. WE THEREFORE, TAKING THE GUIDELINES OF SECTION 44AD SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ESTIMATE TH E NET PROFIT @ 7% IN THE CASE OF THE ASSESSEE. 4 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 15.10 .20 1 2 SD/ - SD/ - ( D.T. GARASIA ) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS NAGPUR DATED 15 TH OCTOBER , 20 1 2 COPY TO 1 ACIT, CIRCLE - 6, NAGPUR 2 SHRI RAJENDRA B. GOENKA, R.K. ENGINEERING, 816, NANDANVAN MAIN ROAD, NEHRU NAGAR, NAGPUR 3 THE CIT (A) , NAGPUR 4 THE DR, ITAT, NAGPUR 5 GU ARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL NAGPUR