PBS CONSTRUCTIONS, BADGAM V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE, SRINAGAR

ITA 91/ASR/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5104 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-06-2024
• Assessment Year: misc
• Appeal Filed On: 25-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Opportunity of being heard; Condonation of delay
• Section: 143(3); 142(1); 250; 69A; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER I.T.A. No.91/Asr/2024 Assessment Year: 2017-18 PBS Consructions Checkpora Chadoora Budgam UT J& K [PAN:AAKFP2959H] (Appellant) Vs. CIT (Appeal) NFAC, Delhi. (Respondent) Appellant by None Respondent by Sh. Radhey Shyam Jaiswal, Sr. DR Date of Hearing 25.06.2024 Date of Pronouncement 12.08.2024 ORDER Per: Udayan Das Gupta, JM This appeal is presented by the assessee against the order of the Ld. CIT (A) NFAC, order dated 13/11/2023, passed u/s 250 of the Act 61, which has emanated from the order of the AO passed u/s 143(3) dated 19.12.2019, by ACIT, Circle, Srinagar. 2. It is pointed out by the Registry that the appeal is time barred by 45 days. The appellant has filed a petition for condonation of delay on the ground that there has been death in the family of one of the partners of the assessee firm, and I.T.A. No.91/Asr/2024 Assessment Year: 2017-18 2 because of the delay all work has been held up and the filing of the appeal could not have made within the stipulated period of time. However, it is seen that assessee has deposited the ITAT Appeal filling fees of Rs.10,000/- on 13.02.2024, which proves that there was clear intention on the part of the assessee to file the appeal but due to death in the family, the same could not be filed within the stipulated time. The ld. DR has not opposed the condonation. As such, considering the facts of the case, that there has been a death in the family and it takes time to complete the rituals, this delay of 45 days is condoned. Accordingly, the appeal is admitted for hearing on merits. 3. The assessee has taken the following grounds: “1. That the treasury payments in the bank account treated as cash deposits. 2. Net profit rate applied on turnover without giving deduction on account of interest on capital, remuneration to partners and depreciation on fixed assets.” 4. The facts of the case are that the assessee is a partnership firm and is engaged in the business of construction under various government agencies. During the course of assessment proceedings, (which was normal scrutiny selected under CASS) the assessee firm has made compliance to notice u/s 142(1) on various dates as mentioned in the assessment order but has not produced the cash book and records relating to payment of wages, purchase invoices and expenditure vouchers. Moreover, the AO has observed that there has been cash deposit in bank I.T.A. No.91/Asr/2024 Assessment Year: 2017-18 3 account during the F.Y. the source of which could not be explained by the assessee, in absence of any cash book being produced before the AO. 4.1 As such, the book results were rejected and the AO proceeded to take recourse to section 145(3) of the Act and has completed the assessment by making an addition of Rs.1,08,01,000/- u/s 69A on account of cash deposits in bank, and by estimation of contract business income @ 10% gross receipts which work out to Rs.96,33,833/- (on gross contract receipts of 9.63 crores), thereby determining a total income of Rs.2,04,51,171/- (as per computation in the assessment order). 5 The matter was carried in appeal before the first appellate authority, and the first appellate authority has dismissed the appeal, because there has not been any compliance on the part of the assessee to various notices issued from the office of the ld. CIT(A). It is seen from records, that notices during appellate proceedings has been issued on six separate dates, but unfortunately, there has not been any compliance or submission from the assessee or his AR. As such, the ld. CIT(A) has upheld the order of the ld. AO and dismissed the appeal for want of representation. 6. Now, the matter is before the Tribunal on the ground contained in the memorandum of appeal in form no. 36. 7. The ld. AR has submitted a paper book containing 44 pages, (which is not in accordance with ITAT Rules), copies of bank account, certificate from bank and unsigned copy of profit and loss a/c and balance sheet. There only contention was I.T.A. No.91/Asr/2024 Assessment Year: 2017-18 4 that on the facts of the case and on the material on record profit of the firm should be estimated at fair percentage of gross receipts. He further stated that due to the fact that one of the partner is seriously ill, who has expired, subsequently, no representation could be made before the ld. CIT(A). 8. The ld. DR relied upon the order of the ld. CIT(A) and submitted that the AO has passed a very reasonable order in estimating the net profit @ 10% of gross receipts which is perfectly in order and should be sustained. 9. We have heard the rival submission and considered the material on record and we find that the ld. CIT(A) has issued six notices on various dates but it is not clear whether the said notices has been served in the ITBA portal or in the E-mail ID mentioned in form no. 35. 9.1 Moreover, in absence of any submissions and documentary evidences being filed before the first appellate authority, the appeal has not been decided on merits. We also find that there has been a deposit in cash in bank account of the assessee which can only be explained through production of cash book which has not been done in this case. As such, in the interest of justice, we remit the matter back to the file of the ld. CIT(A) for passing a fresh order considering all the grounds contained in form no. 35 on the merits of the case after affording a reasonable opportunity of being heard to the assessee. The assessee is also directed to produce I.T.A. No.91/Asr/2024 Assessment Year: 2017-18 5 all necessary documentary evidences before the ld. CIT(A) for establishing his case, and to fully co-operate in appellate prodiceedings. 10. In the result, the appeal of the assessee bearing ITA No. 91/Asr/2024 is allowed for statistical purposes. Order pronounced in the open court on 12.08.2024 Sd/- Sd/- (Dr. M. L. Meena) (UDAYAN DAS GUPTA) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order I.T.A. No.91/Asr/2024 Assessment Year: 2017-18 6