M/s Creative Engg. & Construction Co., Panchkula V. ACIT, Ambala

ITA 93/CHANDI/1997

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68574 (ITAT-CHANDIGARH)
• Duration Of Justice: 16 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 1993-1994
• Appeal Filed On: 03-02-1997
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Question of law
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 93/CHD/1997 ASSESSMENT YEAR : 1993-94 M/S CREATIVE ENGINEERING & VS THE A.C.I.T.(INVEST IGATION) CONSTRUCTION COMPANY, CIRCLE, 1114/7, AMBALA. PANCHKULA. PAN : ----------- (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 28.11.2013 DATE OF PRONOUNCEMENT : 28.11.2013 O R D E R PER SUSHMA CHOWLA, JM THE PRESENT APPEAL IS INSTITUTED BEFORE THE TRIBUNA L PURSUANT TO THE ORDER OF HON'BLE PUNJAB & HARYANA HIGH COURT IN ITA NO. 259 OF 2003, DATE OF JUDGEMENT 03.02.2011 WHEREIN, IN AN APPEAL FILED BY THE DEPARTMENT, THE ISSUE WAS SET ASIDE TO THE FILE OF TRIBUNAL TO RE- ADJUDICATE THE ISSUE. 2. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE WAS A CIVIL CONTRACTOR AND HAD FILED RETURN OF INCOME DEC LARING TOTAL INCOME OF RS. 2,17,416/-. THE BOOKS OF ACCOUNT PRODUCED BY T HE ASSESSEE WERE REJECTED BY THE ASSESSING OFFICER AND THE ASSESSMEN T WAS FRAMED ON A TOTAL INCOME OFRS.11,66,590/- BY APPLYING NET PROFI T RATE OF 10%, WHICH WAS UPHELD BY THE CIT(APPEALS). THE TRIBUNAL IN TH E FIRST ROUND OF APPEAL VIDE ORDER DATED 29.10.2010 TREATED THE PROF IT DISCLOSED BY THE 2 ASSESSEE TO BE REASONABLE AND ALLOWED THE RELIEF TO THE ASSESSEE. THE HON'BLE PUNJAB & HARYANA HIGH COURT (SUPRA) IN THE APPEAL FILED BY THE REVENUE CONSIDERED THE APPROPRIATE NET PROFIT RATES TO BE ADOPTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE CASE OF T HE REVENUE WAS THAT NET PROFIT RATE DECLARED BY THE ASSESSEE WAS 3.4% W HEREAS THE TRIBUNAL HAD GIVEN AN OBSERVATION THAT THE ASSESSEE HAD DISC LOSED NET PROFIT RATE OF 7%. THE HON'BLE PUNJAB & HARYANA HIGH COURT VID E PARA 10 & 11 OBSERVED AS UNDER : 10. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSION OF LD. COUNSEL FOR THE REVENUE AND FIND MERIT IN THE SAME. AS NOTICED ABOVE, THE ASSESSING OFFICER AND THE CIT (A) WHILE ADOPTING THE NET PROFIT RATE OF 10% HAD KEPT IN MIND THAT THIS INCLUDED THE CASH CREDITS WHICH HAD NOT BEEN D ISCLOSED IN THE BOOKS OF ACCOUNTS AND THIS WAS AS PER SUBMISSION OF COUNSEL FOR THE ASSESSEE. HOWEVER, THE TRIBUNAL FAILED TO ADVER T TO THE AFORESAID ASPECT AND, THEREFORE, THE ORDER STANDS V ITIATED. 11. IN VIEW OF THE ABOVE, THE SUBSTANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE REVENUE. THE PRESENT APPE AL IS ALLOWED AND THE ORDER OF THE TRIBUNAL IS SET ASIDE. THE MATTER IS REMITTED TO THE TRIBUNAL FOR AFRESH DECISION, IN AC CORDANCE WITH LAW. 3. IN VIEW OF THE DIRECTIONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ASSESSEE'S OWN CASE (SUPRA), THE PRESENT APPEAL WAS FIXED BEFORE THE TRIBUNAL. HOWEVER, DESPITE VARIOUS NOTI CES BEING ISSUED TO THE ASSESSEE, NONE APPEARED ON BEHALF OF THE ASSESS EE. FROM THE PERUSAL OF THE ORDER OF THE HON'BLE PUNJAB & HARYAN A HIGH COURT, IT IS APPARENT THAT NONE ON BEHALF OF THE ASSESSEE HAD AP PEARED BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT DESPITE SERVICE OF NOTICE BY AFFIXTURE. IN VIEW THEREOF, WE PROCEED TO DECIDE TH E PRESENT APPEAL AFTER HEARING THE LD. DR FOR THE REVENUE. 4. THE ONLY ISSUE ARISING IN THE PRESENT APPEAL IS ADOPTION OF NET PROFIT RATE TO DETERMINE THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. BOTH THE AUTHORITIES BELOW HAD ADOP TED A NET PROFIT 3 RATE OF 10% AFTER REJECTING THE BOOKS OF ACCOUNT AN D FOR ESTIMATING THE INCOME IN THE HANDS OF THE ASSESSEE BOTH FROM THE B USINESS AND ALSO ON ACCOUNT OF THE CASH CREDITS WHICH WERE NOT DISCLOSE D IN THE BOOKS OF ACCOUNT. UNDER THE PROVISIONS OF SECTION 44AD OF T HE INCOME TAX ACT, THE PRESUMPTIVE ASSESSMENT IS TO BE MADE IN TH E HANDS OF THE CONTRACTORS BY APPLYING NET PROFIT RATE OF 8%. 5. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WHERE THE ADDITION IS TO BE MADE BOTH FOR ESTIMATING INCOME AND ALSO O N ACCOUNT OF CASH CREDITS WHICH HAD NOT BEEN DECLARED BY THE ASSESSEE , WE ARE OF THE VIEW THAT NET PROFIT RATE OF 9% TO BE APPLIED TO TH E YEAR UNDER APPEAL. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO COM PUTE THE INCOME IN THE HANDS OF THE ASSESSEE AFTER APPLYING NET PROFIT RATE OF 9%. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, PA RTLY ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER,2013. SD/- SD/- ( T.R.SOOD) (SUSHMA CHO WLA) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED: 28 TH NOVEMBER,2013 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT/ THE DR ASSISTANT REGISTRAR ITAT,CHD.