ACIT, Kurukshetra V. Sh. Amrit Lal, Kurukshetra

ITA 930/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68553 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-10-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 13-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

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.930/CHD/2012 ASSESSMENT YEAR : 2009-10 THE ACIT, VS SHRI AMRIT LAL, CIRCLE, PROP. M/S AMRIT LAL KURUKSHETRA. NAGPAL (CONTRACTOR), # 1613, SECTOR 07, U.E. KURUKSHETRA. PAN : ABZPL1907B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA RESPONDENT BY : NONE DATE OF HEARING : 28.10.2013 DATE OF PRONOUNCEMENT : 31.10.2013 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF THE CIT(APPEALS) DATED 27.06.2012 RELATING TO ASSESSMEN T YEAR 2009-10 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF TH E INCOME-TAX ACT, 1961 ( 'THE ACT' FOR SHORT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND OF A PPEAL : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E , THE LD. CIT(A) HAS ERRED IN LAW IN DIRECTING THE A.O. TO WORK OUT THE INCOME AT NET PROFIT RATE OF 8% INSTEAD OF RATE APPLIED BY THE A.O. @ 12% IN VIE W OF JURISDICTIONAL HIGH COURTS ORDER IN THE CASE OF PRABHAT KUMAR CONTRACT OR OF SIRSA V CIT 323 ITR 675 WHICH IS BINDING UPON THE A.O.. 2 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL BY T HE REVENUE IS IN RELATION TO THE APPLICATION OF NET PROFIT RATE TO D ETERMINE THE INCOME OF THE ASSESSEE. DESPITE SERVICE OF NOTICE, NONE A PPEARED ON BEHALF OF THE ASSESSEE BUT IN VIEW OF THE SMALLNESS OF THE ISSUE, WE PROCEED TO DECIDE THE ABOVE APPEAL AFTER HEARING LD. DR FOR THE REVENUE. 4. THE ONLY ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST ESTIMATION OF NET PROFIT RATE AFTER REJECTION OF BO OKS OF ACCOUNT. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS A CIVIL CONTRACTOR AND HAD DECLARED NET PROFIT RATE OF 2.56% IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICE R FOUND CERTAIN DISCREPANCIES IN RESPECT OF THE EXPENSES CLAIMED IN THE PROFIT & LOSS ACCOUNT AND THE LEDGER PRODUCED BY THE ASSESSEE WAS FOUND TO BE MISLEADING. IN THE ABSENCE OF PROPER BILLS AND VOU CHERS, THE QUANTUM OF EXPENDITURE INCURRED ON SAND AND BAJRI WAS ALSO FOUND TO BE UNVERIFIABLE BEING UN-VOUCHED. THE ASSESSING OFFIC ER HELD THAT THE ASSESSEE WAS NOT MAINTAINING PROPER BOOKS OF ACCOUN T AND STOCK REGISTER AND IN VIEW THEREOF, AFTER SHOW CAUSE NOTI CE TO THE ASSESSEE THE BOOKS OF ACCOUNT WERE REJECTED AND NET PROFIT R ATE OF 12% WAS APPLIED IN VIEW OF THE JUDGEMENT OF THE HON'BLE PUN JAB & HARYANA HIGH COURT IN PRABHAT KUMAR, CONTRACTOR OF SIRSA VS CIT [323 ITR 675 (P&H) ] AND THE INCOME IN THE HANDS OF THE ASSE SSEE WAS RE- COMPUTED. 5. THE CIT(APPEALS) UPHELD THE REJECTION OF BOOKS O F ACCOUNT IN VIEW OF VARIOUS DISCREPANCIES AND NON-MAINTENANCE O F BILLS AND VOUCHERS FOR MAJORITY OF THE EXPENDITURE. HOWEVER, THE ESTIMATION OF INCOME WAS WORKED OUT @ 8% IN VIEW OF THE RATIO LAI D DOWN BY THE CHANDIGARH BENCH OF TRIBUNAL IN M/S MADAN BUILDERS, GOVT. CONTRACTOR, SHAHABAD VS ADDL. CIT, KURUKSHETRA IN I TA NO. 3 1159/CHD/2011 ORDER DATED 12.01.2012. THE REVENUE IS IN APPEAL AGAINST THE AFORESAID ESTIMATION OF NET PROFIT RATE AT 8% BY THE CIT(APPEALS) AS AGAINST 12% BY THE ASSESSING OFFICE R. 6. ON PERUSAL OF THE RECORD AND THE EARLIER RATIO L AID DOWN BY THE CHANDIGARH BENCH OF TRIBUNAL IN SERIES OF DECISIONS , WE HOLD THAT AFTER REJECTION OF BOOKS OF ACCOUNT, ESTIMATION OF PROFITS IS TO BE MADE IN THE HANDS OF THE ASSESSEE IN ORDER TO DETER MINE THE INCOME OF THE ASSESSEE. IN THE TOTALITY OF THE ABOVESAID FAC TS AND CIRCUMSTANCES AND THE ASSESSEE BEING A CIVIL CONTRACTOR, WE ARE I N CONFORMITY WITH THE FINDINGS OF CIT(APPEALS) THAT AFTER REJECTION O F BOOKS OF ACCOUNT, NET PROFIT RATE OF 8% IS TO BE APPLIED TO COMPUTE T HE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. IT HAS NOT BEEN BROUGHT TO OUR NOTICE WHETHER ANY APPEAL HAS BEEN FILED BY THE ASSESSEE AND IN VIEW THEREOF, WE UPHOLD THE REJECTION OF BOOKS OF A CCOUNT AND ESTIMATION OF PROFITS @ 8%. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER,2013. SD/- SD/- ( T.R.SOOD) (SUSHMA C HOWLA) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 31 ST OCTOBER, 2013 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR ITAT,CHD.