M/S LAXMI BUILDERS AND DEVLOPERS, JHUNJHUNU V. ASSISTANT COMMISSIONER OF INCOME TAX, JHUNJHUNU

ITA 961/JPR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1458 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH ACIT
• Assessee Lawyers: K L MOOLCHANDAN I
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 961/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 M/S LAXMI BUILDERS & DEVELOPERS, V. & P.O. BAKHTAWARPURA, CHIRAWA, JHUNJHUNU. CUKE VS. ACIT, CIRCLE, JHUNJHUNU. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABFL 3735 C VIHYKFKHZ@ APPELLA NT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI K.L. MOOLCHANDANI (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. NEENA JEPH (ACIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/08/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 04/09/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-3, JAIPUR DATED 09.10.2017 FOR THE ASSESSMEN T YEAR 2010-11 WHEREIN THE ASSESSEE HAS CHALLENGED THE CONFIRMATIO N OF ADDITION OF 3% OF THE CONTRACT EXPENSES AMOUNTING TO RS. 15,87, 142/- BY THE ASSESSING OFFICER. 2. BRIEFLY, THE FACTS OF CASE ARE THAT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE BOOKS OF ACCOUNTS WERE REJECTED U/ S 145(3) OF THE ACT AND THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) R. W.S. 144 OF THE ACT WHEREIN THE ASSESSING OFFICER HAS ACCEPTED THE CONTRACT RECEIPT ITA NO. 961 /JP/2017 M/S LAXMI BUILDERS & DEVELOPERS VS. ACIT 2 DECLARED BY THE ASSESSEE AMOUNTING TO RS. 6,02,88,1 78/- AND THEREAFTER CONSIDERING THAT THE PROPORTION OF CONTRACT EXPENSE S TO THE TOTAL RECEIPT ARE DISPROPORTIONATELY EXCESSIVE HAS DISALLOWED 3% OF THE CONTRACT EXPENSES WHICH WORKS OUT TO RS. 15,87,142/-. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD CIT(A) WHO HAS CONFIRMED THE SAID ADDITION. 3. DURING THE COURSE OF HEARING, THE LD. AR TOOK U S THROUGH THE PAST HISTORY OF THE ASSESSEE AND SUBMITTED THE GP & NP R ESULTS SHOWN IN THE YEAR UNDER CONSIDERATION WERE VERY MUCH COMPARA BLE, FAIR AND REASONABLE AS PER THE PAST HISTORY OF THE ASSESSEE AND NO DISALLOWANCE OF THE CONTRACT EXPENSES SHOULD BE MADE. 4. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE MATTER AND RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, THE BOOKS OF ACC OUNTS HAVE BEEN REJECTED U/S 145(3) OF THE ACT, THEREFORE, THE LIMI TED ISSUE UNDER CONSIDERATION IS THE ESTIMATION OF GROSS PROFIT RAT E BY APPLYING A REASONABLE YARDSTICK WHICH THE COURTS HAVE HELD FRO M TIME TO TIME THAT THE ASSESSEES PAST HISTORY COULD ACT AS A REASONAB LE YARDSTICK. IN OUR VIEW, THE GROSS PROFIT RATE HAS TO BE ESTIMATED BY APPLYING THE AVERAGE OF THE GROSS PROFIT RATE AS PER PAST HISTORY WHICH HAS ATTAINED FINALITY. IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAS DIS CLOSED GP RATE 11.21% IN A.Y. 2007-08, 8.99% IN A.Y. 2008-09, 8.26 % IN A.Y. 2009-10 WHICH WAS ENHANCED TO 8.75% IN ORDER PASSED U/S 143 (3) OF THE ACT. ITA NO. 961 /JP/2017 M/S LAXMI BUILDERS & DEVELOPERS VS. ACIT 3 THEREFORE, EXCEPT FOR AY 2009-10, THERE IS NO INFOR MATION AVAILABLE ON RECORD IN RESPECT OF OTHER YEARS AS TO WHETHER G.P RATE SO DECLARED HAS ATTAINED FINALITY. IN VIEW OF THE SAME, WE SET ASID E THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DETERMINE THE PAST GP R ATE WHICH HAS ATTAINED FINALITY AND APPLYING THE AVERAGE OF THE S AME TO THE YEAR UNDER CONSIDERATION. WE MAKE IT CLEAR THAT WHERE THE G.P RATE SO DECLARED FOR THE YEAR UNDER CONSIDERATION IS HIGHER THAN THE AVE RAGE G.P RATE SO DETERMINED, THERE WOULD NOT BE ANY ADDITION IN THE HANDS OF THE ASSESSEE. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/09/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04/09/2018. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S LAXMI BUILDERS & DEVELOPERS, JHUNJHUNU. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE, JHUNJHUNU. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 961/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR