ACIT, Varanasi V. M/s Hari Narayan Rai,(conractor), Ballia

ITA 97/ALLD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89815 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH PATHAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI C. N. PRASAD, JUDICIAL MEMBER ITA NO. 97/ALLD/2012 ASSESSMENT YEARS: 2009-10 ACIT CIRCLE-2 AAYAKAR BHAVAN VARANASI VS. M/S. HARI NARAYAN RAI CONTRACTOR, HAIBATPUR KHORIPAKAR, BALLIA- 277001 PAN:AAEFH4906N (APPELLANT) (RESPO NDENT) ASSESSEE BY : SHRI PRAVEEN GODBOLE REVENUE BY : SHRI UMESH PATHAK DATE OF HEARING : 23.04.2015 DATE OF PRONOUNCEMENT : 24.04.2015 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL BY THE ASSESSEE, IS FILED AGAINST THE ORDER OF THE LD. CIT(A) VARANASI, DATED 27.02.2012 FOR THE A.Y. 2009-10. T HE GROUNDS ARE ARGUMENTATIVE IN NATURE AND HOWEVER, THE ISSUE THAT ARISE FROM GROUN D RELATES TO RELIEF OF RS.29,78,231/- GRANTED BY THE LD. CIT(A) IN FAVOUR OF THE ASSESSEE. 2. ASSESSEE IS A CIVIL CONTRACT AND FILED THE RETUR N OF INCOME OF RS.14,85,230/-. IN THE SCRUTINY ASSESSMENT U/S 143 OF THE ACT, AO R EJECTED THE BOOKS OF ACCOUNTS FOR THE REASON SPECIFIED IN PARA 4 OF THE ASSESSMENT OR DER AND ESTIMATED THE NET PROFITS APPLYING THE FLAT @ 10% OF THE TOTAL CONTRACT RECEI PTS BEFORE INTEREST AND REMUNERATION PAID TO THE PARTNERS. OTHERWISE, ASSES SEE DISCLOSED NET PROFITS RATE OF 5.01%. THUS, THE AO MADE ADDITION OF RS.29,78,231/- . AGGRIEVED WITH THE SAID ADDITION, ASSESSEE FILED AN APPEAL BEFORE THE LD. C IT(A). DURING THE PROCEEDINGS BEFORE HIM, THE ASSESSEE SUBMITTED THAT N.P. OF 5.0 1% IS FAIR AND REASONABLE. IN THIS REGARD, HE SUBMITTED THAT THE REVENUE ACCEPTED LOWE R NET PROFITS IN THE ASSESSMENTS OF THE ASSESSEE FOR EARLIER YEARS. ACCEPTING THE SA ME, THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE RELATING THE ADDITION. AGGRIEVED SA ME ASSESSEE FILED PRESENT APPEAL BEFORE THE TRIBUNAL. APART FROM SUBMITTING THAT ASS ESSING OFFICER ACCEPTED THE LOWER ITA NO. 97/ALLD/2012 ASSESSMENT YEARS: 2009-10 2 NET PROFITS IN THE PAST, LEARNED COUNSEL SUBMITTED THAT ORDER OF THE LD. CIT(A) IS FAIR AND REASONABLE. REFERRING TO THE NET PROFITS OF THE COMPARABLE CASES, LD. COUNSEL SUBMITTED THAT, WHEN SIMILAR ESTIMATIONS WERE MADE IN SUCH CASES, THE TRIBUNAL RESTRICTED THE N.P. OF THOSE CASES TO THE PERCENTAG E LESS THAN 5%. BRINGING OUR ATTENTION TO THE PAPER BOOK PAGE 3, LD. COUNSEL SUB MITTED IN THE CASE OF A.K. CONSTRUCTION COMPANY ITA NO. 120/A/2011, A.Y. 2006- 07 DATED 02.11.2012 , LD. COUNSEL MENTIONED THE TRIBUNAL CONFIRMED THE N.P. @ 4%. PARA 5 OF THE TRIBUNAL ORDER IS RELEVANT FURTHER, REFERRING TO ANOTHER DEC ISION OF THE TRIBUNAL OF THIS BENCH I IN THE CASE OF M/S. BABA BUILDERS ITA NOS. 234 & 274/ALLD/2014 DATED 07.10.2010 . COUNSEL READ OUT FROM PAGE 22 WHERE 4.5% OF N.P. IS CONFIRMED IN THAT CASE AND BABA BUILDERS (SUPRA). IN SUCH CIRCUMSTANCES, WHEN THE N.P. OF THE ASSESSEES BUSINESS IS 5%, WHICH IS MUCH HIGHER THAN 4% AND 4. 5% AS CONFIRMED BY THE TRIBUNAL IN THE CASES CITED ABOVE (SUPRA), THE ORDE R OF THE LD. CIT(A) SHOULD BE UPHELD. 3. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED ON THE ORDER OF THE AO. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AND THE PAPER BOOK FILED BEFORE US. IT IS AN UNDISPUTED FACT THAT THE CASES OF BABA BUILDERS AND A.K. CONSTRUCTION COMPANY (SUPRA) ARE COMPARABLE IN THE NATURE OF BUSINESS. THE N.PS. DISCLOSED BY THE ASSESSEE AT TH E RATE OF 5.01% IS MUCH HIGHER THAN THAT OF THE N.PS. OF THE 4% AND 4.5% DISCLOSED BY THE ABOVE SAID FIRMS. IN THESE CIRCUMSTANCES, THE ORDER OF THE LD. CIT(A), W E HAVE GONE THROUGH THE CONTENTS OF PARA 6 AND 7 OF THE LD. CIT(A) AND FIND THE DECISION OF THE LD. CIT(A) IN ACCEPT IN THE N.P. 5.01% IS FAIR AND REASONABLE, AC CORDING TO THE ORDER OF THE LD. CIT(A) IS UNDISTURBED ON THIS ISSUE. ACCORDINGLY, I SSUE RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF APRIL, 2015. SD/- SD/- (C. N. PRASAD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER ALLAHABAD, DATED: 24.04.2015 *SRIVASTAVA ITA NO. 97/ALLD/2012 ASSESSMENT YEARS: 2009-10 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, ALLAHABAD THE CIT(A) CONCERNED, ALLAHABAD THE DR BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, ALLAHABAD.