M/s Ajay Bhagat, Ranchi V. ACIT Circle-1, Ranchi

ITA 99/RAN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0039 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 05-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHOUDHURY ORAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER ITA NO.99/RAN/2015 ASSESSMENT YEAR :2008-09 M/S AJAY BHAGAT AT & P.O. DOLAICHA, P.S. LAPUNG, RANCHI V S ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-I, RANCHI PAN/GIR NO. :AAKFA 8571E (APPELLANT ) .. (RESPONDENT) APPELLANT BY : SHRI DEVESH PODDAR, ADVOCATE RESPONDENT BY : SHRI CHOUDHURY ORAN, DR DATE OF HEARING :06-09-2016 DATE OF PRONOUNCEMENT : 09-09-2016 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED26.03.2015 OF COMMISSIONER OF INCOME TAX (APPE ALS), RANCHI (JHARKHAND) RELATING TO ASSESSMENT YEAR 2008-09. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN E STIMATING THE INCOME OF THE ASSESSEE AT 7% OF GROSS CONTRACT RECE IPTS. THE ASSESSEE IS A FIRM. IT IS ENGAGED IN THE BUSINESS OF CARRYIN G OUT CIVIL CONSTRUCTION CONTRACT. THE ASSESSEE FILED RETURN OF INCOME FOR A Y 2008-09 DECLARING NET PROFIT OF 5.06% ON THE TURNOVER OF 1,44,87,134 /-. THE ASSESSING OFFICER DETERMINED THE INCOME OF THE ASSESSEE BY AP PLYING 7% NET PROFIT RATE ON THE DECLARED TURNOVER. THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE REJECTED BY THE AO U/S 145(3) OF THE INCOME TAX ACT, 1961 (THE ACT). 2 ITA NO.99/RAN/2015 AY:2008-09 3. ON APPEAL BY THE ASSESSEE LD. CIT(A) CONFIRMED T HE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE HAS P REFERRED PRESENT APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL SUBMISSIONS. THE REJECTIO N OF BOOKS OF ACCOUNTS U/S.145(3) OF THE ACT IS NOT DISPUTED BY T HE ASSESSEE. ASSESSEE IS A CIVIL CONTRACTOR. LD. AO WHILE MAKING THE ASSESSMENT, ESTIMATED THE NET PROFIT OF THE ASSESSEE @ 7% AGAIN ST THE NET PROFIT DECLARED BY ASSESSEE @ 5.06%. FOR THE AY 2005-06 LD . AO HAD ESTIMATED PROFIT @ 8% AGAINST THE PROFIT DISCLOSED BY ASSESSEE AT 4%. LD. CIT(A) RANCHI, ALLOWED THE APPEAL FILED BY THE ASSESSEE AND DELETED THE ADDITION MADE BY AO ON ESTIMATE OF NET PROFIT. DETAILS OF GROSS TURNOVER AND NET PROFIT BEFORE INTEREST & REM UNERATION FOR DIFFERENT YEARS ARE AS UNDER:- A.Y TURNOVER NET PROFIT % BEFORE INTEREST & REMUNERATION 2006-07 1,31,08,029/- 4.03% 2007-08 2,06,18,923/- 4.02% 2008-09 1,44,87,134/- 5.06% 2009-10 2,80,12,408/- 5.01% 2010-11 5,73,93,449/- 4.74% NET PROFIT DISCLOSED FOR EARLIER AS WELL AS SUBSEQU ENT YEARS AT AROUND 4- 5% HAS BEEN ACCEPTED BY THE LOWER AUTHORITIES. CO-O RDINATE BENCH OF THIS TRIBUNAL IN A NUMBER OF CASES HAVE ALLOWED NET PROFIT BEFORE INTEREST AND REMUNERATION TO BE ESTIMATED AT AROUND 5%. 5. ACCEPTING THE SUBMISSION MADE AS ABOVE, I HOLD T HAT ESTIMATION OF INCOME AS DONE BY THE REVENUE AUTHORITIES CANNOT BE SUSTAINED. THE NET PROFIT DECLARED BY ASSESSEE THE FAIR AND REASON ABLE AND COMPARES FAVOURABLY WITH THE PAST HISTORY OF ASSESSEES CASE . THEREFORE THE 3 ITA NO.99/RAN/2015 AY:2008-09 DECLARED RESULTS ARE DIRECTED TO BE ACCEPTED AND TH E ADDITION MADE BY THE REVENUE AUTHORITY IS DIRECTED TO BE DELETED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 09/09/2016 SD/- (N.V.VASUDEVAN ) JUDICIAL MEMBER RANCHI , DATED 09/09/2016 *DKP ,PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT M/S AJAY BHAGAT, AT & P.O.DOLAICH A, P.S LAPUNG 2. THE RESPONDENT-ACIT, CIRCLE-I, RANCHI 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE. BY ORDER, //TRUE COPY // SR.PS, ITAT, RANCHI