Appeal details
Counselvise Citation
[2012] 124 COUNSELVISE.COM (IT) 7618 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
27-03-2012
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Assessment Year
2004-2005
Appeal Filed On
21-12-2011
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS)A NOS. 193 TO 196/IND/2011 A.YS. - 2004-05 TO 2007-08 M/S. SHIVSHAKTI LAND & FINANCE, DEWAS PAN AAPFS 5060 H . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT ITA NO. 372/IND/2011 A.Y. - 2008-09 M/S. SHIVSHAKTI LAND & FINANCE, DEWAS PAN AAPFS 5060 H . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT IT(SS)A NOS. 188 TO 190/IND/2011 A.YS. - 2004-05 TO 2006-07 M/S. ANAND LAND & FINANCE CO., DEWAS PAN AAIFA 9468 L . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT 2 ITA NO. 370/IND/2011 A.Y. - 2008-09 M/S. ANAND LAND & FINANCE CO., DEWAS PAN AAIFA 9468 L . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT IT(SS)A NOS. 191 & 192/IND/2011 A.YS. - 2006-07 & 2007-08 M/S. SHRI GANGASAGAR LAND & FINANCE CO., DEWAS PAN AABFG 0251 A . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT ITA NO. 369/IND/2011 A.Y. 2008-09 M/S. SHRI GANGASAGAR LAND & FINANCE CO., DEWAS PAN AABFG 0251 A . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT 3 IT(SS)A NOS. 197 & 198/IND/2011 A.YS. - 2006-07 & 2007-08 ANILKUMAR AGRAWAL, DEWAS PAN AEIPA 8838 A . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT ITA NO. 368/IND/2011 A.Y. 2008-09 ANILKUMAR AGRAWAL, DEWAS PAN AEIPA 8838 A . APPELLANT VS. ACIT-1(1), UJJAIN . RESPONDENT APPELLANTS BY : S/SH. S.S. DESHPANDE & R.P. MANDOV ARA RESPONDENT BY : S/SH. KESHAVE SAXENA & ARUN DEWAN DATE OF HEARING : 22.3.2012 DATE OF PRONOUNCEMENT : 27.3.2012 O R D E R PER BENCH THIS BUNCH OF FIFTEEN APPEALS IS BY DIFFERENT ASSES SES CHALLENGING DIFFERENT ORDERS OF COMMISSIONER OF INC OME TAX (APPEALS), UJJAIN, ON THE COMMON GROUND THAT THE LE ARNED FIRST APPELLATE AUTHORITY ERRED IN CONFIRMING THE DISALL OWANCE OF CONTRACTUAL PAYMENT MADE BY THE ASSESSING OFFICER A ND FURTHER SUSTAINING THE ADDITION U/S 40A(3) OF THE ACT. 4 2. DURING HEARING OF THESE APPEALS, THE LEARNED COU NSEL FOR THE ASSESSEE, SHRI S.S. DESHPANDE, CONTENDED THAT T HE STATEMENTS OF TWO CONTRACTORS, VIZ. MANOJ WAGDE AND LAXMINARAYAN WERE RECORDED U/S 132(4) AND OF OTHER TWO CONTRACTORS U/S 131 AND 131(A) RECORDED BEHIND THE BACK OF THE ASSESSEE IN WHICH THEY ALLEGEDLY DENIED HAVING WORKED AS CONTRACTOR. IT WAS EMPHATICALLY SUBMITTED THAT THE VERY NEXT DAY THESE PERSONS RETRACTED THE STATEMENTS BY FILIN G AN AFFIDAVIT DATED 30.1.08 CONFIRMING THAT THEY WORKED FOR THE ASSESSEE AND RECEIVED THE PAYMENTS. A PLEA WAS ALSO RAISED THAT ALL THE FOUR CONTRACTORS WERE PAID THROUGH CHE QUE AND THEY FILED THEIR RESPECTIVE RETURNS PRIOR TO SEARCH DECLARING THE CONTRACTUAL RECEIPTS BY SHOWING THE PROFITS AT 8% A ND THE TDS WAS ALSO DEDUCTED. IT WAS ALSO SUBMITTED THAT ALL THESE CONTRACTORS WERE PRODUCED FOR EXAMINATION/CROSS-EXA MINATION BEFORE THE ASSESSING OFFICER AND THEY CATEGORICALLY ACCEPTED HAVING WORKED WITH THE ASSESSEE. MR. DESHPANDE FUR THER SUBMITTED THAT DURING THE COURSE OF SEARCH, THE ASS ESSEE SURRENDERED AN AMOUNT OF RS.1,04,00,000/- IN THREE CASES ON ACCOUNT OF INCREASE IN VALUATION OF CLOSING STOCK I N LAND DEVELOPMENT ACCOUNT AND FURTHER THE ASSESSEE OFFERE D RS. 5 1,14,00,000/- IN THE RETURN ON THIS ACCOUNT, THEREF ORE, DISALLOWANCE OF CONTRACTUAL PAYMENT WAS ARGUED TO B E ARBITRARY AND HENCE UNJUSTIFIED. THE CRUX OF ARGUME NTS IS THAT THE SURRENDERED AMOUNT ALSO COVERS THE DISALLOWABLE EXPENDITURE, UNEXPLAINED ENTRIES AND OTHER ADDITION S AND WHATEVER ACCRUED AS INCOME TO THE ASSESSEE WAS OFFE RED AS INCOME, CONSEQUENTLY, ANY DISALLOWANCE WOULD RESULT INTO DOUBLE ADDITION. THE LEARNED COUNSEL FOR THE ASSESS EE PLACED RELIANCE UPON THE DECISION IN 339 ITR 351 (GUJ) AND 132 ITD 60 (MUM). 2.1 ON THE OTHER HAND, THE LEARNED CIT DR, SHRI KES HAV SAXENA, ALONG WITH SHRI ARUN DEWAN, STRONGLY DEFEND ED THE ADDITION BY SUBMITTING THAT FIRSTLY WHILE RECORDING THE STATEMENT OF THE ALLEGED CONTRACTORS, THEY SPECIFIC ALLY DENIED HAVING WORKED FOR THE ASSESSEE AND SECONDLY THERE W AS NO BILL OR VOUCHER OF ALLEGED CONTRACTORS FOR THE EXPENDITU RE, THEREFORE, ONUS LIES ON THE ASSESSEE TO PRODUCE THE POSITIVE M ATERIAL. ON QUESTIONING FROM THE BENCH REGARDING COMPLETION OF WORK BY THE ASSESSEE, THE LEARNED CIT DR FAIRLY AGREED THAT THE CONSTRUCTION WORK WAS DONE BUT QUICKLY ADDED WHO DI D THE WORK IS NOT KNOWN. RELIANCE WAS PLACED UPON THE DEC ISION IN 6 250 ITR 575 (DEL) AND 256 ITR 701 (AP). ON RETRACT ION OF STATEMENT, RELIANCE WAS PLACED ON THE DECISION IN T HE CASE OF MANHARLAL KASTURCHAND CHOKSHI VS. ACIT, 61 ITD 55 ( AHD) AND 207 CTR 196 (DEL). A PLEA WAS ALSO RAISED THAT EVE N U/S 44AD OF THE ACT, THE ASSESSEE IS HAVING A GOOD CASE. 2.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BR IEF, ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL- CUM-BUSINESS PREMISES OF SHRI RAMESHKUMAR AGRAWAL, DEWAS, WHERE BOOKS OF ACCOUNTS OF BUSINESS CONCERNS, VIZ. M/S SHIVSHAKTI LAND & FINANCE COMPANY, M/S ANAND LAND & FINANCE COMPANY; M/S SHRI GANGASAGAR LAND & FINANC E COMPANY AND ANIL KUMAR AGRAWAL, WERE FOUND AND SEIZ ED. A NOTICE U/S 153C OF THE ACT WAS ISSUED TO ALL THREE BUSINESS CONCERNS FOR THE ASSESSMENT YEARS 2002-03 TO 2007-0 8 AND ASSESSMENT U/S 153C OF THE ACT WAS FRAMED BY ACIT-1 (1), UJJAIN. IN THE CASE OF ANIL KUMAR AGRAWAL, NOTICE U/S 153A OF THE ACT WAS ISSUED FOR THE ASSESSMENT YEAR 2002-03 TO 2007- 08 AND THUS ASSESSMENT WAS FRAMED. A RETURN OF IN COME FOR THE ASSESSMENT YEAR 2008-09 WAS FILED U/S 139 AND 7 ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT. COPIE S OF THE RETURNS HAVE BEEN MADE PART OF THE RESPECTIVE PAPER BOOK. 2.4 THE ASSESSEES DEVELOPED DIFFERENT COLONIES AT D EWAS AND WERE WORKING AS A COLONIZERS . THE ASSESSEE CLAIME D THAT THESE COLONIES WERE DEVELOPED BY DIFFERENT CONTRACTORS, N AMELY, SHRI MANOJ WAGDE, LALSINGH JADONE, AJAY AGRAWAL AND MR. LAXMINARAYAN AGRAWAL AND FURTHER CLAIMED THAT PAYME NT TO THESE CONTRACTORS WERE MADE THROUGH CHEQUE FOR THE CONTRACTUAL WORK DONE BY THEM AND THESE PAYMENTS WE RE SUBJECTED TO TDS U/S 194C OF THE ACT. THE LEARNED C OUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT NECESSARY RETURNS OF TDS WERE FURNISHED AND TDS CERTIFICATES WERE DULY ISSUE D TO THE RESPECTIVE RECIPIENTS FOR WHICH OUR ATTENTION WAS I NVITED TO VARIOUS PAGES OF THE PAPER BOOK FILED BY THE ASSESS EE. WE FIND THAT THE RESPECTIVE STATEMENTS OF THE CLAIMED CONTR ACTORS WERE RECORDED UNDER SECTION 132 ON 29.1.2008 BY THE OFFI CERS OF THE DEPARTMENT (COPIES OF STATEMENTS ARE AVAILABLE AT P AGES 16 TO 21 AND 57 TO 64 OF THE PAPER BOOK). THE STATEMENT OF LALSINGH JADONE WAS RECORDED U/S 131(1A) AND THAT OF SHRI AJ AY AGRAWAL U/S 131 ON 29.1.2008 (PAPER BOOK PAGES 109 TO 112 AND 153 TO 157). STATEMENT OF SHRI MANOJ WAGDE & 8 LAXMINARAYAN WAS RECORDED U/S 132(4) OF THE I.T. AC T. WE FURTHER FIND THAT SHRI MANOJ WAGDE, LALSINGH JADONE , AJAY AGRAWAL AND LAXMINARAYAN AGRAWAL FILED THEIR AFFIDA VITS DATED 30.1.2008 ON 1.2.2008 IN THE OFFICE OF THE ADIT RET RACTING FROM THEIR EARLIER STATEMENTS TENDERED BEFORE THE DEPART MENT BY FURTHER STATING THAT THEY WORKED FOR THE RESPECTIVE ASSESSEES AND RECEIVED THE PAYMENTS (PAPER BOOK PAGES 21A TO 23), 65 TO 67, 113 TO 115 AND 158 TO 160). DURING HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THESE CON TRACTORS FILED THEIR RETURNS UNDER SECTION 139(153A) SHOWING THE CONTRACTUAL INCOME AND FURTHER CLAIMED THE TAX CRED IT BY FILING THE TDS CERTIFICATE WHICH WERE ACCEPTED BY THE DEPA RTMENT (PAPER BOOK PAGES 34 TO 56, 74 TO 108, 122 TO 152 A ND 169 TO 197). THE STAND OF THE ASSESSEE IS THAT NO ADDITIO N CAN BE MADE SIMPLY ON THE BASIS OF STATEMENT RECORDED BY T HE DEPARTMENT ESPECIALLY WHEN THE STATEMENTS WERE RETR ACTED AT THE EARLIEST POSSIBLE OCCASION. THE STAND OF THE L EARNED CIT DR IS THAT FIRSTLY THE RETRACTION IS AN AFTER-THOUG HT AT THE BEHEST OF THESE ASSESSES AND THESE AFFIDAVITS DO NO T DEPICT THE TRUE STATE OF AFFAIRS WHEREAS IN COUNTER REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THAT THE AFFIDA VITS WHICH 9 WERE FILED IMMEDIATELY ON THE NEXT DAY CANNOT BE BR USHED ASIDE AS THEIR STATEMENTS WERE RECORDED UNDER DURES S AND THREAT. IN VIEW OF THESE FACTS, WE ARE SUPPOSED TO APPRAISE THE AUTHENTICITY/EVIDENTIARY VALUE OF THE STATEMENT AND THE IMMEDIATE RETRACTION BY THE CONTRACTORS WITH THE HE LP OF AFFIDAVITS. IF THE STATEMENTS RECORDED BY THE OFFI CERS AND THE AFFIDAVITS ARE KEPT IN JUXTAPOSITION AND CUMULATIVE LY APPRECIATED, FOLLOWING FACTS ARE OOZING OUT :- (I) UNCONTROVERTEDLY THE CONTRACTUAL WORK LIKE LAYING O F ROADS, DRAINAGE LIKE, WATER LINE, WIRE FENCING, BORE-WELL, PULIA, E TC. WERE DONE BY THE ASSESSEES EITHER THEMSELVES OR THROUGH CONTRACTORS (II) THE CONTRACTUAL PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES BY DEDUCING THE TDS. (III) RETURNS WERE FILED BY THE RESPECTIVE CONTRACTOR BY SHOWING THE CONTRACTUAL RECEIPTS AND TDS CERTIFICATES ISSUED BY THE ASSESSEE AND THE SAME WERE ACCEPTED BY THE DEPARTMENT. (IV) WHILE RECORDING THE STATEMENT, THEY DENIED HAVING D ONE ANY CONTRACTUAL WORK AS HAS BEEN CLAIMED BY THE ASSESSE E WHICH WAS ON THE NEXT DAY ITSELF RETRACTED WITH THE HELP OF A FFIDAVITS. NOW THE QUESTION ARISES WHETHER THE RECORDED STATEM ENT WHICH WAS RETRACTED IMMEDIATELY AT THE FIRST OCCASION CAN OVER- SHADOW THE DOCUMENTARY EVIDENCES. IN OUR HUMBLE OP INION, UNDER THE FACTS STATED HEREINABOVE, THE STATEMENT C ANNOT OVERSHADOW THE DOCUMENTARY EVIDENCE LIKE PAYMENT OF CONTRACTUAL AMOUNT THROUGH CHEQUE, DECLARATION OF T HE CONTRACTUAL AMOUNT IN THE RESPECTIVE RETURNS BY THE 10 CONTRACTORS AND ACCEPTANCE THEREOF BY THE DEPARTMEN T. THE DEPARTMENT IS HEAVILY RELYING UPON THE STATEMENT RE CORDED FROM THESE CONTRACTORS AND CONSEQUENT ADDITIONS BAS ED UPON THEIR STATEMENTS. WE FEEL PRESUMPTION CANNOT TAKE SHAPE OF EVIDENCE HOWSOEVER STRONG IT MAY BE ESPECIALLY WHEN THE STATEMENT WAS RETRACTED AT THE FIRST OPPORTUNITY TH ROUGH AFFIDAVITS AND THE FACT THAT THE WORK WAS ACTUALLY DONE. IN SUPPORT ITS CLAIM, THE ASSESSEE ALSO FURNISHED SO M ANY PHOTOGRAPHS OF THE WORK DONE IN THESE COLONIES. EV EN OTHERWISE, THE DEPARTMENT HAS ALSO NOT DISPUTED THA T WORK WAS DONE BY THE ASSESSES. THE ONLY DISPUTE IS WHO DID T HIS WORK. EVEN IN THE ASSESSMENT ORDER IT HAS BEEN ADMITTED B Y THE ASSESSING OFFICER THAT MERELY 10% OF THE TOTAL VOUC HERS/BILLS WERE SUBMITTED BY THE ASSESSEE. THE DETAILS ARE SU MMARISED AS UNDER :- SHIVSHAKTI LAND & FINANCE S NO AY RETURNED DEEMED REQUIRED ADDITION DIFFERENCE INCOME PROFIT @ 8 ADDITION SUSTAINED (E - I) ADDING OF SALES (D - E) BY CIT (AI PARTNERS INTEREST & ANNEXURE REMUNERA COLUMN A B C D E F Q 1 2004 - 05 61889 920980 302090 260000 42090 2 2005 - 06 49344 457096 - 36351 611329 - 647680 3 2006 - 07 37391 259616 - 114295 261626 - 375921 4 2007 - 08 43104 357040 - 74006 400225 - 474231 5 2008 - 09 7277981 1 7727 - 6080254 4070495 - 10150749 11 GANGASAGAR LAND & FINANCE CO, S AY RETURNED DEEMED REQUIRED ADDITION DIFFERENC INCOME PROFIT @ 8 ADDITION SUSTAINE (E - I) ADDING OF SALES (D - E) BY CIT PARTNERS PE INTEREST & ANNEXURE REMUNERAT COLUMN (I) A B C D E F Q 1 2006 - 07 520989 39652 - 258241 - 2 2007 - 08 1144662 76404 - 350270 - 3 2008 - 09 4145343 55888 - 3586463 1334978 - 4921441 ANAND LAND & FINANCE CO. S NO AY RETURNED DEEMED REQUIRED ADDITION DIFFERENC E INCOME PROFLT@ 8 ADDITION SUSTAINE (E - I) ADDING OF SALES (D - C) BY CIT PARTNERS PE INTEREST & ANNEXURE REMUNERAT COLUMN (I) A B C D E F 9 1 2004 - 05 179019 10032 - 78699 95000 - 173699 2 2005 - 06 155854 12188 - 33974 242730 - 276704 3 2006 - 07 87782 60068 - 27714 138790 - 166504 4 2008 - 09 1985324 74240 - 1911084 495000 - 2406084 ANILKUMAR AGRAWAL S NO AY NET INCOME DEEMED REQUIRED ADDITION DIFFERENC E FROM LAND PROFLT@ 8 ADDITION SUSTAINE (E - I) DEVELOPME OF SALES (D - E) BY CIT SALES PE AS PER ANNEXURE (G) OF COLUMN ANNEXURE (I) A B C D E F 9 1 2006 - 07 10551 62880 - 120450 - 163085 2 2007 - 08 12492 24760 - 240030 - 340198 3 2008 - 09 18970 26064 70933 2100000 - 2029067 12 2.5 SO FAR AS THE CASES RELIED UPON BY THE RESPECT IVE LEARNED COUNSELS ARE CONCERNED, SINCE WE ARE DECIDI NG THESE APPEALS ON THE BASIS OF FACTUAL ASPECTS, THER EFORE, WE ARE REFRAINING OURSELVES TO GO INTO DETAILS OF C ASE LAWS CITED BEFORE US. 2.6 IF THE TOTALITY OF FACTS IS ANALYSED, UNDISPUT EDLY THE PICTURE IS CLOUDY AS TO WHO DID THE WORK AND TH E COMPLETE BILLS/VOUCHERS WERE NOT PRESENTED AT ANY S TAGE BY THE ASSESSEE. THE PICTURE BECAME FURTHER CLOUDY BY TENDERING OF STATEMENTS U/S 132(4) OF THE I.T. ACT BY THE ALLEGED CONTRACTORS DENYING HAVING DONE ANY WORK BU T THE FACT REMAINS THAT THE WORK WAS DONE IN THE COLO NIES, THEREFORE, KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE, INTEREST OF BOTH THE PARTIES UNDER THE FACTS NARRAT ED HEREINABOVE, SINCE UNVOUCHED EXPENDITURE WAS DEBITE D TO THE BOOKS OF ACCOUNTS AND THE PROFIT WAS ARRIVED AT AFTER DEDUCTING ALL SUCH EXPENDITURE WHICH WERE DEN IED BY THE RESPECTIVE SUB-CONTRACTOR WHO HAVE ALLEGED T O UNDERTAKE SUCH CONSTRUCTION WORK, WE ARE OF THE 13 CONSIDERED VIEW THAT SUCH BOOK RESULTS CANNOT BE TR EATED AS RELIABLE, THEREFORE, WE REJECT THE BOOK PROFIT D ISCLOSED BY THE ASSESSEE. AT THE SAME TIME, WE ALSO FIND THA T THE ASSESSEE IS A WORK CONTRACTOR AS IS EVIDENCED BY TH E MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO ME NTION HERE THAT SUBSTITUTION WAS MADE IN SEC. 44AD OF THE ACT BY THE FINANCE (NO.2) ACT 2009 W.E.F. 1.4.2011 AND PRIOR TO ITS SUBSTITUTION, SEC. 44AD, AS INSERTED BY THE FINANCE ACT 1994, W.E.F. 1.4.1994 AND LATER ON AMENDED BY T HE FIANCE ACT 1997, W.R.E.F. 1.4.1994/W.E.F. 1.4.1997 INCOME-TAX (2 ND AMENDMENT) ACT 1997 W.R.E.F. 1.4.1997 AND FINANCE ACT 1999 W.R.E.F. 1.4.1998, THE SEC. RE AD AS UNDER: 44AD SPECIAL PROVISION FOR COMPUTING PROFIT AND GA INS OF BUSINESS OF CIVIL CONSTRUCTION ETC.: (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SEC. 28 TO 43C, IN THE SUM EQUAL TO EIGHT PER CENT OF THE TOTAL TURNOVER OR GROSS RECEI PT OF THE ASSESSEE INTHE PREVIOUS YEAR ON ACCOUNT OF SUCH BUSINESS OR, AS THE CASE MAY BE, A SUM HIGHER THAN THE AFORESAID SUM CLAIMED TO HAVE BEEN EARNED BY THE ELIGIBLE ASSESSEE, SHALL BE DEEMED TO BE THE PROFIT AND GAINS OF SUCH 14 BUSINESS CHARGEABLE TO TAX UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION. IN THE PRESENT APPEALS, THE ASSESSMENT YEARS ARE FR OM 2004-05 TO 2008-09, THEREFORE, THE AFORESAID PROVIS ION WILL BE APPLICABLE BECAUSE THE SUBSTITUTION WAS MAD E W.E.F. 1.4.2011, CONSEQUENTLY, IN VIEW OF THE CLEAR CUT PROVISION AND ESPECIALLY WHEN THE BOOKS OF ACCOUNTS WERE UNRELIABLE AND CONSEQUENTLY REJECTED, THEREFOR E, WE DIRECT THE LEARNED ASSESSING OFFICER TO RECOMPUTE T HE PROFIT OF THE ASSESSEE BY TAKING NET PROFIT RATE AT 8% OF THE GROSS RECEIPTS BECAUSE EVEN IF THE ASSESSEE DOE S NOT MAINTAIN BOOKS OF ACCOUNTS AND AS PER SEC. 44AD OF THE ACT, THE PROFIT RATE OF 8% HAS BEEN SPECIFICALLY PR OVIDED IN THE ACT, WE ARE MAKING IT CLEAR THAT IF THE ASSESSE E HAS ALREADY SHOWN THE NET PROFIT RATE MORE THAN 8% THEN THE NET PROFIT SHOWN BY THE ASSESSEE SHALL PREVAIL. HOW EVER, THE PARTNERS REMUNERATION AND INTEREST PAID TO THE PARTNERS IS DIRECTED TO BE ALLOWED AS PER LAW. THE DECLARATION OF INCOME MADE BY THE ASSESSEE AT THE T IME OF SEARCH IS NOTHING TO DO WITH THE TRADING ADDITION M ADE BY 15 THE ASSESSING OFFICER DURING ASSESSMENT U/S 153C, THEREFORE, NO CREDIT IS REQUIRED TO BE GIVEN FOR TH E DECLARATION MADE WHILE COMPUTING PROFIT AT 8% OF TH E GROSS RECEIPTS. IN THIS VIEW OF THE MATTER, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF PAYMENT TO CONTRACTORS FOR CONSTRUCTION OF ROADS, SEWERAGES, ETC. OUT OF WHICH PART DISALLOWANCE WAS SUSTAINED BY COMMISSIONER OF INCOME TAX (APPEALS) I S HEREBY SET ASIDE. SINCE NO OTHER GROUND WAS ARGUED SO WE ARE NOT MAKING ANY COMMENTS ON THEM. IN THE RESULT, THE APPEALS ARE DISPOSED OF IN TERM S INDICATED HEREINABOVE. ORDER WAS PRONOUNCED IN OPEN COURT ON 27 TH MARCH, 2012. SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27.3.2012 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR DN/-
