M/S Rajput Construction, Ranchi V. DCIT CENTRAL CIRCLE-3, Ranchi

ITSSA 64/RAN/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3792 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 18-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SUTARIYA CITA JSR
• Assessee Lawyers: S K PODDAR; DEVESH PODDARADV
• Keywords: Rejection of books of accounts; Search and seizure; Document seized; Assessment record; Documents seized

Judgement Text

1 IT (SS) A NO. 64 /RAN/ 201 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER IT (SS) A NO. 64 /RAN/201 6 A .Y. : 20 08 - 20 09 M/S RAJPUT CONSTRUCTION, HARIHAR SINGH ROAD, MORABADI, RANCHI - 834008 V S DCIT, CENTRAL CIRCLE - 3, RANCHI P AN NO. : A AKFR 3440 H (APPELLANT ) . RESPONDENT ASSESSEE BY : SHRI S.K.PODDAR & DEVESH PODDAR,ADV REVENUE BY :SHRI D.K.SUTARIYA , CIT(A), JSR DATE OF HEARING : 2 2 . 05 .201 8 DATE OF PRONOUNCEMENT : 2 3.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 3 , PATNA , DATED 22.08.2016 , FOR THE ASSESSMENT YEAR 2008 - 09 , WHEREIN THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL : - 1 . FOR THAT THE ORDER PASSED U/S 153C WAS ILLEGAL AND UNJUSTIFIED. THERE IS NO REFERENCE TO ANY SEIZED DOCUMENT WHICH WAS FOUND DURING SEARCH AND SEIZURE OPERATION AGAINST SRI ABHISHEK SINGH, ONE OF THE PARTNERS OF THE FIRM. NO SATI SFACTION WHATSOEVER WAS RECORDED IN THE ASSESSMENT RECORD OF SRI ABHISHEK SINGH GIVING REFERENCE TO ANY OF THE SEIZED DOCUMENTS ON THE BASIS OF WHICH PROCEEDINGS U/S 153C WAS TO BE INITIATED. THE ORDER PASSED U/S 153C THEREFORE WAS AB - INITIO VOID, ILLEGAL AND INCORRECT. 2 . FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN MAKING AN ESTIMATE OF INCOME FROM CONTRACT BUSINESS @ 10% OF THE GROSS RECEIPT DISCLOSED BY THE APPELLANT. THERE IS NO SCOPE OF MAKING ANY ADDITION ON ESTIMATE IN AN ORDER PASSED U/S 153C. 2 IT (SS) A NO. 64 /RAN/ 201 6 3 . FOR THAT T HERE WAS NO REASON OR BASIS FOR NOT ALLOWING THE REMUNERATION AND INTEREST TO PARTNERS. THE FINDING OF LD. A.O. IS MISPLACED, AS SUCH, DISALLOWANCE OF INTEREST AND REMUNERATION TO PARTNERS IS ILLEGAL AND UNJUSTIFIED. 4 . FOR THAT THE ADDITION OF RS.82,510/ - ON THE GROUND THAT M/S IVRCL INFRASTRUCTURES AND PROJECT LTD. DEBITED THIS AMOUNT REPRESENTING FLIGHT TICKETS AMOUNTING TO RS.49,752/ - ON 31.03.2008 AND WRONG DEBIT OF CONSTRUCTION TRANSACTION OF RS.30,717/ - WAS SHOWN ON 29.02.2008. THE TOTAL OF ADDITION WIL L BE RS.80,469/ - AGAINST RS.82,510/ - AS MADE BY LD. A.O. THE ADDITION MADE IS ILLEGAL. 5 . FOR THAT NO SUCH AMOUNT WAS RECEIVED BY THE APPELLANT AND THERE WAS NO CONCLUSIVE EVIDENCE TO SUGGEST THAT ANY SUCH AMOUNT WAS PAID TO THE APPELLANT WHICH CAN BE TREATED AS PROFIT. AS SUCH, ADDITION MADE FOR RS.82,510/ - IS ILLEGAL AND INCORRECT. 6 . FOR THAT THE APPELLANT WAS LIABLE TO PAY INTEREST ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME FOLLOWING THE DECISION OF HON'BLE JHARKHAND HIGH COURT. 7. FOR THAT OTHER G ROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SUB - CONTRACT & OTHERS. THERE WAS A SEARCH AND SEIZURE ACTION AT THE PREMISES OF SH. ABHISHEK SINGH ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY WHEREIN CERTAIN DOCUMENTS WERE SEIZED. IN CONNECTION WITH THE SAME, PROCEEDING U/S.153C OF THE ACT WAS INITIATED IN THE ASSESSEES CASE. IN RESPONSE TO NOTICE U/S.153C OF THE ACT, THE ASSESSEE FILED RETURN OF INCOME WITH TOTAL INCOM E OF RS.2,82,510/ - .THEREAFTER THE AO COMPLETED THE ASSESSMENT AND ASSESSEE THE INCOME AT RS.21,35,700/ - AND PASSED ORDER U/S.153C/143(3) OF THE ACT, DATED 28.12.2012. 3 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). I N THE APPELLATE PROCEEDINGS LD. AR OF THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS AND LD.CIT(A) 3 IT (SS) A NO. 64 /RAN/ 201 6 HAVING CONSIDERED THE FINDINGS AND THE SUBMISSIONS OF THE ASSESSEE DEALT ON THE DISPUTED ISSUES AND PARTLY ALLOWED THE APPEAL OF THE ASSESSE E. 4 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5 . BEFORE US, LD. AR SUBMITTED THAT THE ORDER PASSED BY THE CIT(A) IS ERRED IN LAW AND ALSO THE ORDER PASSED IN THE PROCEEDING U/S.153C OF THE ACT IS BAD IN LAW. LD.AR FURTHER SUBMITTED THAT THE AO HAS REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE INCOME AT 20% OF THE TURNOVER OF RS. 1,02,65,925/ - AND MADE ADDITION OF RS.20,53,185/ - AND ALSO MADE ADDITION IN RESPECT OF UNACCOUNTED RECEIPT OF ASSESSEE FIRM OF RS. 82,510/ - AND SUBMITTED THAT NO SUCH AMOUNT WAS RECEIVED BY THE ASSESSEE AND THERE WAS NO CONCLUSIVE EVIDENCE TO SUGGEST THAT ANY SUCH AMOUNT WAS PAID TO THE ASSESSEE WHICH CAN BE TREATED AS PROFIT, THEREFORE, HE PRAYED FOR ALLOWING THE APPEAL. 6 . CONTRA, LD. D R SUPPORTED THE ORDER S OF LOWER AUTHORITIES . 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON THE FIRST DISPUTED ISSUE WITH RESPECT TO CHALLENGING THE ORDER PASSED U/S.153C OF THE ACT. ON PERUSAL OF THE ORDER OF CIT(A), T HE ASSESSEE HAS NOT RAISED THIS GROUND BEFORE THE CIT( A ) AND FIRST TIME IT HAS BEEN RAISED BEFORE THE TRIBUNAL. LD. AR ALSO CONCEDED THIS FACT. THEREFORE, WE REMIT THIS DISPUTED ISSUE TO THE FILE OF CIT(A) FOR ADJUDICATION. SINCE WE HAVE RESTORED THE DISPU TED ISSUE TO THE FILE OF CIT(A), THEREFORE, OTHER GROUNDS OF APPEAL ARE ALSO REMITTED TO THE FILE OF CIT(A) FOR FRESH 4 IT (SS) A NO. 64 /RAN/ 201 6 ADJUDICATION. ACCORDINGLY, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 / 05 /201 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.