DCIT CENTRAL CIRCLE-, Ranchi V. M/s Rajput Ventures Pvt Ltd, Ranchi

ITSSA 83/RAN/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3789 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2016
• 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; Documents seized

Judgement Text

1 ITA NO. 65,66,70&83 /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 ITA NO. 65 & 66 /RAN/201 6 A .Y. : 20 09 - 2010 & 2010 - 2011 M/S RAJPUT VENTURES PVT LTD 101,201,202, SHRI GANESH AP ARTMENT, PASE - II, BARIATU ROAD, RANCHI - 834008 V S DCIT, CENTRAL CIRCLE - 3, RANCHI P AN NO. : A A DCB 8790 C (APPELLANT ) . RESPONDENT AND ITA NOS.70 & 83/RAN/2016 A.Y. : 2009 - 2010 & 2010 - 2011 DCIT, CENTRAL CIRCLE - 3, RANCHI V S M/S RAJPUT VENTURES PVT LTD 101 ,201,202, SHRI GANESH APARTMENT, PASE - II, BARIATU ROAD, RANCHI - 834008 P AN NO. : AADCB 8790 C (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 : 23.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH ESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT(A) - 3 , PATNA , DATED 22.08.2016 & 07.09.2016 , FOR THE ASSESSMENT YEAR 2009 - 2010 & 2010 - 2011 . 2 ITA NO. 65,66,70&83 /RAN/ 201 6 2. FIRST WE SHALL DECIDE APPEALS FOR ASSESSMENT YEARS 2009 - 2010 & 2010 - 2011 IN ITA NOS.65&66/CTK/2016. SINCE ALL THE APPEALS ARE INTERCONNECTED AND THE ISSUES INVOLVED ARE COMMON, THEREFORE, WE THINK IT APPROPRIA TE TO CONSIDER THE FACTS AND GROUNDS NARRATED IN ITA NO. 65 /RAN/201 6 , WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1 . FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING AN ESTIMATE @ 10% OF CONTRACT WORK EXECUTED BY THE APPELLANT. APPELLANT DISCLO SED NET PROFIT OF RS.24,25,850/ - AS PER AUDITED PROFIT &. LOSS A/C WHEREAS LD. CIT(A) ESTIMATED NET PROFIT OF RS.34,39,185/ - BEING 10% OF THE GROSS RECEIPT. THE PROFIT DISCLOSED WAS REASONABLE, AS SUCH, ESTIMATE OF PROFIT MADE BY LD. A.O. WAS UNJUSTIFIED A ND ILLEGAL. 2 . FOR THAT THE ORDER WAS PASSED U/S 153C/143(3). LD. A.O. DID NOT RECORD REASONS FOR INITIATION OF PROCEEDINGS U/S 153C IN THE CASE OF SRI ABHISHEK SINGH AGAINST WHOM SEARCH AND SEIZURE OPERATION WAS CARRIED OUT. 3 . FOR THAT THE ESTIMATED ADDITION MADE WAS NOT BASED ON ANY SEIZED DOCUMENTS WHICH MAY HAVE BEEN SEIZED FROM THE POSSESSION OF SRI ABHISHEK SINGH, DIRECTOR OF THE COMPANY. THERE IS NO REFERENCE TO ANY SUCH SEIZED DOCUMENTS, AS SUCH, ESTIMATED ADDITION MADE IS ILLEGAL, UNJUSTIFIED AND FIT TO BE DELETED. 4 . 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. 5 . FOR THAT OTHER GROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. THE A SSESSEE IN APPEAL FOR ASSESSMENT YEAR 2010 - 2011 HAS RAISED THE FOLLOWING GROUNDS : - 1. FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING AN ESTIMATE @ 10% OF CONTRACT WORK EXECUTED BY THE APPELLANT. APPELLANT DISCLOSED NET PROFIT OF RS.70,07,550/ - WHICH WAS 19.44% OF THE CONTRACT RECEIPT. LD. A.O. ESTIMATED PROFIT FROM CONTRACT @ 20% OF THE NET RECEIPT. THE PROFIT ESTIMATED BY LD. A.O. WAS RS.72,10,124/ - WHEREAS PROFIT DISCLOSED BY THE APPELLANT WAS RS.70,07,550/ - . 3 ITA NO. 65,66,70&83 /RAN/ 201 6 2. FOR THAT THE APPELLANT HAS SHOWN CONT RACT TURNOVER OF RS.3,60,50,621/ - WHICH WAS ACCEPTED BY LD. A.O. HOWEVER, LD. CIT(A) WAS OF THE VIEW THAT EXPENSE OF RS.1,35 CRORES DEBITED IN THE ACCOUNT OF CONTRACT EXPENDITURE WAS NOT ADMISSIBLE AS THIS EXPENSE WAS NOT PERTAINING TO THE BUSINESS OF CONT RACT. LD. CIT(A) HELD THAT THIS PAYMENT OF RS.1.35 CRORES WAS COMMISSION RECEIVED BY SRI ABHISHEK SINGH FROM THE PRINCIPALS M/S IVRCL LTD. WHO HAD TAKEN CONTRACT FOR ELECTRIFICATION OF THE VILLAGES. BASED ON STATEMENT OF SRI D.K. SRIVASTAVA OF M/S IVRCL LT D., IT WAS HELD BY LD. CIT(A) THAT RS.1.35 CRORES WAS PAID TO SRI ABHISHEK SINGH BY INFLATING THE CONTRACT PAYMENT. 3. FOR THAT THERE IS NO BASIS WHATSOEVER FOR ENHANCING THE INCOME OF THE APPELLANT BY RS.1.35 CRORES AND REDUCING THE CONTRACT TURNOVER BY THE IDENTICAL AMOUNT TO DETERMINE THE GENUINE TURNOVER ON WHICH PROFIT OF 10% WAS ESTIMATED BY LD. C I T(A). 4. FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN ENHANCING THE PROFIT AT RS. 1,57,55,062/ - AGAINST ESTIMATE OF PROFIT BY LD. A.O. AT RS.72,10,124/ - . THER E WAS NO REASON OR BASIS FOR MAKING THIS ENHANCEMENT. THERE WAS NO DOCUMENT WHATSOEVER FOR MAKING THIS ENHANCEMENT. THE ADDITION MADE BY ENHANCEMENT OF PROFIT BY LD. CIT(A) IS ILLEGAL AND INCORRECT. EVEN ESTIMATE BY LD. A.O. WAS UNJUSTIFIED AND ILLEGAL. 5 . FOR THAT THE ORDER WAS PASSED U/S 153C/143(3). LD. A.O. DID NOT RECORD REASONS FOR INITIATION OF PROCEEDINGS U/S 153C IN THE CASE OF SRI ABHISHEK SINGH AGAINST WHOM SEARCH AND SEIZURE OPERATION WAS CARRIED OUT. 6. FOR THAT THE ESTIMATED ADDITION MADE WA S NOT BASED ON ANY SEIZED DOCUMENTS WHICH MAY HAVE BEEN SEIZED FROM THE POSSESSION OF SRI ABHISHEK SINGH, DIRECTOR OF THE COMPANY. THERE IS NO REFERENCE TO ANY SUCH SEIZED DOCUMENTS, AS SUCH, ESTIMATED ADDITION MADE IS ILLEGAL, UNJUSTIFIED AND FIT TO BE DE LETED. 7. FOR THAT THE APPELLANT WAS LIABLE TO PAY INTEREST ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME FOLLOWING THE DECISION OF HONBLE JHARKHAND HIGH COURT. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONTR ACT & 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 4 ITA NO. 65,66,70&83 /RAN/ 201 6 SAME, PROCEEDING U/S.153C OF THE ACT WAS INITIATED IN THE A SSESSEES CASE. IN RESPONSE TO NOTICE U/S.153C OF THE ACT, THE ASSESSEE FILED RETURN OF INCOME WITH TOTAL INCOME OF RS. 24,25,848/ - .THEREAFTER THE AO COMPLETED THE ASSESSMENT ESTIMATING INCOME @20% OF THE TURNOVER OF RS.3,43,91,847/ - AND MADE ADDITION OF RS .69,43,469/ - FOR THE ASSESSMENT YEAR 2009 - 10. SIMILARLY THE AO ESTIMATED THE INCOME @ 20% OF THE TOTAL TURNOVER OF RS.3,60,50,621/ - AND MADE ADDITION OF RS.72,10,124/ - FOR THE ASSESSMENT YEAR 2010 - 2011, ALONG WITH OTHER ADDITIONS , PASSED THE ORDER U/S.153C /143(3) THE ACT. 4 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS LD. AR OF THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS AND LD.CIT(A) HAVING CONSIDERED THE FINDINGS AND THE SUBMISSIONS OF THE ASSESSEE DEALT ON THE DISPUTED ISSUES AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 6 . 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. 3,43,91,847/ - AND MADE AD DITION OF RS. 69,43,469/ - FOR THE ASSESSMENT YEAR 2009 - 10 . SIMILARLY THE AO ESTIMATED THE INCOME AT 20% OF THE TOTAL TURNOVER OF RS. 3,60,50,621/ - AND MADE ADDITION OF RS.72,10,124/ - FOR THE 5 ITA NO. 65,66,70&83 /RAN/ 201 6 ASSESSMENT YEAR 2010 - 2011 . LD.AR FURTHER SUBMITTED THAT THE A.O. DI D NOT RECORD REASONS FOR INITIATION OF PROCEEDINGS U/S 153C IN THE CASE OF SRI ABHISHEK SINGH AGAINST WHOM SEARCH AND SE IZURE OPERATION WAS CARRIED OUT AND ESTIMATED ADDITION MADE WAS NOT BASED ON ANY SEIZED DOCUMENTS WHICH MAY HAVE BEEN SEIZED FROM THE PO SSESSION OF SRI ABHISHEK SINGH, DIRECTOR OF THE COMPANY. THERE IS NO REFERENCE TO ANY SUCH SEIZED DOCUMENTS, AS SUCH, ESTIMATED ADDITION SHOULD BE DELETED. 7 . CONTRA, LD. D R SUPPORTED THE ORDER S OF LOWER AUTHORITIES . 8 . WE HAVE HEARD THE RIVAL SUBMISSION S 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), THE ASSESSEE HAS NOT RAISED THIS GROUND BEFORE THE CIT( A ) AND FIRST TIME IT HAS BEEN RAIS ED 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 DISPUTED ISSUE TO THE FILE OF CIT(A), THEREFORE, OTHER GROUNDS OF APPEAL ARE ALSO REMITTED TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION. ACCORDINGLY, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION ARE ALLOWED FOR STATISTICAL PURPOSES. 9 . NOW, WE SHALL TAKE UP THE APPEALS OF REVENUE FOR THE ASSESSMEN T YEARS 2009 - 2010 & 2010 - 2011 IN ITA NOS.70&83/RAN/2016, WHEREIN THE REVENUE IS AGGRIEVED FOR THE DELETION OF ADDITION BY THE CIT(A). SINCE WE HAVE REMITTED THE APPEALS OF THE ASSESSEE ON THE ISSUE OF CHALLENGING THE 6 ITA NO. 65,66,70&83 /RAN/ 201 6 PROCEEDINGS U/S.153C OF THE ACT, WHICH WAS NOT RAISED BEFORE THE CIT(A) AND THE SAME HAS BEEN RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL, THEREFORE, ON THE SAME REASONING GIVEN IN APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2009 - 2010 & 2010 - 2011 IN ITA NO.65&66/RAN/2016 , WE REMIT THE GR OUNDS OF APPEAL TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION. ACCORDINGLY, THE GROUNDS OF APPEAL RAISED BY THE REVENUE FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION ARE ALLOWED FOR STATISTICAL PURPOSES. 10 . IN THE RESULT, APPEAL S OF THE ASSESSEE AND RE VENUE ARE 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 23 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE AP PELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.