Sh. Swarn Singh Prop., V. The Income tax Officer, Ferozepur

MA 10/ASR/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8548 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Assessee Lawyers: J K GUPTA
• Keywords: Rectification of order
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER M.A. NO.10(ASR)/2012 (ARISING OUT OF I.T.A. NO.506 (ASR)/2008) ASSESSMENT YEAR:2006-07 PAN :AMLPS9618C SH. SWARAN SINGH, PROP. VS. INCOME TAX OFFICER, M/S. AZAD ENGINEERING WORKS, WARD-III(1), FEROZEPU R. FEROZEPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. J.K. GUPTA, ADV. RESPONDENT BY:SH.R.L. CHHANALIA, DR DATE OF HEARING:29/06/2012 DATE OF PRONOUNCEMENT:29/06/2012 ORDER PER BENCH ; THIS MISCELLANEOUS APPLICATION OF THE ASSESSEE ARI SES OUT OF THE ORDER OF THE ITAT, DATED 27.02.2009 PASSED IN ITA NO.506( ASR)/2008 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS FILED WRITTEN MISCELLANEOUS APP LICATION DATED 02.04.2012, WHICH FOR THE SAKE OF CLARITY IS REPROD UCED HEREUNDER: 1. THAT THE APPEAL OF THE ASSESSEE WAS DECIDED ON THE BASIS THAT THE PROVISIONS OF SECTION 44AD OF THE INCOME TAX ACT, 1 961 CAN NOT BE APPLIED, INSPITE OF THE FACT THAT GROSS TURNOVER IS RS.1125126/- FROM CONTRACT BUSINESS AS IS MENTIONED IN THE RECTIFICATION ORDER PASSED BY THE AO U/S 154/155 OF THE ACT. MA NO.10(ASR)/2012 2 IT IS POINTED OUT THAT THE ASSESSEE FILED THE RETU RN OF INCOME ON 23.06.2006 DECLARING AN INCOME OF RS.109580/- WHERE IN THE PROFIT @ 8% ON THE CONTRACT RECEIPT OF RS.913481/- WAS SHOWN BESIDE PETTY INCOME OF RS.30,000/- AND INTEREST OF RS.6500/-. THE AO ADDED RS.211642/- BEING THE DIFFERENCE IN C ONTRACT RECEIPTS SHOWN BY THE ASSESSEE FOR RATE PURPOSE. 2. THAT FIRSTLY THE PROVISIONS OF SECTION 44AD ARE CLEARLY APPLICABLE AS THE GROSS RECEIPT ARE OF RS.1125126/- BEING LESS THAN RS.40 LACS. SECONDLY AS ORIGINALLY, THE INCOME FROM CONTRACT BU SINESS WAS ESTIMATED @ 8%. SO, THE BALANCE RECEIPT SHOULD ALSO BE ASSESSED @ 8% AS THE ASSESSEE IS NOT MAINTAINING RE GULAR BOOKS OF ACCOUNT. THERE IS A DIRECT JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT REPORTED AS CIT VS. SUPREME BUILDERS 303 ITR 1 (P&H) WHICH WAS NOT BROUGHT TO THE NOTICE OF THE TR IBUNAL WHILE DECIDING THE APPEAL. IT WAS HELD IN THIS CASE THAT REGULAR BOOKS OF ACCOUNT NOT HAVING BEEN MAINTAINED AND A F LAT RATE HAVING BEEN APPLIED, THE EXTRA RECEIPT BY THE ASSES SEE DESERVED THE SAME TREATMENT AS OTHER PAYMENTS. IT IS, THEREFORE, A MISTAKE APPARENT FROM THE RECOR D WHICH MAY KINDLY BE RECTIFIED. RELIANCE IS PLACED ON CIT VS. MOHAN LAL KANSAL 114 ITR 583 (P&H) WHERE IN IT WAS HELD THAT INCOME TAX AUTHORITIES SITUATED WITHIN JURISDICTION OF A P ARTICULAR HIGH COURT ARE BOUND BY ITS DECISION. THEREFORE, IN THE PRESENT CASE, IT COULD NOT BE SAID THAT THE MISTAKE WAS NOT APPAR ENT FROM THE RECORD OR THAT IT REQUIRED A LONG DRAWN PROCESS OF REASONING TO DISCOVER THE SAME. 3. THAT AS THE REFUND WAS ISSUED BY PROCESSING THE RETURN U/S 143(1) OF THE ACT. SO, THIS ORDER CAN NOT BE RECTIF IED U/S 154/155 OF THE ACT. THIS ISSUE WAS NOT DECIDED BY THE HONB LE BENCH WHILE DISMISSING THE APPEAL. THERE ARE MANY CASES I.E. 283 ITR (AT) 18(AHD.) AN D 309 ITR (AT) 90 (DELHI) WHEREIN IT WAS HELD THAT IF THE RET URN IS PROCESSED U/S 143(1) OF THE ACT THEN THE SAME CAN N OT BE MA NO.10(ASR)/2012 3 RECTIFIED U/S 154/155 OF THE ACT AFTER THE AMENDMEN T W.E.F. 01.06.1999. IT IS, THEREFORE, A MISTAKE APPARENT FROM RECORD W HICH MAY KINDLY BE RECTIFIED. 3. THE LD. COUNSEL FOR THE ASSESSEE, MR. J.K. GUPTA , ADVOCATE, RELIED UP THE SUBMISSIONS MADE IN THE MISCELLANEOUS APPLICATI ON. 4. ON THE OTHER HAND, THE LD. DR, MR. R.L.CHHANALIA , OPPOSED THE APPLICATION AND RELIED UPON THE ORDER OF THE ITAT P ASSED ON 27.02.2009 (SUPRA). 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IT WAS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THAT PROVISIONS OF SECTION 44AD ARE APPLICABLE WHERE GROSS RECEIPT OF THE ASS ESSEE DOES NOT EXCEED RS.40 LACS. WHEREAS IN PARA 8 OF THE ORDER OF THE TRIBUNAL, DATED 27.02.2009, IT HAS BEEN HELD AS UNDER: 8. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. THE FACTS ARE NOT DISPUTED. THE DIFFE RENCE OF RS.2,11,642/- REMAINS UNEXPLAINED. THE ADDITION HA D BEEN MADE BY THE A.O. UNDER SECTION 154/155 OF THE ACT, RECTIFYI NG THE ACTION IN SUSTAINING THE RETURN OF INCOME FILED BY THE ASSESS EE. THE DIFFERENCE OF RS.2,11,642/- WAS DISCOVERED BY THE A.O. AFTER P ROCESSING OF THE RETURN, ON ENQUIRY FROM THE RAILWAYS DEPARTMENT AT FEROZEPUR. THIS DIFFERENCE OF RS.2,11,642/- IN THE AMOUNT RECEIVED BY THE ASSESSEE AND THAT SHOWN BY THE ASSESSEE, HAD REMAINED TO BE ADDED AND IT WAS THIS WHICH WAS RECTIFIED BY THE A.O. THE PLEA OF T HE ASSESSEE OF NON- AFFORDING OF OPPORTUNITY TO HIM, DOES NOT CARRY HIS CASE ANY FURTHER. NO EXPLANATION WITH REGARD TO THE AFORESAID DIFFERE NCE OF RS.2,11,642/- BETWEEN THE ACTUAL AMOUNT RECEIVED AN D THE AMOUNT DECLARED, HAS BEEN OFFERED BY THE ASSESSEE RIGHT UP TO THE PRESENT STAGE. THE ASSESSEE IS ONLY HARPING UPON THE APPLI CABILITY OF SECTION 44AD OF THE ACT WHEREUNDER THE ASSESSEE HAD BEEN CL AIMING MA NO.10(ASR)/2012 4 LEVIABILITY/ADDITION OF ONLY 8% OF GROSS RECEIPTS O F RS.2,11,642/-. SECTION 44AD OF THE ACT APPLIES ONLY WHERE THE GROS S RECEIPTS OF THE ASSESSEE EXCEED RS.40 LACS. IN THE PRESENT CASE, T HE ASSESSEE HAS NOT SHOWN TO HAVE RECEIVED EXCEEDING RS.40 LACS. THAT BEING SO, THERE IS NO QUESTION OF APPLICABILITY OF SECTION 44AD OF THE ACT TO THE CASE OF THE ASSESSEE. THUS, 8% RATE OF PROFIT, AS ENVISAGE D BY SECTION 44AD OF THE ACT, CANNOT BE APPLIED TO THE CASE OF THE AS SESSEE. THE A.O. VALIDLY RECTIFIED THE MISTAKE IN PROCESSING OF THE ASSESSEES RETURN AND THE LEARNED CIT(A) CORRECTLY AFFIRMED THIS ACTION O F THE A.O. 5.1. THEREFORE, IN VIEW OF THE PROVISIONS OF SECTIO N 44AD(1) OF THE ACT, READ WITH IST PROVISO, IT IS A MISTAKE APPARENT FRO M RECORD AND THE ITAT IN ITS ORDER DATED 27.02.2009 HAS WRONGLY MENTIONED T HAT SECTION 44AD OF THE ACT APPLIES ONLY WHERE THE GROSS RECEIPTS OF THE AS SESSEE EXCEEDS RS.40 LACS. THEREFORE, THE ORDER OF THE ITAT DATED 27.02.2009 I N PARA 8 IS RECALLED AND THE REGISTRY IS DIRECTED TO FIX UP THE MATTER FOR H EARING ON THE ISSUE ON 28.08.2012. 6. IN THE RESULT, M.A.NO.10(ASR)/2012 OF THE ASSESS EE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH JUNE, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29TH JUNE, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. SWARAN SINGH, FEROZEPUR. 2. THE ITO WARD III(1), FEROZEPUR. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY