Deputy Commissioner of Income tax, Srinagar V. M/s. Construction Engineers, Srinagar

MA 12/ASR/2020

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), Central Circle, Jammu, as the appellant, and M/s Construction Engineers, Srinagar, as the respondent. The dispute originated from the assessment year 2007-08, where the ITAT, Amritsar Bench initially adjudicated the net profit at 7% on gross contract receipts. This decision was contested by the revenue, leading to a High Court directive to reassess the profit rate, setting a minimum of 9%. The revenue's Miscellaneous Application sought to rectify the ITAT's oversight in adhering to the High Court's directive, which resulted in the recall of the previous ITAT orders and a remand for further proceedings.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 115178 (ITAT-AMRITSAR)
• Duration Of Justice: 18 year(s) 7 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-12-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-12-2022
• Assessment Year: misc
• Appeal Filed On: 29-04-2004
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset converted into stock in trade
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER ANDSH. ANIKESH BANERJEE, JUDICIAL MEMBER M.A. No. 12/Asr/2020 (In I.T.A.Nos. 495 & 382/Asr/2010) Assessment Year: 2007-08 DCIT-Central Circle, Jammu. (Appellant) Vs. M/s Construction Engineers, 54, Industrial Estate, Barzulla Srinagar. [PAN: AABFC7715P] (Respendent) Appellant by Smt. Ratinder Kaur, Sr. DR. Respondent by None. Date of Hearing 09.12.2022 Date of Pronouncement 20.12.2022 ORDER Per Anikesh Banerjee, JM: The Miscellaneous Application was filed by the revenue against the order of the ITAT Amritsar Bench bearing ITA Nos. 495 & 382/Asr/2010 for A.Y. 2007- 08, by a combined order which was pronounced on dated 30.12.2019. The revenue had filed the Miscellaneous Application 30/06/2020 u/s 254(2) of the Income tax Act 1961, (in brevity the Act). M.A. No. 12/Asr/2020 (In I.T.A.Nos. 495 & 382/Asr/2010) 2 2. Tersely, we advert the fact of the case is that the ITAT, Amritsar Bench has passed the order on 30/12/2019 by adjudicating the net profit @ 7% on gross contract receipts declared by the assessee. The revenue had filed an appeal before the Hon’ble Jammu & Kashmir High Court at Srinagar bearing ITA No. 04/2012 date of order 05.06.2017. The Hon’ble High Court had passed the order with direction to remand back the orders of ITAT, Amritsar Bench bearing ITA No. 495/Asr/2010 & 382/Asr/2010, both for A.Y. 2007-08 and date of order 02.07.2013. The revenue has agitated the issue before the ITAT, Amritsar Bench through miscellaneous application that the bench had passed the order without considering the net profit rate not less than 9% as directed by the Hon’ble High Court. The application is filed before the Bench for further adjudication. The assessee was called for hearing, but none was present on behalf of the assessee. An adjournment application was filed by the counsel of the assessee. Considering the nature of dispute and the fact of the case, we proceed to dispose the application of the revenue after hearing the learned DR and on the basis of material available on the record. The adjournment application is rejected & the matter is taken for hearing. M.A. No. 12/Asr/2020 (In I.T.A.Nos. 495 & 382/Asr/2010) 3 3. The ld. Sr. DR first took our attention in the last para of the application. “However, decision of the Hon'ble ITAT in dismissing the appeal of the Revenue is not justified as the appeal has been decided by the Hon'ble High Court in favour of the assessee as discussed supra and the case was remitted back to the Tribunal to ascertain the appropriate net profit rate which must not be less than 9% which was admitted by the assessee itself during High Court proceedings. However, from the perusal of the order passed by the Tribunal vide its order dated: 495/asr/2010 and 382/Asr/2010 dt. 320.12./2019, it seems that the Hon'ble ITAT, Amritsar has directed the A.O. to apply net profit rate of 7% on the gross contract receipts declared by the assessee which is less than the net profit rate of 9% directed by the Hon’ble High Court and needs to be rectified under section 245(2) of the Act, in this case being mistake apparent from records. It is therefore requested that the Hon’ble ITAT may be pleased to entertain this application for review of the order passed on 30.12.2019 and be re-adjudicated.” 3.1 The ld. Sr. DR further argued and pointed out the para no. 8 of order of Hon’ble Apex Court which is extracted as below: M.A. No. 12/Asr/2020 (In I.T.A.Nos. 495 & 382/Asr/2010) 4 “8. Consequently, we set-aside the finding of the Tribunal to the effect that the net profit rate should be 7%. The matter is remitted to the Tribunal to ascertain the appropriate net profit rate which must not be less than 9% which was admitted by the assesse itself.” 4. We thoughtfully considered the submission of the revenue, considered the documents available in the record and respectfully observed the order of the Hon’ble Jammu & Kashmir, High Court. The Hon’ble High Court directed the ITAT, to ascertain the net profit rate should not be less than 9% and remanded back both the orders for further adjudication. The order passed by the Hon’ble Bench on dated 30.12.2019 &mistakenly had not considered the order of Hon’ble High Court and had restricted the net profit @ 7 % on gross contract receipts declared by the assessee. Order of the jurisdictional High Court is binding on us. The orders passed by the Bench are mistake apparent from the record. Respectfully considering the observation of the order of Hon’ble High Court, both the orders of ITAT, Amritsar Bench bearing ITA Nos. 495/Asr/2010 & 382/Asr/2010 pronounced on 30.12.2019 are recalled for further hearing. The matter is fixed for hearing on 26.12.2022 before the Bench. M.A. No. 12/Asr/2020 (In I.T.A.Nos. 495 & 382/Asr/2010) 5 5. In the result, the Miscellaneous Application of the revenue bearing M.A. No. 12/Asr/2020 is allowed. Order pronounced in the open court on 20.12.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order