ACIT, Kota V. PARMANAND CONTRACOTR, Jaipur

MA 13/JPR/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5775 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Assessee Lawyers: NIKHLESH KATARIA CA DHK
• Keywords: Depreciation; Condonation of delay
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M M.A. NO. 154/JP/2017 ARISING OUT IF ITA NO. 673/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2009-10. ASST. COMMISSIONER OF INCOME TAX CIRCLE-1,KOTA. CUKE VS. SHRI PARMANAND, PROP. M/S PARMANAND CONTRACTOR, H. NO. 19, RANGBARI, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABZPP 5832 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT M.A. NO. 13/JP/2018 ARISING OUT IF ITA NO. 217/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2010-11. ASST. COMMISSIONER OF INCOME TAX CIRCLE-1,KOTA. CUKE VS. SHRI PARMANAND, PROP. M/S PARMANAND CONTRACTOR, H. NO. 19, RANGBARI, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABZPP 5832 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI NIKHLESH KATARIA(CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02.02.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08/02/2018. VKNS'K@ ORDER PER SHRI BHAGCHAND, AM THESE MISCELLANEOUS APPLICATIONS ARE FILED BY THE R EVENUE AGAINST THE ORDER OF THIS TRIBUNAL DATED 30.11.2016. SINCE SIMILAR ISSU E IS TAKEN IN BOTH MISCELLANEOUS APPLICATIONS, HENCE, THESE MISCELLANEOUS APPLICATIO NS WERE TAKEN UP TOGETHER FOR HEARING AND ARE BEING DECIDED BY WAY OF THIS CONSOL IDATED ORDER FOR THE SAKE OF 2 MA NOS. 154/JP/2017 & 13/JP/2018. SHRI PARMANAND, KOTA. CONVENIENCE AND BREVITY. THE M.A. NO. 154/JP/2017 FILED BY THE REVENUE, AND THE CONTENT OF THIS MISCELLANEOUS APPLICATION READ AS U NDER:- ASSESSMENT U/S 143(3) OF THE IT ACT WAS COMPLETED ON 30/12/2011 AT TOTAL ASSESSED INCOME RS. 1,31,84,200/-. ONE OF TH E ISSUES, DISCUSSED IN THE ASSESSMENT ORDER IS AFTER REJECTING BOOKS OF ACCOUN T U/S 145(3) OF THE IT ACT, ESTIMATED NET PROFIT OF CONTRACT BUSINESS OF ASSESS EE @ 9.75% AND MADE ADDITION OF RS. 1,63,544/-. THE CIT(A), THOUGH UPHELD THE REJECTION OF BOOKS OF ACCOUNT AND ESTIMATION OF N.P. @ 9.75%, BUT DIRECTED TO ALLOW B ENEFIT OF DEDUCTION OF DEPRECIATION AND INTEREST OUT OF THE ESTIMATED PROF IT SUBJECT TO INCOME DECLARED BY THE ASSESSEE. THE DECISION OF THE CIT(A) WAS CHALLENGED BY THE DE PARTMENT. THE DEPARTMENT'S PLEA BEFORE THE HON'BLE ITAT WAS THAT WHILE COMPUTING INCOME OF THE ASSESSEE IN THE ASSESSMENT, BENEFIT OF DEPRE CIATION AND INTEREST HAD BEEN ALLOWED. THE HON'BLE ITAT FOLLOWED THE DECISIO N OF COORDINATE BENCH IN THE CASE OF VERY ASSESSEE IN ITA NO.524 & 525/JP/20 10 FOR THE A.Y. 2005-06 AND 2007-08, WHEREIN IT HAS BEEN HELD AS UNDER:- '9. CONSIDERING THE FACT THAT TRIBUNAL FOR BOTH THE NET PROFIT RATE OF 9.75% SUBJECT TO DEPRECATION AND INTEREST AND THE R EVENUE HAS NOT FILED APPEALS AGAINST ORDER OF LD. CIT(A) FOR ASSES SMENT YEAR 2004-05 AND 06-07, WE FEEL THAT ID. CIT(A) WAS JUSTIFIED IN DIRECTING TO APPLY A NET PROFIT RATE OF 9.75% SUBJECT TO DEPRECIATION AN D INTEREST.' RELYING ON THE ABOVE, THE HON'BLE ITAT HAS GIVEN DI RECTION TO THE AO TO APPLY THE NET PROFIT RATE OF 9.75% SUBJECT TO DEPRECIATIO N AND INTEREST. CONSIDERING THE DECISION OF HON'BLE ITAT, THE REVEN UE PREFERRED APPEAL BEFORE HON'BLE HIGH COURT AS THE ASSESSEE HIMSELF H AS DECLARED INCOME OF RS.4,93,710/- FROM THE CONTRACTORSHIP BUSINESS. DUR ING THE YEAR, THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.9,28,152/- AND INTER EST OF RS.9,92,533/- 3 MA NOS. 154/JP/2017 & 13/JP/2018. SHRI PARMANAND, KOTA. AGGREGATING TO RS.19,20,705/-, WHICH WILL RESULT IN TO COMPUTATION OF BUSINESS LOSS OF RS.12,63,452/- AS AGAINST INCOME OF RS.4,93 ,710/- DECLARED BY THE ASSESSEE, WHICH IS CONTRARY TO BOARD'S INSTRUCTION NO.549, AS PER WHICH ASSESSED INCOME CANNOT BE LESS THAN THE RETURNED IN COME. CONSIDERING THE ABOVE, THE REVENUE HAS FILLED APPEA L BEFORE HON'BLE HIGH COURT. ONE OF THE ISSUES IS IN RESPECT OF BOAR D'S INSTRUCTION NO. 549 IS AS UNDER: 'WHETHER THE TRIBUNAL WAS LEGALLY JUSTIFIED IN DIRE CTING TO APPLY NET PROFIT ARE SUBJECT TO DEPRECIATION AND INTEREST, IN PURSUANCE OF WHICH THE INCOME FORM CONTRACTORSHIP BUSINESS OF THE ASSE SSEE REDUCED TO NEGATIVE FIGURE, WHICH IS CONTRACT TO THE BOARD'S C IRCULAR NO. 549 ALSO WHEN THE CIT(A) DIRECTED TO ALLOW DEPRECIATION AND INTEREST SUBJECT TO INCOME DECLARED BY THE ASSESSEE.' HON'BLE HIGH COURT IN THE ORDER VIDE DBIT NO. 127/2 017 MENTIONED THAT THE CONTENTION RAISED BY THE COUNSEL FOR THE A PPELLANT REGARDING CIRCULAR NO. 549 WAS NOT RAISED BEFORE TRIBUNAL, THEREFORE, THE APPROPRIATE REMEDY FOR THE APPELLANT IS TO RAISE THE SAID CONTENTION BEFOR E THE TRIBUNAL BY WAY OF APPROPRIATE APPLICATION. HON'BLE HIGH COURT HAS ALS O MENTIONED THAT: 'IN THAT VIEW OF THE MATTER AT THIS STAGE, THIS APP EAL IS NOT ENTERTAINED HOWEVER, LIBERTY IS GRANTED TO THE APPELLANT TO FIL E APPROPRIATE APPLICATION BEFORE THE TRIBUNAL. IT IS MADE CLEAR T HAT AFTER THE APPLICATION IS PREFERRED AND DECIDED IT WILL OPEN F OR THE APPELLANT TO CHALLENGE SUCH ORDER AND EVEN THE PRESENT ORDER.' HENCE, IN VIEW OF THE SECTION 254(2) OF THE IT ACT , 1961, IT IS PRAYED THAT IN THE LIGHT OF THE HON'BLE HIGH COURT IN THE ORDER VIDE DBIT NO. 127/2017, THE DECISION OF HON'BLE ITAT ORDER NO. IT A NO. 673/JP/2013, DATED 30/11/2016 MAY KINDLY BE RECALLED AND APPEAL MAY KI NDLY BE DECIDED ON MERIT IN VIEW OF BOARD'S INSTRUCTION NO.549, AS PER WHICH ASSESSED INCOME CANNOT BE LESS THAN THE RETURNED INCOME. 4 MA NOS. 154/JP/2017 & 13/JP/2018. SHRI PARMANAND, KOTA. SIMILAR PLEA HAS BEEN TAKEN IN THE MISCELLANEOUS AP PLICATION NO. 13/JP/2018. 2. THE LD. D/R SUBMITTED THAT THESE MISCELLANEOUS A PPLICATIONS OF THE REVENUE ARE BEYOND THE PERIOD OF 6 MONTHS FROM THE END OF T HE MONTH IN WHICH THE ORDER WAS PASSED BY THE TRIBUNAL AND THERE IS DELAY IN FI LING THESE MISCELLANEOUS APPLICATIONS OF 186 & 211 DAYS. HOWEVER, THESE MISC ELLANEOUS APPLICATION ARE FILED, AS PER THE DIRECTION OF HONBLE HIGH COURT IN ITS O RDER DATED 1.07.2017. SINCE MISCELLANEOUS APPLICATIONS ARE FILED AS PER HONBLE HIGH COURT DIRECTION HENCE, DELAY IS DEEMED TO HAVE BEEN CONDONED BY HONBLE HIGH COU RT. HE PLEADED TO DECIDE THE M. A. ON MERIT. 3. ON THE OTHER HAND, LD. AR SUBMITTED THAT THE MIS CELLANEOUS APPLICATIONS BEING BARRED BY LIMITATION AND CONTENDED THAT THERE IS NO PROVISION OF CONDONATION OF DELAY U/S 254(2) OF THE I.T. ACT. FINALLY, HE SU BMITTED THAT HE HAD NO OBJECTION IF INCOME IS RESTRICTED TO THE RETURN INCOME. 4. WE HAVE CONSIDERED THE SUBMISSIONS AS WELL AS RE LEVANT MATERIAL ON RECORD. THESE MISCELLANEOUS APPLICATIONS ARE FILED BY REVEN UE AS PER DIRECTION OF HONBLE HIGH COURT; HENCE, THE DELAY IS ALREADY CONDONED BY HONBLE HIGH COURT. FURTHER, ONLY MISTAKE IN THE ORDER OF ITAT IS THAT COMPUTATI ON OF INCOME SUBJECT TO INTEREST OF DEPRECIATION COMES BELOW THE RETURNED INCOME WHICH IS CONTRARY TO THE LAW AS WELL AS AGAINST THE BOARDS INSTRUCTION. WE ARE OF THE VIEW THAT WHILE GIVING APPEAL EFFECT THE INCOME CANNOT BE ASSESSED BELOW THE RETU RNED INCOME. CONSIDERING THIS AS A MISTAKE APPARENT ON RECORD, WE DIRECT TO RESTR ICT THE DEDUCTION OF DEPRECIATION AND INTEREST TO THE EXTENT THAT OF THE GIVING APPEA L EFFECT INCOME SHALL NOT BE LESS THAN RETURNED INCOME. 5 MA NOS. 154/JP/2017 & 13/JP/2018. SHRI PARMANAND, KOTA. 5. IN THE RESULT, BOTH MISCELLANEOUS APPLICATIONS O F THE REVENUE ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 08/02/201 8. SD/- SD/- ( FOT; IKY JKO] ) ( HKKXPAN] ) (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL; /JUDICIAL MEMBER YS[KKLNL; /ACCOUNTANT MEMBER JAIPUR DATED:- 08/02/2018. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT-ACIT, CIRCLE-1, KOTA. 2. THE RESPONDENT SHRI PARMANAND, KOTA. 3. THE CIT 4. THE CIT,(A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (MA NO. 154/JP/2017 & 13/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR