M/s Parminder Singh, Samrala V. ACIT, Khanna

MA 20/CHANDI/2011

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0215 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 25-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B M MONGA
• Keywords: Rectification of order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER M.A. NO.20 /CHD/2011 (IN ITA NO.373/CHD/2010) (ASSESSMENT YEAR: 2006-07) THE A.C.I.T., VS. M/S PARMINDER SINGH, CIRCLE KHANNA. VILLAGE KOTLA BHARI, SAMRALA. PAN: AAGFP 2514 A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA, DR RESPONDENT BY : S/SHRI RAVI SHANKAR & B.M.MONGA DATE OF HEARING : 15.03.2013 DATE OF PRONOUNCEMENT : 16.04.2013 O R D E R PER SUSHMA CHOWLA, JM: THE APPLICANT HAS FILED THIS MISCELLANEOUS APPLICAT ION FOR RECALLING THE ORDER DATED 9.12.2010 IN ITA NO. 373/ CHD/2010 RELATING TO THE ASSESSMENT YEAR 2006-07. 2. THE APPLICANT VIDE THE PRESENT MISCELLANEOUS APP LICATION HAD RAISED THE FOLLOWING ISSUES: 2. IN OTHER WORDS AND TO BE MORE SPECIFIC, IF WE COMPARE THE PROFIT & LOSS R THE YEA R ENDING 31.3.2005 WITH THE FIGURES OF PROFIT & LOSS A/C FAR FEE YEAR UNDER CONSIDERATION I.E. YEAR ENDING 31.3.2006 THE CONTRACT RECENT FOR THE YEAR ENDING 31.3.2005 IS RS. 1,97,68,374/-, LESS MATERIAL SUPPLIED BY THE DEPARTMENT AMOUNTING TO RS. 97,46,246/- AND DURING THE YEAR UNDER CONSIDERATION I.E. YEAR ENDING 31.3.2006, TOTAL CON TRACT RECEIPTS ARE RS. 2,80,28,207, LESS MATERIAL SUPPLIED BY THE DEPARTMENT AMOUNTING TO RS. 2,75,79 5. THE CONFUSION APPEARS TO HAVE ARISEN IN THE MIND OF THE ASSESSING OFFICER WHILE HOLDING THA T MATERIAL CONSUMED IS MORE DURING THIS YEAR DUE TO THE REASON THAT THE FIGURES SHOWN IN THE PRO FIT & LOSS ACCOUNT AGAINST THE CONTRACT RECEIPTS ARE TAKEN AT GROSS RECEIPTS WITHOUT CONSID ERING THE MATERIAL SUPPLIED BY THE DEPARTMENT. IF WE LOOK AT THE FIGURES TABULATED BELOW FROM THE SAME PROFIT & LOSS ACCOUNT ALREADY ATTACHED WITH THE RETURN OF INCOME, THE FACT IS THAT THERE W AS NO INCREASE IN BUILDING MATERIAL CONSUMED DURING THE YEAR UNDER CONSIDERATION, RATHER IT IS L ESSER BY 17.81%; 2 SR. NO. PARTICULAR YEAR UNDER APPEAL (AY 2006- 07) IMMEDIATELY PROCEEDING YEAR (AY (2005-06) 1 TOTAL CONTRACT AMOUNT 2,80,28,207 1,97,68,374 2 MATERIAL PURCHASED BY ASSESSEE 1,43,94,100 41,19,342 3 MATERIAL ISSUED BY DEPARTMENTS I.E. CONTRA CTEE 2,75,795 97,46,246 4 TOTAL MATERIAL CONSUMED 1,46,69,895 1,38,65,588 5 %AGE OF TOTAL MATERIAL CONSUMED TO CONTRACT AMOUNT 52.33 % 70.14 % FROM THE ABOVE IT IS CLEAR THAT DURING THE IMMEDIAT ELY PRECEDING YEAR MATERIAL CONSUMPTION WAS 70.14% OF THE CONTRACT RECEIPTS AS AGAINST 52.33% D URING THE YEAR UNDER CONSIDERATION. THIS IS LESSER BY 17.81 % OF MATERIAL CONSUMED TO TOTAL CONTRACT RECEIPTS AS COMPARED TO THE IMMEDIATELY PROCEEDING YEAR. THE CONCLUSION OF THE HON'BLE TRIBUNAL IN PARA 7 OF THE ORDERS ARE BASICALLY BASED ON THE ERRONEOUS FINDINGS OF THE ASSESSING OFFICER AT PAGE 5 OF THE ASSESSMENT ORDER; WHEREIN THE AO HAS OMITTED TO CON SIDER THE COST OF MATERIAL SUPPLIED BY THE DEPARTMENT WHICH WAS ONLY 2,75,795 DURING THIS YEAR AND IT WAS RS. 97,46,246 IN THE LAST YEAR WHICH COULD NEVER RESULT INTO EXCESS CONSUMPTION OF MATERIAL AS WRONGLY HELD BY THE AO WHICH MISLED THE HON'BLE TRIBUNAL, IN OTHER WORDS, THE MA TERIAL CONSUMED IS LESSER BY 17.81% AND THUS THE ORDER OF THE CIT (A) BASED ON THE HISTORY OF THE CASE, MENTIONED IN PARA 4.2, INCLUDING THE CASES DECIDED UNDER SCRUTINY, SHOULD HAVE BEEN UPHELD. THE LD CIT (A) AFTER VERIFYING THE PAST RESULTS OF THE CASE NAMELY NET PROFIT RATE FOR THE LAST TEN ASSESSMENT YEARS PARTICULARLY THE CASES DECIDED UND ER SCRUTINY CONFIRMED THE ADDITION TO THE EXTENT OF RS. 1,00,000/- TO THE RETURNED INCOME OF THE ASSESSEE. THE DECISION OF THE LD. CIT (A) WAS BASED ON THE MAXIMUM NET PROFIT DECLARED AND AS SESSED DURING THE LAST 10 YEARS. THE ASSESSEE DECLARED NET PROFIT RATE RANGING FROM 0.22 % TO 3.20% DURING THE LAST TEN ASSESSMENT YEARS NAMELY AY 1997-98 TO AY 2006-07. IN THE AY 20 04-05 THE NET PROFIT DECLARED WAS HIGHEST AT 3.20%. IN THE YEAR UNDER CONSIDERATION NET PROFI T DECLARED WAS 2.94% AND EVEN IF IT WOULD BE INCREASED TO 3.20% EVEN THEN THE ADDITION COULD ONL Y BE MADE TO THE EXTENT OF RS.73,270/- ONLY. AFTER CONSIDERING THIS ASPECT THE CIT (A) HAD RIGHTLY UPHELD THE ADDITION OF RS.1,00,000/- TO THE RETURNED INCOME. IF THE HON'BLE TRIBUNAL HAD EXAMINED THIS ACTUAL MATRIX OF THE CASE THEN THE ORDERS PASSED BY THE CTT (A) COULD NOT HAVE BEEN DISTURBED. RATHER THE DECISION OF THE CTT (A) BASED ON THE PAST HISTORY OF THE CASE WOULD HAVE BEEN APPRECIATED. THIS ABOVE FACTUAL MISTAKE, ATTRIBUTABLE TO THE HON'BLE TRIBUN AL, THOUGH AFTER RELYING ON THE ASSESSMENT ORDER, HAS CAUSED PREJUDICE TO THE ASSES SEE. THIS BEING A MISTAKE APPARENT FROM RECORD, THE HON'BLE TRIBUNAL IS REQUESTED TO RECALL THE ORDER, AND PASS NECESSARY RECTIFICATION ORDER U/S 254 (2) AFTER TAKING INTO ACCOUNT THE ABO VE FACTS. 3. THE LEARNED A.R. FOR THE APPLICANT POINTED OUT T HAT THE ESTIMATION MADE BY THE TRIBUNAL FOR DETERMINING THE INCOME OF THE APPLICANT WAS HIGHER BECAUSE OF THE RELEVANT FACTS MENTIONED IN P ARA 2. IT WAS FAIRLY CONCEDED BY THE LEARNED A.R. FOR THE APPLICANT THAT THE DETAILS IN PARA 2 3 WERE NOT PRODUCED BEFORE THE TRIBUNAL DURING THE CO URSE OF HEARING OF THE CAPTIONED APPEAL. 4. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T ONCE THE ESTIMATION OF INCOME HAD BEEN MADE IN THE HANDS OF THE APPLICANT, THERE WAS NO MERIT IN THE PRESENT MISCELLANEOUS APPLICATI ON BEING MOVED BY THE APPLICANT TO SUBSTITUTE THE RATE OF ESTIMATION. 5. ON THE PERUSAL OF THE RECORD AND THE RELEVANT DE TAILS, WE FIND THAT THE TRIBUNAL WHILE DECIDING THE ISSUE OF INCOME FRO M CONTRACT BUSINESS IN THE HANDS OF THE APPLICANT HELD AS UNDER: 6. WE HAVE HEARD BOTH THE PARTIES. IT IS NOT IN D ISPUTE THAT THE EXPENSES CLAIMED BY THE ASSESSEE IN THE YEAR UNDER APPEAL ARE DISPROPORTION ATELY HIGHER THAN THOSE ASSESSMENT ORDER, THE EXPENSES ON BUILDING MATERIAL ITSELF STA ND AT RS.1.,43,94,100/-IN THE YEAR UNDER APPEAL AS AGAINST RS.41,19,342/- IN THE IMMEDIATELY PRECEDING YEAR. SO IS THE CASE WITH OTHER EXPENSES ALSO. AFTER GIVING MARGIN FOR INCREA SE IN THE EXPENSES ON BUILDING MATERIAL AS A RESULT OF INCREASE IN CONTRACT RECEIPTS, THE INCR EASE IN EXPENSE ON ACCOUNT OF BUILDING MATERIAL IS STILL SUBSTANTIALLY HIGHER, I.E., HIGHE R BY 30% THAN LAST YEAR. THE INCREASE IN OTHER EXPENSES IS ALSO SUBSTANTIALLY HIGHER. PERUS AL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE HAS NEITHER PRODUCED THE BOOKS OF ACCO UNT, BILLS AND VOUCHERS TO JUSTIFY THE INCREASE IN EXPENSES NOR OFFERED ANY EXPLANATION TO JUSTIFY SUCH AN ABNORMAL INCREASE IN THE EXPENSES CLAIMED BY IT. IT IS IN THIS BACKGROUN D THAT THE ASSESSING OFFICER APPLIED NET PROFIT RATE OF I0% OF CONTRACT RECEIPTS INSTEAD OF DISALLOWING THE ENTIRE AMOUNT OF UNSUBSTANTIATED ABNORMAL INCREASE IN EXPENSES. 7. THE LD. CIT(A) HAS RELIED UPON THE; PAST HISTOR Y OF THE ASSESSEE. HOWEVER HISTORY OF THE ASSESSEE IS OF NO HELP IN THE PRESEN T CASE FOR THE TWO REASONS, NAMELY, (I) IN NONE OF THE EARLIER YEARS THE ASSESSEE HAS C LAIMED SUCH ABNORMAL INCREASE IN EXPENSES ON BUILDING MATERIALS AS CLAIMED IN THE YE AR UNDER APPEAL; AND (II) THE BOOKS OF ACCOUNT WERE ALWAYS PRODUCED AND SUBJECTED TO SC RUTINY BY THE ASSESSING OFFICER IN THE PAST. AS STATED EARLIER, THE ASSESSEE HAS NEITH ER PRODUCED THE BOOKS OF ACCOUNT NOR THE BILLS AND VOUCHERS NOR OFFERED ANY OTHER EX PLANATION TO JUSTIFY THE ABNORMAL INCREASE IN EXPENSES IN THE YEAR UNDER APPEAL. 6. IN VIEW OF THE ABOVE SAID FINDINGS OF THE TRIBUN AL THE INCOME IN THE HANDS OF THE APPLICANT WAS ESTIMATED. THE APPL ICANT VIDE THE PRESENT MISCELLANEOUS APPLICATION SEEKS TO REARGUE THE APPEAL IN ORDER TO COME TO THE FINDING THAT THE ESTIMATION MADE BY THE TRIBUNAL WAS ON THE HIGHER SIDE. HOWEVER, IT HAS BEEN CLEARLY POIN TED OUT BY THE LEARNED A.R. FOR THE APPLICANT THAT THE TABULATED DETAILS I NCORPORATED UNDER PARA 2 WERE NOT AVAILABLE BEFORE THE TRIBUNAL WHILE HEAR ING THE CAPTIONED 4 APPEAL. IN THE ABSENCE OF THE SAME AND BECAUSE OF THE LIMITED POWER ENSHRINED IN SECTION 254(2) OF THE ACT, WE FIND NO MERIT IN THE PRESENT MISCELLANEOUS APPLICATION AND THE SAME IS DISMISSED . 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE APPLICANT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF APRIL, 2013. SD/- SD/- (T.R. SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 16 TH APRIL, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH