M/S CHOUDHARY & BROTHERS, Jaipur V. ACIT, Jaipur

MA 40/JPR/2012

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2095 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 10-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) M.A. NO.40/JP/2012 (ARISING OUT OF ITA NO. 1177/JP/2012) ASSESSMENT YEAR : 2007-08 M/S. CHOUDHARY & BROS VS. THE ACIT VILLAGE: LADANA RANGE-7 FAGI, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL DEPARTMENT BY: SHRI D.C. SHARMA DATE OF HEARING: 11-07-2014 DATE OF PRONOUNCEMENT: 18 -07-2014 ORDER PER R.P. TOLANI, JM THE ASSESSEE HAS FILED A MISCELLANEOUS APPLICATIO N U/S 254 (2) OF THE ACT AGAINST THE ORDER OF THE TRIBUNAL DATED 31-5-20 11 FOR THE ASSESSMENT YEAR 2007-08 CONTENDING THAT FOLLOWING MISTAKE HAS CREPT IN THE IMPUGNED ORDER OF THE ITAT WHICH IS APPARENT FROM RECORD AND IT DESERVES TO BE RECTIFIED U/S 254(2) OF THE ACT. HON'BLE ITATS DIRECTION TO APPLY NET PROFIT RAT E OF 11.5% SUBJECT TO DEPRECIATION AND INTEREST PAYMENT. HOWEV ER, THIS NOT MADE EXPLICITLY CLEAR AND THEREFORE, AO WHILE GIVING THE APPEAL EFFECT HAS NOT ALLOWED THE CLAIM OF DEPRECIATION AND INTEREST PAYMENT FROM NET PROFIT RATE OF 11.5%. IN VIEW OF ABOVE FACTS, THE ORDER PASSED BY HON'BLE ITAT BE SUITABLY MODIFIED BY DIRECTING THAT NET PROFIT RATE OF 11.5% IS 2 SUBJECT TO ALLOWANCE OF DEPRECIATION, INTEREST TO P ARTNERS AND INTEREST TO THIRD PARTIES. 2.1 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT IN THE IMPUGNED ORDER AT PAGE 6 AND PARA 8 OF THE ITAT, THE DIRECTION HAS BEEN GIVEN TO AO TO APPLY NET PROFIT RATE OF 11.5% AS PROVIDED IN THE T ABLE IN THE MISC. APPLICATION BY FOLLOWING OBSERVATION. IT IS SEEN THAT NET PROFIT RATE SHOWN BY THE ASSE SSEE DURING THE YEAR IS 10.07% AGAINST 10.82% IN IMMEDIATELY PRECED ING YEAR. THEREFORE, WE ARE OF THE VIEW THAT INSTEAD OF DISA LLOWING VARIOUS EXPENSES UNDER THE INDIVIDUAL HEAD, IT WILL BE BETT ER IF A REASONABLE NET PROFIT RATE IS APPLIED. KEEPING IN MIND THE PAST HI STORY OF THE CASE AND DEFECT NOTED BY AO, WE ARE OF THE VIEW THAT IF NET PROFIT RATE OF 11.5% IS APPLIED THEN IT WILL MEET THE ENDS OF JUSTICE. A CCORDINGLY, THE AO IS DIRECTED TO RECOMPUTE THE PROFIT BY APPLYING NET PR OFIT RATE OF 11.5% AGAINST NET PROFIT RATE OF 10.07% SHOWN BY THE ASSE SSEE. FOR THE SAKE OF CLARIFICATION, THE LD. COUNSEL OF THE ASSESSEE H AS STATED THAT INSTEAD OF DISALLOWING EXPENSES HEADWISE A REASONABLE NET P ROFIT RATE SHOULD BE APPLIED. THIS CONTENTION OF THE ASSESSEE IS REAS ONABLE. ACCORDINGLY, WE DIRECT THE AO TO APPLY NET PROFIT RATE OF 11.5% MENTIONED ABOVE. THIS GROUND OF ASSESSEE IS ALLOWED IN PART. 2.2 THE LD. DR CONTENDS THAT THE MISC. APPLICATION OF T HE ASSESSEE AMOUNTS TO REVIEW OF THE ITAT ORDER INASMUCH AS THE NECESSARY DIRECTIONS WERE ISSUED AFTER CONSIDERING ALL THE ARGUMENTS AND SUBMISSIONS OF THE ASSESSEE AND IT WAS LEFT TO THE ITAT THAT REASONABL E RATE OF NET PROFIT SHOULD BE APPLIED. THE PLEA OF THE ASSESSEE IS THAT ITAT IN FACT INTENDED THE ALLOWANCE OF DEPRECIATION AND IT HAS NOWHERE BEEN D IRECTED BY IT. IN THESE CIRCUMSTANCES, IT CANNOT BE HELD THAT PAST HISTORY OF THE ASSESSEE APPLIES THE 3 RES JUDICATA TO SUBSEQUENT YEARS AND ITAT INTENTION AS CLAIMED BY THE ASSESSEE IS NOWHERE MANIFEST IN THE ORDER. THIS IS A POSSIBLE INTENTION OF ITAT BUT IT CANNOT BE HELD TO BE THE MISTAKE APPAR ENT FROM RECORD. HENCE, THE M.A. OF THE ASSESSEE AMOUNTING TO REVIEW OF THE ITAT ORDER DESERVES TO BE DISMISSED. 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND MERIT IN THE ARGUMENTS OF THE LD. DR . THE PETITION FILED BY THE ASSESSEE AMOUNTS TO REVIEW OF THE ITAT ORDER IS NOT PERMISSIBLE U/S 254(2) OF THE ACT. IN VIEW THEREOF, THE M.A. OF THE ASSESSEE IS DISMISSED. 3.0 IN THE RESULT, THE M.A. OF THE ASSESSEE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-07-2014. SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 18 TH JULY, 2014 *MISHRA COPY FORWARDED TO:- 1. M/S. CHOUDHARY & BROTHERS, JAIPUR 2. THE ACIT, RANGE-7, JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (MA NO. 40/JP/2012) AR ITAT, JAIPUR 4