M/s. Paras Constructions, Gandhinagar V. The Income tax Officer, Ward-2, Gandhinagar

MA 425/AHD/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4750 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 21-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDIP GARG
• Assessee Lawyers: S N DIVETIA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) M.A. NO. 425/AHD/2009 (ARISING OUT OF I.T.A. NO. 2742/AHD./2004) ASSESSMENT YEAR : 2001-2002 PARAS CONSTRUCTION, GANDHINAGAR -VS.- INCOM E TAX OFFICER, WARD-2, GANDHINAGAR (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI S.N. DIVET IA RESPONDENT BY : SHRI SANDIP GARG, D.R . O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASSESSEE POINTING OUT THAT TRIBUNAL HAS COMMITTED C ERTAIN MISTAKES IN THE ORDER OF THE TRIBUNAL DATED 15.05.2009 IN ITA NO. 2742/AHD/2004 FOR THE A SSESSMENT YEAR 2001-2002. THE CONTENTS OF THE MISCELLANEOUS APPLICATION ARE AS UNDER :- THE APPLICANT HAS BEEN SERVED WITH THE ORDER PASSE D ON 15,5.2009 BY THE APPELLATE TRIBUNAL, BENCH-'C, AHMEDABAD BEING ITA NO. 2742/A HD/2004 FOR A.Y.2001-02 WHEREBY THE APPEAL OF THE REVENUE HAS BEEN PARTLY ALLOWED, 2,1 THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS AS GOVT, CONTRACTOR. IT HAD FILED ITS RETURN OF INCOME FOR AT.2001-02 ON 31 .10.2001 DECLARING TOTAL INCOME AT RS.7,49,984/- TOGETHER WITH AUDITED ANNUAL ACCOUNTS . THE TOTAL CONTRACT RECEIPTS DISCLOSED WERE RS.1,51,62,748/- OUT OF WHICH THE RE CEIPTS FROM WORK GIVEN ON SUB- CONTRACT WERE RS.1,13,69,558/- WITH AGREEMENT TO RE CEIVE NET INCOME AT 4% FROM 2 CONTRACTORS AND OF 1% FROM ONE SUB-CONTRACTOR. HOWE VER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO COMPUTED NET PROFIT FROM SUB-CONTRACT AT 4% ON ENTIRE AMOUNT OF RS.1,13,69,558/- AND AT 8% ON THE SELF EX ECUTED CONTRACT RECEIPTS OF RS.37,93,190/- BECAUSE THE AO REJECTED BOOK RESULT AND ESTIMATED INCOME U/S.44AD. 2.2 BEING AGGRIEVED, THE APPELLANT PREFERRED AP PEAL TO CIT(A) WHO DIRECTED THE AO TO ACCEPT THE NET PROFIT OF RS.7,49,984/- DECLARED BY THE APPELLANT WHICH WAS INCLUSIVE OF INTEREST INCOME OF RS.3,35,972/-. 2.4 THE RESPONDENT PREFERRED FURTHER APPEAL BEF ORE THIS HON'BLE TRIBUNAL BEING ITA NO. 2742/A/2004 WHICH WAS DISPOSED OF ON 15.5.2009 BY PARTLY ALLOWING THE GROUND RELATING TO COMPUTATION OF BUSINESS INCOME. THE HON 'BLE TRIBUNAL DIRECTED AO TO COMPUTE THE NET PROFIT AT 4% BOTH ON SUBCONTRACT AS WELL AS CONTRACT RECEIPTS AND IN ADDITION THE INTEREST INCOME OF RS.3,35,972/- AS BU SINESS INCOME. THE APPLICANT MOST RESPECTFULLY SUBMITS THAT THERE IS AN APPARENT ERROR IN THE ORDER PASSED BY THE APPELLATE TRIBUNAL IN RESPECT OF THIS GROUND OF APPEAL BECAUSE OF NON- CONSIDERATION OF FACT THAT THE SUB-CONTRACT FOR RS. 37 LAKHS WAS GIVEN TO NIRMAN INFRASTRUCTURE AT 1% ONLY AND THIS FACT IS CLEARLY STATED IN PARA PAGE 3 OF THE ORDER OF 2 M.A. NO. 425/AHD/2009 CIT(A) AND EVEN IN THE SYNOPSIS AS WELL AS CHART DT . 8.4.2009 FURNISHED DURING THE COURSE OF HEARING OF THE APPEAL. IN SHORT, THERE IS A MIST AKE APPARENT ON RECORD OF TAKING THE PROFIT MARGIN AL 4% I INSTEAD OF 1 % IN RESPECT OF SUB-CONTRACT OF RS.37 LAKHS GIVEN TO M/S. NIRMAN INFRASTRUCTURE WHICH SHOULD BE RECTIFIE D U/S.254(2). IT IS, THEREFORE, PRAYED THAT THE ORDER PASSED BY T HE TRIBUNAL MAY PLEASE BE RECTIFIED BY DIRECTING TO AO TO ADOPT NET PROFIT AT 1% ON THE SU B-CONTRACT RECEIPTS OF RS.37 LAKHS. NEEDLESS TO SAY FOR THIS ACT OF KINDNESS, THE APPLI CANT AS IN DUTY BOUND SHALL FOR EVER PRAY AND REMAIN GRATEFUL. 2. AT THE TIME OF HEARING OF THE AFORESAID MISCELLA NEOUS APPLICATION, ON BEHALF OF ASSESSEE SHRI S.N. DIVETIA APPEARED AND POINTED OUT THAT ONE OF THE SUB-CONTRACT WORKS OF RS.37 LAKH WAS GIVEN TO M/S. NIRMAN INFRASTRUCTURE AT A PROFIT MAR GIN OF ONLY 1%. HOWEVER, THE TRIBUNAL VIDE ORDER DATED 15.05.2009 IN PARA 3 DIRECTED THE ASSES SING OFFICER TO COMPUTE THE NET PROFIT @ 4% BOTH ON THE SUB-CONTRACT AS WELL AS CONTRACT RECEIP TS. THE LD. COUNSEL SUBMITTED THAT THERE IS A MISTAKE APPARENT FROM THE RECORD, IN AS MUCH AS, NO REASONING HAS BEEN GIVEN FOR REVERSING THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEAL S), WHEREBY THE TRIBUNAL TOOK THE VIEW THAT WHERE THE NET PROFIT MARGIN IS ONLY 1%, PROFIT SHOULD BE TAKEN AT 1% ONLY. HE SUBMITTED THAT THIS BEING A MISTAKE APPARENT FROM THE RECORD WITHI N THE MEANING OF SECTION 254(2) OF THE ACT, THEREFORE, THE SAME BE RECTIFIED. 3. ON THE OTHER HAND, SHRI SANDIP GARG, LD. D.R. AP PEARING ON BEHALF OF THE REVENUE VEHEMENTLY ARGUED THAT THERE IS NO MISTAKE APPARENT FROM THE RECORD WITHIN THE MEANING OF SECTION 254(2). THE LD. D.R. DREW OUR ATTENTION TO THE REASONING GIVEN BY THE TRIBUNAL, WHEREIN IT IS MENTIONED THAT DURING THE ASSESSMENT YEARS 1993- 94, 1994-95 AND 1995-96, THE NET PROFIT @ 4% STANDS ACCEPTED ON THE CONTRACT RECEIPTS. ON THI S BASIS, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO COMPUTE NET PROFIT @ 4% FOR BOTH SUB-CON TRACTS AS WELL AS CONTRACT RECEIPTS. THE LD. D.R. SUBMITTED THAT TRIBUNAL HAS TAKEN A CONSCIOUS VIEW KEEPING IN VIEW THE PAST HISTORY OF THE CASE THEREFORE THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS NOT MAINTAINABLE. 4. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE CONTENTS OF THE MISCELLANEOUS APPLICATION. RIVAL SUBMISSIONS WERE A LSO CONSIDERED. WE FOUND CONSIDERABLE FORCE IN THE SUBMISSIONS MADE BY THE LD. D.R. THAT TRIBUNAL IN ITS ORDER DATED 15.05.2009 HAS TAKEN A CONSCIOUS VIEW KEEPING IN VIEW THE PAST HIS TORY OF THE CASE. THE DETAILS OF SUB-CONTRACTS IS AS UNDER :- 3 M.A. NO. 425/AHD/2009 NAME OF SUB-CONTRACTOR AMOUNT OF SUB- CONTRACTOR % OF NET PROFIT AS PER AGREEMENT 1. NIRMAN INFRASTRUCTURE 73,00,000/- 4% 2. SARASWATI CONSTRUCTION 18,00,000/- 4% 3. NIRMAN INFRASTRUCTURE 37,00,000/- 1% 5. FROM THE ABOVE, IT IS ALSO PERTINENT TO NOTE THA T IN RESPECT OF ONE OF THE SUB-CONTRACTORS M/S. NIRMAN INFRASTRUCTURE, THE NET PROFIT OF SUB-C ONTRACT AS PER AGREEMENT IS 4%, WHEREAS IN RESPECT OF OTHER CONTRACT, IT IS ONLY 1%. IT IS TRU E THAT TRIBUNAL HAS NOT HIGHLIGHTED ITS FACTS IN TH E AFORESAID ORDER, BUT IN OUR CONSIDERED OPINION, IT CANNOT BE SAID THAT THIS WAS ONE OF THE FACTORS, WHICH WAS KEPT IN VIEW WHILE GIVING THE DIRECTION T O ASSESSING OFFICER TO COMPUTE THE INCOME AFTER ADOPTING NET PROFIT @ 4%. BE THAT AS IT MAY, BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE IS MERELY SEEKING REVIEW OF ORDER OF THE T RIBUNAL AND ADMITTEDLY, THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER. 6. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KA RAM CHAND THAPAR AND BROSS P. LTD., REPORTED IN 176 ITR 535 (SC) HELD THAT THE DE CISION OF THE TRIBUNAL HAS NOT TO BE SCRUTINIZED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER SOM E INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IN OUR OPINION, THERE IS NO MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254 (2). HOWEVER, IT IS WELL SETTLED LAW THAT WHAT CAN BE RECTIFIED U/S. 254 (2) IS A MISTAKE, WH ICH IS APPARENT AND PATENT FROM THE RECORD. UNLESS THERE ARE MANIFEST ERRORS, WHICH ARE OBVIOUS , CLEAR AND SELF-EVIDENT, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER IN AN ATTEMPT TO REVIEW T HE ORDER. THE MISTAKE HAS TO BE SUCH FOR WHICH NO ELABORATE REASON OR ENQUIRY IS NECESSARY. THE PO WERS SO CONFERRED U/S. 254 (2) DO NOT CONTEMPLATE REHEARING WHICH WOULD HAVE THE EFFECT O F RE-WRITING AN ORDER AFFECTING THE MERITS OF THE CASE. OTHERWISE THERE WOULD BE NO DISTINCTION B ETWEEN THE POWER TO REVIEW AND THE POWER TO RECTIFY A MISTAKE. THE POINT RAISED IN THE MISC. AP PLICATION SUBMITTED BY THE ASSESSEE VIRTUALLY SEEKS A REVIEW OF THE ORDER PASSED BY THIS TRIBUNAL , WHICH IS CLEARLY BEYOND THE SCOPE OF SECTION 254 (2). 7. IN VIEW OF THE FOREGOING DISCUSSION, WE ARE CONV INCED THAT THERE CANNOT BE ANY DISPUTE WITH THE PROPOSITION THAT POWER UNDER SUB-SECTION ( 2) OF SECTION 254 IS TO RECTIFY THE MISTAKE 4 M.A. NO. 425/AHD/2009 APPARENT FROM THE RECORD, BUT THAT POWER DOES NOT C LOTHE THE TRIBUNAL WITH THE JURISDICTION TO REVIEW OF ITS EARLIER ORDER OR RE-WRITE A FRESH JUD GMENT. BY PRESENT MISCELLANEOUS APPLICATIONS ASSESSEE VIRTUALLY SEEKING REVIEW, THEREFORE, THE M ISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS REJECTED. THE ORDER PRONOUNCED IN THE COURT ON 30.09.2010 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARM A) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 / 09 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE RESPONDENT 3) CIT(A) CONCERNED, (4) CIT CONCERNED,(5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.