COMMISSIONER OF INCOME TAX JALANDHAR-II JALANDHAR V. RAKESH KUMAR AGGARWAL PROP. RAKESH KUMAR, CONTRACTOR

ITA/278/2013

AI Insights

The case involves an appeal by the Commissioner of Income Tax, Jalandhar II against the order of the Income Tax Appellate Tribunal, Amritsar, which had dismissed the revenue's appeal regarding the net profit rate applied to a government contractor, Shri Rakesh Kumar Aggarwal. The Tribunal had previously reduced the net profit rate from 12% to 10%, which was contested by the revenue. The High Court found that the Tribunal's order was not a speaking and reasoned one, leading to the decision to remand the case for fresh consideration.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 770067 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 29-04-2014
• Assessment Year: misc
• Other Referred Cases: M/s Prabhat Kumar Contractor, Sirsa (ITA No.293 of 2008 dated 14.11.2008)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: PANKAJ JAIN; DIVYA SURI; SACHIN BHARDWAJ
• Assessee Lawyers: VIVEK SETHI
• Keywords: Appeal; Assessment Year; Income Tax; Net profit rate; Tribunal
• Section: 143(3); 143(1); 145(3); 260A

Judgement Text

"ITA No.278 of 2013 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.278 of 2013 (O&M) Date of decision: April 29, 2014 The Commissioner of Income Tax, Jalandhar II, Jalandhar ……Appellant Vs. Shri Rakesh Kumar Aggarwal, Prop: Rakesh Kumar Contractor, SCO 17-C, Ladowali Road, District Jalandhar, State Punjab. …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MR. JUSTICE JASPAL SINGH Present: Mr. Vivek Sethi, Advocate for the appellant. Mr. Pankaj Jain, Sr. Advocate with Mr. Divya Suri, Advocate and Mr. Sachin Bhardwaj, Advocate for the respondent. Ajay Kumar Mittal,J. 1. This order shall dispose of ITA Nos.278 and 279 of 2013 as the learned counsel for the parties are agreed that the issue involved in both the appeals is identical. However, the facts are being extracted from ITA No.278 of 2013. 2. ITA No.278 of 2013 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 12.06.2013, Annexure A.3 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in ITA No.222 (ASR)/2013 for the assessment year 2009-10 proposing to raise the following substantial question of law:- “Whether on the facts and circumstances of the case and in the eyes Singh Gurbax 2014.05.27 11:48 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No.278 of 2013 (O&M) 2 of law Income Tax Appellate Tribunal was justified in dismissing the appeal of the revenue without considering the fact that Hon'ble Jurisdictional High Court in the case of M/s Prabhat Kumar Contractor, Sirsa (ITA No.293 of 2008 dated 14.11.2008) on identical facts and in similar line of business has upheld the NP rate of 12%? 3. Briefly, the facts necessary for adjudication of the controversy involved, as narrated in ITA No.278 of 2013 may be noticed. The assessee is a government contractor. He filed his return of income on 28.9.2009 declaring total income of ` 96,71,108/-, which was processed under Section 143(1) of the Act. The Assessing Officer assessed the income of the assessee under Section 143(3) of the Act after rejecting the account books of the assessee under Section 145(3) of the Act working out net profit at the rate of 12% of the net receipts of ` 12,43,70,464/-. Thus, the Assessing Officer assessed total income at ` 1,49,24,455/- as against the net total income of ` 96,71,107/- returned by the assessee thereby making an addition of ` 52,53,348/-. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 11.2.2013, Annexure A.2, the CIT(A) partly allowed the appeal by restricting the net profit rate to 10% as against 12% applied by the Assessing Officer. Feeling aggrieved, both the revenue and the assessee filed appeals before the Tribunal. The Tribunal vide order dated 12.6.2013, Annexure A.3 partly allowed the appeal of the assessee and dismissed the appeal of the revenue. The Tribunal sustained the addition of ` 6 lacs only as against total addition made by the Assessing Officer at ` 52,53,348/- and upheld by the CIT(A) at ` 27,65,939/-. Hence the present appeals by the revenue. 4. We have heard learned counsel for the parties and perused the record. 5. The Tribunal while adjudicating the issue had relied upon the order passed in the case of the assessee for the assessment year 2007-08 as has been Singh Gurbax 2014.05.27 11:48 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No.278 of 2013 (O&M) 3 noticed in para 17.5 of its order. In view of our order of even date passed in ITA Nos.100 and 101 of 2013 wherein after setting aside the impugned order being not a speaking and reasoned one, the matter has been remanded to the Tribunal to decide the issue afresh, we set aside the impugned order dated 12.6.2013, Annexure A.3 in the present appeals and remit the matter to the Tribunal to adjudicate the issue afresh after affording an opportunity of hearing to the parties in accordance with law by passing a speaking well reasoned order. As a result, both the appeals stand allowed. (Ajay Kumar Mittal) Judge April 29, 2014 (Jaspal Singh) 'gs' Judge Singh Gurbax 2014.05.27 11:48 I attest to the accuracy and integrity of this document High Court Chandigarh "