The ACIT, Navsari Circle,, Navsari v. Shri Kamlesh B.Lad, Navsari

ITA 1078/AHD/2007 | 2003-2004
Pronouncement Date: 04-03-2011 | Result: Dismissed

Appeal Details

RSA Number 107820514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 1078/AHD/2007
Duration Of Justice 3 year(s) 11 month(s) 22 day(s)
Appellant The ACIT, Navsari Circle,, Navsari
Respondent Shri Kamlesh B.Lad, Navsari
Appeal Type Income Tax Appeal
Pronouncement Date 04-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 04-03-2011
Date Of Final Hearing 09-02-2011
Next Hearing Date 09-02-2011
Assessment Year 2003-2004
Appeal Filed On 13-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT JUDICIAL MEMBER) ITA NO.1078/AHD/2007 WITH CO NO.110/AHD/2007 [ASSTT. YEAR : 2003-2004] ACIT NAVSARI CIRCLE NAVSARI. VS. SHRI KAMLESH B. LAD RUBALASHIRWAD SOCIETY OPP: REST HOUSE NAVSARI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SUMAN R. DARSI ASSESSEE BY : SHRI RASESH SHAH O R D E R PER G.D. AGARWAL VICE-PRESIDENT : THIS IS REVENUES APPEAL AND ASSESSEES CO AGAINST THE ORDER OF THE C OMMISSIONER OF INCOME TAX(APPEALS) VALSAD DATED 27.11.2006 ARISIN G OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3 ) OF THE INCOME TAX ACT 1961. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE DERI VES INCOME FROM BUSINESS OF ROAD CONSTRUCTION. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE DISCLOSED RECEIPT OF RS.3 83 43 322/- ON W HICH NET PROFIT OF RS.3 08 267/- WAS DISCLOSED. THE RATE OF NET PROFI T WAS 0.80%. THE AO NOTICED SEVERAL DEFECTS IN THE ASSESSEES BOOKS OF ACCOUNTS AND THEREFORE HE REJECTED THE BOOKS OF ACCOUNTS AND DETERMINED IN COME OF THE ASSESSEE BY APPLYING NET PROFIT RATE OF 5%. WHILE APPLYING THE NET PROFIT RATE THE AO HAS ALSO REFERRED SOME COMPARABLE CASES. ON APP EAL THE CIT(A) UPHELD THE ACTION OF THE AO SO FAR AS THE REJECTION OF THE BOOKS OF ACCOUNTS IS CONCERNED. HOWEVER HE REDUCED THE RAT E OF NET PROFIT TO 2% ITA NO.1078/AHD/2007 WITH CO NO.110/AHD/2007 -2- AS AGAINST 5% APPLIED BY THE AO. BOTH THE PARTIES AGGRIEVED WITH THE ORDER OF THE CIT(A) ARE IN APPEAL/CO BEFORE US. 3. IN THE REVENUES APPEAL THE ONLY GROUND IS AGAI NST THE REDUCTION IN THE ADDITION MADE BY THE AO. WHILE IN THE ASSESSEE S CO THE ONLY GROUND IS AGAINST THE ADDITION SUSTAINED. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE CIT(A) HAS CONSIDERED THE ENTIRE FACTS IN DETAIL. HE HAS ALSO CONSIDERED THE ASSESSEES CONT ENTION THAT THE ASSESSEES NP IS LOWER AS COMPARED TO OTHER TWO CAS ES BECAUSE OF LIABILITY OF INTEREST. HE ALSO CONSIDERED THE OTHER DEFECTS POINTED OUT BY THE AO IN THE ASSESSEES BOOKS OF ACCOUNTS. CONSIDERING ALL THE FACTS THE CIT(A) HELD AS UNDER: 6.4 ... HOWEVER UNDER THE FACTS AND CIRCUMSTANCE S OF THE CASE THE ESTIMATION OF PROFIT AT THE RATE OF 5% IN THE C ASE OF THE APPELLANT IS VERY MUCH ON HIGHER SIDE BECAUSE THE COMPARATIVE DA TA FURNISHED BY THE AO ITSELF SUGGEST THAT THE INTEREST EXPENSES IN OTH ER TWO CASES WERE MUCH LOWER WHEREAS THE TURNOVER OF BOTH OF THEM WERE MUC H HIGHER AS COMPARED TO THE APPELLANT'S CASE. FROM THE COMPARAT IVE DATA IT CAN HE SEEN THAT THE PROFIT BEFORE INTEREST OF THE OTHER T WO CONCERNS WAS AROUND 7% AGAINST 10.5% IN THE CASE OF THE APPELLANT WHICH SUGGESTS THAT THE APPELLANT HAD SHOULDERED HIGHER BURDEN OF FINANCE C HARGES TO THE EXTENT OF AT CAST 3.5% AND THE APPELLANT DESERVES CONCESSION TO THAT EXTENT FROM THE ESTIMATION OF 5% HOWEVER CONSIDERING THE OTHER DEF ECTS LIKE INSUFFICIENT RECORDS FOR LABOUR PAYMENT CHARGES AND NON MAINTENA NCE OF DAY TO DAY STOCK REGISTER. I AM OF THE OPINION THAT IT IS REAS ONABLE TO ESTIMATE THE NET PROFIT AT 2% OF GROSS CONTRACT RECEIPT OF RS.3 83 4 3 322/- WHICH COMES TO RS.7 66 866/-. THE APPELLANT HAS DECLARED NET PROFI T OF RS.3 08 267/- AND THEREFORE THE ADDITION TO THE TUNE OF RS.4 58 599/ - (RS.7 66 866/- - RS.3 08 267/-) IS HEREBY CONFIRMED. AS A RESULT TH E ADDITION IS REDUCED TO RS.4 58 599/- FROM RS.16 08 900/-. ITA NO.1078/AHD/2007 WITH CO NO.110/AHD/2007 -3- 5. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES WE DO NOT FIND ANY JUS TIFICATION FOR INTERFERING WITH THE ORDER OF THE CIT(A). 6. IN RESULT THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 4 TH MARCH 2011 SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 04-03-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD