SHRI DHOOP CHAND SOGANI, Jaipur v. ACIT, Jaipur

ITA 1429/JPR/2010 | 2007-2008
Pronouncement Date: 14-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 142923114 RSA 2010
Bench Jaipur
Appeal Number ITA 1429/JPR/2010
Duration Of Justice 6 month(s) 25 day(s)
Appellant SHRI DHOOP CHAND SOGANI, Jaipur
Respondent ACIT, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 14-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 14-07-2011
Assessment Year 2007-2008
Appeal Filed On 20-12-2010
Judgment Text
1 ITA 1429-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 1429/JP2010 ASSTT. YEAR : 2007-08. SHRI DHOOP CHAND SOGANI VS. THE ACIT RANGE-1 753 MANIHARON KA RASTA JAIPUR. KISHANPOLE BAZAR JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BHUPNDRA MANTRI RESPONDENT BY : MS. ROSHANTA MEENA ORDER DATE OF ORDER : 14/07/2011. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS OBJECTING IN CONFIRMING THE APPL ICATION OF PROVISIONS OF SECTION 145(3) AND APPLYING NET PROFIT RATE OF 8% ON CONTRA CT RECEIPTS. THE ASSESSEE IS ALSO OBJECTING IN NOT ALLOWING THE INTEREST AND FINANCIA L EXPENSES WHILE CONFIRMING THE APPLICATION OF NET PROFIT RATE. 3. THE ASSESSEE IS AN ELECTRICAL CONTRACTOR. ON RE CEIPTS OF RS. 18.17 CRORES OR ODD THE ASSESSEE HAS SHOWN NET PROFIT RATE OF 6.21% AGA INST 6.23% DECLARED IN THE IMMEDIATELY PRECEDING YEAR. THE AO NOTICED THAT AS SESSEE HAS NOT MAINTAINED ANY STOCK REGISTER DETAILS OF MATERIAL CONSUMED SITE WISE S TOCK REGISTER AND MATERIAL CONSUMED ON INDIVIDUAL SITE AND CLOSING STOCK OF EACH SITE WAS NOT DETERMINABLE. IN ABSENCE OF THESE 2 DETAILS THE AO FOUND THAT TRUE PROFIT CANNOT BE DE DUCED. THE AO ALSO NOTICED THAT LABOUR EXPENSES OF RS. 2.26 CRORES OR ODD AND ESTABLISHMEN T CHARGES OF RS. 43.91 LACS OR ODD ARE NOT VERIFIABLE. THEREFORE HE REJECTED THE BOOKS OF ACCOUNT AND APPLIED A NET PROFIT RATE OF 8%. THE AO ALSO NOTICED THAT IN EARLIER YEAR ALSO ON SIMILAR FACTS THE BOOKS OF ACCOUNTS WERE REJECTED AND NET PROFIT RATE OF 8% WAS APPLIED AGAINST WHICH NO APPEAL HAS BEEN PREFERRED BY THE ASSESSEE. WHILE APPLYING NET PROF IT RATE THE AO ALSO DISALLOWED INTEREST AND FINANCIAL EXPENSES CLAIMED IN THE PROFIT & LOSS ACCOUNT. THE LD. CIT (A) HAS ALSO CONFIRMED THE ACTION OF THE AO. 4. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN HIS APPEAL IN PART. REGARDING INTEREST AND FINANCIAL EXPENSES IT IS SEEN THAT IN EARLIER YEAR AS WELL A S IN THE SUBSEQUENT YEAR THE AO HAS ALLOWED THESE EXPENSES. THEREFORE IN VIEW OF THE R ULE OF CONSISTENCY THESE EXPENSES HAVE TO BE ALLOWED. 5. REGARDING THE APPLICATION OF NET PROFIT RATE WE FIND THAT TURNOVER OF THE ASSESSEE HAS BEEN INCREASED FROM RS. 12.22 CRORES TO RS. 18. 17 CRORES AND ASSESSEE HAS DECLARED MARGINALLY LOW NET PROFIT RATE. KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT IF A NET PROFIT RATE OF 7.5% IS AP PLIED THEN IT WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY WE DIRECT THE AO TO APPLY NET PROFIT R ATE OF 7.5% AGAINST 6.21% DECLARED BY THE ASSESSEE. WE ORDER ACCORDINGLY. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 14. 07.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER 3 JAIPUR D/- COPY FORWARDED TO :- SHRI DHOOP CHAND SOGANI JAIPUR. THE ACIT RANGE-1 JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 1429/JP/2010) BY ORDER AR ITAT JAIPUR.