The ACIT, 1(1), Bhopal v. M/s S.K.Jain, Bhopal

ITA 149/IND/2011 | 2007-2008
Pronouncement Date: 15-02-2012 | Result: Dismissed

Appeal Details

RSA Number 14922714 RSA 2011
Assessee PAN AAOFS1606A
Bench Indore
Appeal Number ITA 149/IND/2011
Duration Of Justice 7 month(s) 15 day(s)
Appellant The ACIT, 1(1), Bhopal
Respondent M/s S.K.Jain, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 15-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 15-02-2012
Assessment Year 2007-2008
Appeal Filed On 30-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARM A A.M. PAN NO. : AAOFS1606A I.T.A.NO. 64/IND/2011 A.Y. : 2007 - 08 M/S. S.K.JAIN DY. CIT BHOPAL VS 1(1) BHOPAL. APPELLANT RE SPONDENT I.T.A.NO. 149/IND/2011 A.Y. : 2007 - 08 ACIT M/S. S.K.JAIN 1(1) VS BHOPAL BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI H.P.VERMA AND SHRI ASHISH GOYAL ADVOCATES RESPONDENT BY : SHRI ARUN DEWAN SR .DR DATE OF H EARING : 19 . 1 2 .201 2 DATE OF PRONOUNCEMENT : 15 . 0 2 .201 2 O R D E R PER R. C. SHARMA A.M. THESE ARE CROSS APPEALS AGAINST THE ORDER OF CIT(A )-I BHOPAL DATED 30.3.2011 FOR THE ASSESSMENT YEAR 200 7-08. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS :- -: 2: - 2 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE INVOKI NG OF THE PROVISIONS OF SECTION 145(3) OF THE ACT BY REJECTING THE BOOKS OF ACCOUNT WITHOUT ACCEPTING TH E EXPLANATION OFFERED BY THE APPELLANT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITI ON OF RS. 7 16 800/- OUT OF TOTAL ADDITION OF RS. 56 43 419/- BY ESTIMATING THE NET PROFIT @ 6.5 % ON ACCOUNT OF SUPPRESSED NET PROFIT WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLAN T THAT IN EARLIER YEARS THE NET PROFIT WAS ACCEPTED 2 6% AND WITHOUT ACCEPTING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT UNDER THE CIRCUMSTANCES CHARGING OF INTEREST U/S 234D IS NOT JUSTIFIED. 4. THAT UNDER THE CIRCUMSTANCES INITIATION OF PENALTY PROCEEDINGS U/S 271(1) IS NOT JUSTIFIED. 3. THE REVENUE HAS TAKEN THE FOLLOWING GROUND :- -: 3: - 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 49 26 619/- OUT OF RS. 56 43 419/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSION OF NET PROFIT. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR-SHIP DO ING MAINLY THE WORK OF IRRIGATION DEPARTMENT OF M.P. GOVERNMEN T. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS FILE D THE RETURN SHOWING INCOME OF RS. 9 30 00 580/- WHICH ARE FROM CONTRACT RECEIPTS. DURING THE YEAR THE ASSESSEE HAS SHOWN T OTAL CONTRACT RECEIPTS OF RS. 1 44 18 05 859/- WHICH INC LUDES WORK GIVEN ON SUBCONTRACT OF RS. 78 37 04 892/- AND AFTE R CLAIMING THE EXPENSES HAS SHOWN NET PROFIT OF RS. 9 30 00 58 0/- WHICH WORKS OUT TO 6.45 %. THE ASSESSING OFFICER IN THE A SSESSMENT HAS ESTIMATED THE SAME @ 8% ON WORK DONE BY THE ASS ESSEE OF RS. 60 70 32 574/- AND @ 6% ON THE WORK DONE BY THE SUB CONTRACT BASIS OF RS. 83 47 73 285/- AND THEREBY MA DE THE ADDITION OF RS. 56 43 419/-. -: 4: - 4 5. BY THE IMPUGNED ORDER THE LD. CIT(A) AFTER APPLYIN G NET PROFIT RATE OF 6.5 % CONFIRMED THE ADDITION OF RS. 7 16 800/- AFTER HAVING THE FOLLOWING OBSERVATIONS :- IT IS SEEN FROM THE PERUSAL OF ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN TOTAL CONTRACT RECEIPT OF RS.1 44 18 05 850/- WHICH INCLUDES WORK GIVEN ON SUB-CONTRACT ALSO AND AFTER CLAIMING EXPENSES NET PROFIT HAS BEEN SHOWN AT RS.9 30 00 580/- WHICH COMES TO 6.45 %. THE AO HAS ESTIMATED NET PROFIT @ 8 % ON WORK DONE BY THE APPELLANT AMOUNTING TO RS.60 70 32 574/- AND 6 % ON WORK DONE ON SUB-CONTRACT BASIS AMOUNTING TO RS.83 47 73 285/- (GROSS) AND HAS MADE AN ADDITION OF RS. 56 43 419/-. THE BOOKS OF ACCOUNT WERE REJECTED BY THE AO AND THE NET PROFIT WAS ESTIMATED IN THE PRESENT CASE. I HAVE ALREADY HELD THAT THE AO HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT WHILE ADJUDICATING THE PRECEDING GROUND. NOW COMES THE PERCENTAGE OF NET PROFIT WHICH SHOULD BE ADOPTED WHICH IS REASONABLE AND FAIR IN THE APPELLANT'S CASE. IF THE AO'S ESTIMATION IS ANALYZED IN RESPECT OF THE TOTAL CONTRACT WORK OF RS. L 44 18 05 850/- THE ESTIMATIO N OF NET PROFIT ON THE BASIS OF ADDITION MADE OF RS.56 43 419/- COMES TO 6.84 % OF TOTAL WORK DONE -: 5: - 5 INCLUDING WORK GIVEN ON SUBCONTRACT WHEREAS THE APPELLANT HAS SHOWN THE NET PROFIT @ 6.45 %. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN TOTALITY ORDER OF THE ITAT OF EARLIER YEARS AND ORDER OF MY PREDECESSOR FOR A.Y. 2006-07 IN WHICH THE NET PROFIT WAS ADOPTED @ 6 % ON THE TOTAL WORK DONE INCLUDING SUB-CONTRACT I AM OF THE CONSIDERED OPINION THAT NET PROFIT BE ESTIMATED @ 6.50 % OF TH E TOTAL WORK DONE. THOUGH IN EARLIER YEARS THE NET PROFIT WAS ACCEPTED @ 6 % BY THE CIT (A) AND UPHELD BY THE HON'BLE ITAT BUT IN THIS YEAR THE APPELLANT HIMSELF HAS SHOWN NET PROFIT @ 6.45 % WHICH MEANS THAT NET PROFIT RATIO HAS INCREASED AND BOOK RESULT S ARE BETTER COMPARED TO THE EARLIER YEARS AND HENCE IT WOULD BE REASONABLE TO ADOPT 6.50 % INSTEAD OF 6.45 % LOOKING INTO THE PAST HISTORY OF THE APPELLANT AN D NATURE OF THE WORK BEING THE SAME AND WHICH WILL ALSO MEET THE ENDS OF JUSTICE. THUS BY TAKING THE NET PROFIT @ 6.50 % OF THE TOTAL WORK DONE OF RS.1 44 18 05 859/- IT COMES TO RS. 9 37 17 380/- WHEREAS THE APPELLANT HAS SHOWN NET PROFIT OF RS.9 30 00 580/- AND HENCE ADDITION OF RS.7 16 800/- ( RS. 93717380 RS.93000580) IS SUSTAINED AND THE APPELLANT GETS RELIEF OF RS. 49 26 619/-. THUS THIS GROUND OF APPEAL IS PARTLY ALLOWED. -: 6: - 6 6. AGAINST THIS ORDER OF CIT(A) BOTH ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT AFTER POINTING OUT CERTAIN DEFECTS THE ASSESSING OFFICER HAS REJECTED THE BOOK RESULT OF T HE ASSESSEE AND COMPUTED PROFIT BY APPLYING NET PROFIT RATE OF 8% ON THE WORK EXECUTED BY ASSESSEE HIMSELF AND 6 % ON THE WO RK SUB- CONTRACTED. THE CIT(A) AFTER DISCUSSING THE REASONS GIVEN BY THE ASSESSING OFFICER FOR REJECTION OF BOOKS OF ACC OUNT UPHELD HIS ACTION. HOWEVER ON MERIT OF ADDITION THE LD. CIT(A) FOUND THAT ON THE SIMILAR FACTS IN EARLIER YEAR THE TRIB UNAL IN ASSESSEES OWN CASE HAS UPHELD THE NET PROFIT RATE OF 6 % IN THE ASSESSMENT YEAR 2004-05. SINCE DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HIMSELF HAS SHOWN NET P ROFIT RATE OF 6.45 % THE CIT(A) APPLIED NET PROFIT RATE OF 6. 5 % AND COMPUTED PROFIT AT RS. 9 37 17 380/-/- AS AGAINST NET PROFIT OF RS. 9 30 00 580/- SHOWN BY THE ASSESSEE. AS THE CIT (A) HAS ALREADY TAKEN INTO CONSIDERATION THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE ON THE SIMILAR FACTS AND ALSO T AKEN THE FACT OF REJECTION OF BOOKS OF ACCOUNT UNDER CONSIDE RATION -: 7: - 7 APPLIED THE MORE APPROPRIATE RATE OF NET PROFIT AT 6.5 % THEREBY RETAINING ADDITION OF RS. 7 16 800/- WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). 8. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE AND REVENUE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 15 TH FEBRUARY 2012. (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH FEBRUARY 2012. CPU* 1415