The Income-tax Officer,, Kashmir v. M/s. Hilal Mixing Plant, Kashmir

ITA 191/ASR/2013 | 2009-2010
Pronouncement Date: 28-04-2014 | Result: Dismissed

Appeal Details

RSA Number 19120914 RSA 2013
Assessee PAN AAEFH9795B
Bench Amritsar
Appeal Number ITA 191/ASR/2013
Duration Of Justice 1 year(s) 23 day(s)
Appellant The Income-tax Officer,, Kashmir
Respondent M/s. Hilal Mixing Plant, Kashmir
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 28-04-2014
Date Of Final Hearing 23-04-2014
Next Hearing Date 23-04-2014
Assessment Year 2009-2010
Appeal Filed On 04-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU JUDICIAL MEMBER AND SH. B.P.JAIN ACCOUNTANT MEMBER I.T.A. NO.191(ASR)/2013 ASSESSMENT YEAR:2009-10 PAN :AAEFH9795B INCOME TAX OFFICER VS. M/S. HILAL MIXING PLANT ANANTNAG KASHMIR (J&K). WOOKHU KAKAPORA PULWAMA KASHMIR. (APPELLANT) (RESPONDENT) I.T.A. NO.256(ASR)/2013 ASSESSMENT YEAR:2009-10 PAN :AAEFH9795B M/S. HILAL MIXING PLANT VS. INCOME TAX OFFICER WOOKHU KAKAPORA PULWAMA ANANTNAG KASHMIR (J&K) . KASHMIR. (APPELLANT) (RESPONDENT) DEPARTMENT BY:SH. MAHAVIR SINGH DR ASSESSEE BY:SH.M.A. MIR COST ACCOUNTANT DATE OF HEARING:23/04/2014 DATE OF PRONOUNCEMENT: 29.04.2014 ORDER PER BENCH : ITA NOS. 191 & 256(ASR)/2013 2 THESE CROSS APPEALS OF THE REVENUE AND ASSESSEE ARISE FROM THE ORDER OF THE CIT(A) JAMMU DATED 21.01.2013 FOR THE ASSESSMENT YEAR 2009- 10. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF AP PEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DIRECTING THE A.O. TO ADOPT THE NET PROFIT RATE OF 7% OF THE TOTAL CONTRACT RECEIPTS INSTEAD OF 10% APPLIED BY THE AO WHEN THE COMPLETENESS AND CORRECTNESS OF THE VERSIO N OF ACCOUNTS/BOOK RESULTS/BOOKS OF ACCOUNT COULD NOT BE ESTABLISHED AND BOOKS OF ACCOUNT REJECTED U/S 145(3) OF THE INC OME TAX ACT 1961. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DIRECTING THE A.O. TO ADOPT THE NET PROFIT RATE OF 7% OF THE GROSS CONTRACT RECEIPTS INSTEAD OF 10% APPLIED BY THE AO IN VIEW OF THE DECISION OF ITAT CHANDIGARH A BENCH I N THE CASE OF M/S. SHIVAM CONSTRUCTION CO. AND AFFIRMED B Y THE HONBLE HIGH COURT OF P & H IN THEIR ORDER IN ITA N O.183 OF 2007 DATED 14.05.2007. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DIRECTING THE A.O. TO ADOPT THE NET PROFIT RATE OF 7% OF THE TOTAL CONTRACT RECEIPTS INSTEAD OF 10% APPLIED BY THE AO WHEN THE JURISDICTIONAL BENCH OF ITAT AMRITSAR IN T HE CASES OF M/S. POOJA CONSTRUCTION CO. REPORTED IN ITA NO.750( ASR)/1992 HAD HELD THAT THE APPLICATION OF NET PROFIT RATE O F 10% ON GROSS RECEIPTS IS PROPER. THE SAID ORDER OF THE JURISDICT IONAL ITAT HAS BEEN CONFIRMED BY THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN THEIR ORDER IN ITA NO.166 OF 1999 DATED 10.09.2010. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT U/S 69 AT RS.13 00 000/- BY ADMITTING TH E ADDITIONAL EVIDENCES IN THE SHAPE OF SALE DEED FILED BY THE AS SESSEE DURING APPELLATE PROCEEDINGS WHEN THE ASSESSEE DURING ASSE SSMENT PROCEEDINGS NEVER PRODUCED ANY SUCH SALE DEED DESPI TE REPEATED REQUESTS. 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED ITA NOS. 191 & 256(ASR)/2013 3 INVESTMENT U/S 69 AT RS.13 00 000/- BY ADMITTING TH E ADDITIONAL EVIDENCES FILED BY THE ASSESSEE DURING APPELLATE PR OCEEDINGS IN THE SHAPE OF SALE DEED WITHOUT AFFORDING OPPORTUNIT Y TO THE AO UNDER RULE 46A OF THE INCOME TAX RULES 1962 TO EXA MINE THE EVIDENCES/DOCUMENTS. 6. THE APPLICANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND FACTS BY CONFIRMING THE ADDITION OF RS.39 35 000/- MADE AS UNEXPLAINED INVE STMENTS U/S 69 BY THE A.O. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND FACTS B Y APPLICATION OF NET PROFIT RATE OF 7% WHICH IS TOO HIGH AND NEEDS T O BE DELETED. 3. THE APPELLANT RESERVES THE RIGHT TO AMEND ALTER ADD AND MODIFY THE GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN THE PRESENT CASE WAS MADE UNDER SECTION 144 OF THE ACT VIDE AOS ORDER D ATED 27.12.2011. NUMBER OF NOTICES WERE ISSUED AND SERVED ON THE ASS ESSEE BUT NONE ATTENDED ON BEHALF OF THE ASSESSEE. THE AO PROCEEDED TO APPL Y NET PROFIT RATE OF 10% IN VIEW OF THE DECISION OF ITAT CHANDIGARH BENCH I N THE CASE OF M/S. SHIVAM CONSTRUCTION VS. ACIT IN ITA NOS. 383 & 384 /2004 622/2005 385 & 386/2004 AND 728/2005 REFERRED TO IN HIS ORDER A ND APPLIED NET PROFIT RATE OF 10% ON THE GROSS CONTRACT RECEIPTS OF RS.1 88 12 018/- AND WORKED OUT NET PROFIT RATE OF 18 81 201/-. THE AO ALSO MADE AN ADD ITION OF RS.52 35 000/- BEING CASH DEPOSITS IN THE BANK ACCOUNTS. THE ASSE SSEE SUBMITTED THE ITA NOS. 191 & 256(ASR)/2013 4 EXPLANATION THAT THESE SALE PROCEEDS OF THE LAND W ERE SOLD BY THE FATHER OF THE PARTNERS BUT FAILED TO FURNISH/PRODUCE ANY DOCU MENTARY EVIDENCE IN SUPPORT OF THE SAME. 4. THE LD. CIT(A) AFTER ACCEPTING THE EXPLANATION OF THE ASSESSEE PROCEEDED TO APPLY NET PROFIT RATE OF 7% INSTEAD OF 10% APPLIED BY THE AO AND AFTER VERIFYING THE SALE DEED DELETED THE ADDIT ION OF RS.13 00 000/- AND CONFIRMED THE ADDITION OF RS.39 65 000/-.. 5. THE LD. DR AT THE OUTSET ARGUED THAT THE LD. CI T(A) IS NOT JUSTIFIED IN REDUCING NET PROFIT RATE AT 7% AND STRONGLY OPPOSED THE SAME AND PRAYED TO CONFIRM THE ORDER OF THE A.O. IN THIS REGARD. AS RE GARDS THE DELETION OF ADDITION OF RS. 13 LACS THE LD. DR ARGUED THAT THE LD. CIT(A) IS NOT JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCE WHICH WAS NEVE R PRODUCED DURING THE ASSESSMENT PROCEEDINGS. 6. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND ARGUED THAT THE AO AS WELL AS THE LD. CIT(A) DID NOT APPRECIATE WEATHE R THE CONDITIONS IN VALLEY ALLOW THE ASSESSEE TO WORK WHERE THE ASSESSEE HAS BEEN WORKING WHERE COST OF MATERIAL LABOUR AND OVERHEADS WORKS ARE HIGHER THA N OTHER PARTS OF THE COUNTRY. HE RELIED UPON THE DECISIONS OF ITAT AMRITSAR BENC H IN THE CASE OF MOHAN SINGH CONTRACTOR GURDASPUR VS. ITO GURDASPUR IN I TA NO.59(ASR)/2012 DATED 5.6.2012 IN THE CASE OF ITO VS. SURINDER PAL NAYYAR CONTRACTOR NAWANSHAHAR IN ITA NO.366(ASR)/2010 DATED 30.04.201 1 AND IN THE CASE OF ITA NOS. 191 & 256(ASR)/2013 5 SATISH KUMAR AGGARWAL VS. ADDL. CIT IN ITA NO. 328( ASR)/2013 DATED 26.8.2013 WHERE NET PROFIT RATE OF 5% HAS BEEN AP PLIED ON ALMOST IDENTICAL FACTS. 6.1. AS REGARDS THE ADDITION OF RS.52 35 000/- HE ARGUED THAT THE ASSESSEE HAS PRODUCED TWO SALE DEEDS ONE OF WHICH WAS DATED AUGUST 2008 AND ANOTHER WAS APRIL 2010. THE LD. CIT(A) ALLOWED THE RELIEF ON AN AMOUNT OF RS.13 00 000/- ONLY BUT DID NOT ALLOW RELIEF ON ACCOUNT OF SALE DEED EXECUTED IN THE MONTH OF APRIL 2010. IT WAS ARGUED AND EXPLAINED TO THE LD. CIT(A) THAT THE AMOUNT WAS RECEIVED IN FULL BEFORE DEPOSIT IN THE BANK AND SALE DEED WAS EXECUTED IN THE MONTH OF APRIL 2010 ONLY. SIMILARLY THE AMOUNT OF RS.18 85 000/- WAS RECEIVED BEFORE THE DA TE OF DEPOSIT WHICH WAS NOT APPRECIATED BY THE LD. CIT(A). THEREFORE NO AD DITION ON THIS ACCOUNT CAN BE MADE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS REGARDS THE ADDITION U/S 144 OF THE ACT IT IS E VIDENT FROM RECORD THAT ASSESSEE HAS NOT CO-OPERATED IN THE ASSESSMENT PROC EEDINGS AND THEREFORE THERE IS NO INFIRMITY IN THE ORDER OF THE A.O. WHO HAS RIGHTLY PASSED ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT. AS R EGARDS APPLICATION OF NET PROFIT RATE THE DECISION ON ACCOUNT OF NET PROFIT RATE SHOULD BE ON THE BASIS OF MATERIAL ON RECORD. THE AO HAS NOT BROUGHT ON RECOR D HOW THE CASES RELIED UPON ARE IDENTICAL TO THE FACTS OF THE PRESENT CASE . THE LD. CIT(A) HAS RELIED ITA NOS. 191 & 256(ASR)/2013 6 UPON THE DECISION OF ITAT AMRITSAR BENCH IN THE C ASE OF M/S. CONSTRUCTION ENGINEERS SRINAGAR IN ITA NO.493(ASR )/2010 DATED 11.05.2012. IN FACT IN SIMILAR SET OF FACTS & CIRC UMSTANCES THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED UPON VARIOUS DECISIONS OF ITAT AMRITSAR BENCH IN THE CASE OF MOHAN SINGH CONTRACTOR GURDASPUR VS . ITO GURDASPUR IN ITA NO.59(ASR)/2012 DATED 5.6.2012 IN THE CASE OF ITO VS. SURINDER PAL NAYYAR CONTRACTOR NAWANSHAHAR IN ITA NO.366(ASR)/2 010 DATED 30.04.2011 AND IN THE CASE OF SATISH KUMAR AGGARWAL VS. ADDL. CIT IN ITA NO. 328(ASR)/2013 DATED 26.8.2013 WHERE NET PROFI T RATE OF 5% HAS BEEN APPLIED ON ALMOST IDENTICAL FACTS. WE HAVE CONSIDER ED THE EXPLANATION OF THE ASSESSEE AND SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND IN THE INTEREST OF JUSTICE WE DIRECT THE A.O. APPLY NET PROFIT RATE O F 5% ON THE GROSS CONTRACT RECEIPTS DECLARED. 7.1. AS REGARDS THE ADDITION ON ACCOUNT OF CASH DEP OSITS IN THE BANK ACCOUNT IT WAS EXPLAINED BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A) THAT THE SAID DEPOSIT IS ON ACCOUNT OF LOAN FROM TH E FATHER OF THE PARTNERS BUT THE SAME COULD NOT BE SUBMITTED BEFORE THE AO SINCE THE MATTER WAS BEING TIME BARRED AS ARGUED BY THE LD. COUNSEL FOR THE AS SESSEE. THE SAME WAS PRODUCED BEFORE THE LD. CIT(A) WHO IN FACT HAS RI GHTLY DELETED RS.13 00 000/- . WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH IS WELL REASONED ONE. BUT AS REGARDS THE CONFIRMATION OF ADDITION OF ITA NOS. 191 & 256(ASR)/2013 7 RS.39 35 000/- IT WAS EXPLAINED THAT THE AMOUNTS WERE RECEIVED BEFORE DEPOSITING IN THE BANK ACCOUNT AGAINST THE SALE OF LAND. THE EXPLANATION OF THE ASSESSEE WAS REJECTED WITHOUT ANY VALID REASON BY THE LD. CIT(A). IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.39 35 000/- WHICH IS DIRECTED TO BE DELETED. ACCORDINGLY THE APPEAL OF THE REVENUE IS DISMISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWED. 8 IN THE RESULT THE APPEAL OF THE REVENUE IN ITA N O.191(ASR)/2013 IS DISMISSED AND THAT OF THE ASSESSEE IN ITA NO.256(AS R)/2013 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH APRIL 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. HILAL MIXING PLANT. PULWANA KASH MIR. 2. THE A.O. ANANTNAG KASHMIR. 3. THE CIT(A) JAMMU 4. THE CIT JAMMU. 5. THE SR DR ITAT AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR