Sh. Rajesh Kumar, Rohtak v. ITO, Rohtak

ITA 2404/DEL/2011 | 2007-2008
Pronouncement Date: 29-03-2012 | Result: Partly Allowed

Appeal Details

RSA Number 240420114 RSA 2011
Assessee PAN AEZPG7579P
Bench Delhi
Appeal Number ITA 2404/DEL/2011
Duration Of Justice 10 month(s) 18 day(s)
Appellant Sh. Rajesh Kumar, Rohtak
Respondent ITO, Rohtak
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 29-03-2012
Date Of Final Hearing 22-03-2012
Next Hearing Date 22-03-2012
Assessment Year 2007-2008
Appeal Filed On 11-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `F : NEW DELHI) BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.2404/DEL./2011 (ASSESSMENT YEAR : 2007-08) RAJESH KUMAR VS. ITO WARD 2(1) 198/34 JANTA COLONY ROHTAK. ROHTAK (PAN/GIR NO.AEZPG7579P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NAVIN GUPTA ADV. REVENUE BY : SMT. RENUKA JAIN GUPTA. SR.DR ORDER PER U.B.S. BEDI J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) ROHTAK DATED 17.03.2011 RELEVANT TO ASSESSMENT YE AR 2007-08 WHEREIN FOLLOWING EFFECTIVE SOLITARY GROUND HAS BEEN RAISED: THAT THE CIT(A) ERRED IN ESTIMATING THE PROFITS OF APPELLANT AT 8% OF TURNOVER ALTHOUGH THE AUDITED BOOKS OF ACCOUNTS WERE PRODUCE D BEFORE ASSESSING OFFICER AND BEFORE CIT(A) AND IN HIS REMAND REPORT ASSESSI NG OFFICER HIMSELF RECOMMENDS ONLY DISALLOWANCES TO BE MADE OUT OF CER TAIN EXPENSES FOR WANT OF VOUCHERS/BILLS. 2. THE APPEAL OF THE ASSESSEE WAS FOUND TO HAVE BEE N FILED LATE FOR WHICH DEFECT MEMO STANDS ALREADY ISSUED. THE ASSESSEE IN THIS C ASE HAS ALREADY FILED CONDONATION OF DELAY PETITION SUPPORTED BY AFFIDAVIT IN WHICH IT H AS BEEN CONTENDED AS UNDER: 1. THAT THE APPEAL OF AFORESAID ASSESSEE WAS DECID ED BY THE CIT(A) ROHTAK VIDE HIS ORDER DATED 23.9.2010 WHICH WAS SERVED UP ON THE ASSESSEE ON 01.10.2010. AFTER RECEIVING THE ORDER ASSESSEE WA S ADVISED BY HIS I.T.A. NO.2404/DEL./2011 (A.Y. 2007-08) 2 COUNSEL TO FILE RECTIFICATION APPLICATION AND ASSES SEE FILED AN APPLICATION U/S 154 BEFORE CIT(A) ON 25.10.2010 WHICH WAS REJE CTED BY THE CIT(A) VIDE HIS ORDER DATED 17.3.2011 SERVED UPON THE ASS ESSEE ON 4.4.2011. 2. AFTER RECEIVING THE ORIGINAL ORDER DATED 23.9.20 10 ASSESSEE GOT LEGAL ADVICE THAT NO APPEAL IS REQUIRED TO FILE BEFORE HO NBLE ITAT TILL THE DISPOSAL OF OUR APPLICATION U/S 154 BY THE CIT(A). 3. AFTER RECEIVING THE ORDER OF CIT(A) REJECTING AP PLICATION U/S 154 ASSESSEE CONTACTED ANOTHER COUNSEL SHRI NAVIN GUPTA ADVOCAT E TO FILE APPEAL BEFORE HONBLE ITAT. MY COUNSEL SHRI NAVIN GUPTA ADVOCATE TO FILE APPEAL BEFORE HONBLE ITAT. MY COUNSEL THEN ADVISE D ME THAT THE APPEAL SHOULD HAVE BEEN PREFERRED IMMEDIATELY AFTER RECEIV ING THE ORIGINAL ORDE OF CIT(A) DATED 23.9.2010. NOW WE ARE FILING OUR APPEAL WITHIN 60 DAYS FROM THE RECEIPT OF ORDER U/S 154. WE ARE ALSO FIL ING THIS APPLICATION FOR CONDONATION OF DELAY ALONG WITH OUR APPEAL ON MERIT S. I THEREFORE PRAY TO YOUR HONOUR THAT SINCE I WAS UNDER BONAFIDE BELIEF THAT APPEAL WILL BE FILED AFTER MY APPLICATION U/S 154 WILL BE DECIDED BY THE CIT(A) DELAY IN FILING THE APPEAL MAY KINDLY BE CO NDONED AND THE APPEAL MAY KINDLY BE DECIDED ON MERITS AND OBLIGE. 3. IN ORDER TO SUPPORT THE PETITION ASSESSEE SUBMI TTED THAT ON THE BASIS OF LEGAL ADVICE OBTAINED FROM PREVIOUSLY ENGAGED COUNSEL AS SESSEE INSTEAD OF FILING APPEAL HAD FILED RECTIFICATION APPLICATION DATED 25.10.2010 BE FORE CIT(A) WHEN THE ORDER OF CIT(A) WAS SERVED ON THE ASSESSEE ON 1.10.10 AND ON REJECT ION OF SUCH RECTIFICATION APPLICATION ORDER WAS SERVED ON THE ASSESSEE IN APRIL 2011 HE FILED APPEAL AFTER SEEKING FRESH ADVICE FROM A NEWLY ENGAGED COUNSEL IN MAY 2011. THE ASS ESSEES COUNSEL FURTHER SUBMITTED THAT ASSESSEE WAS UNDER BONA FIDE BELIEF THAT APPEA L WILL BE FILED AFTER APPLICATION U/S 154 OF THE ACT FILED BEFORE CIT(A) IS DECIDED AND PROS ECUTING OTHER REMEDY WITHOUT FILING PROPER APPEAL IS A SUFFICIENT CAUSE AS HELD BY VARI OUS COURTS INCLUDING THE FOLLOWING: I.T.A. NO.2404/DEL./2011 (A.Y. 2007-08) 3 1. S.B. SINGAR SINGH & SONS VS. ITAT & ANOTH4ER 58 I.T.R. 626 (ALL.) 2. CIT VS. K.S.P. SHANMUGAVEL NADAR & OTHERS153 I.T .R. 596 (MAD.) 3. PEOPLE EDUCATION AND ECONOMIC DEVELOPMENT SOCIET Y (PEEDS) VS. ITO 100 ITD 87 (CHENNAI)( TM) THEREFORE APPLICATION OF THE ASSESSEE SHOULD BE A LLOWED TO ADMIT THE APPEAL FOR HEARING. 4. LD.DR SUBMITTED THAT SINCE DELAY HAS BEEN CAUSED IN FILING OF THE APPEAL WITHOUT SUFFICIENT CAUSE SO SAME SHOULD NOT BE ADMITTED AN D IT SHOULD BE DISMISSED. 5. WE HAVE HEARD BOTH THE SIDES AND MATERIAL ON REC ORD AS WELL AS PRECEDENTS RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE ON POINT OF CONDONATION OF DELAY IN FILING OF THE APPEAL. THE ASSESSEE HAS MAINLY CONTENDED IN CONDO NATION PETITION THAT HE WAS PROSECUTING OTHER REMEDY OF FILING RECTIFICATION AP PLICATION BEFORE CIT(A) ON THE ADVICE RECEIVED FROM HIS EARLIER ENGAGED COUNSEL BY FILIN G APPLICATION BY THE ASSESSEE U/S 154 OF THE ACT WITHIN 30 DAYS OF THE RECEIPT OF THE CIT(A) S ORDER WHICH HAS BEEN DECIDED IN THE MONTH OF MARCH AND IT CAME TO BE SERVED IN THE MONT H OF APRIL AND ASSESSEE FILED APPEAL IN MAY ITSELF. SO THERE WAS BONA FIDE REASON IN D ELAYED FILING OF APPEAL. AFTER CAREFULLY CONSIDERING THE PLEA RAISED IN THE LIGHT OF THE MAT ERIAL ON RECORD AND PRECEDENTS CITED WE ARE CONVINCED THAT THE ASSESSEE WAS PREVENTED BY SU FFICIENT CAUSE FROM NOT FILING THE APPEAL IN TIME. THEREFORE WHILE CONDONING THE DEC AY CAUSED IN FILING OF THE APPEAL WE ADMIT THE APPEAL. 6. AS REGARDS CASE ON MERITS IS CONCERNED THE ASSE SSING OFFICER NOTED IN THE ASSESSMENT ORDER THAT ASSESSEE IS A CIVIL SANITARY AND WATER SERVICES CONTRACTOR WHO DECLARED N.P. @ 2.27% ON GROSS PAYMENT OF RS.58788 25/- WHICH WAS EXTREMELY ON LOWER SIDE. COMPUTERIZED BOOKS OF ACCOUNT WITH VOUC HERS OF PURCHASE OF RAW MATERIALS I.T.A. NO.2404/DEL./2011 (A.Y. 2007-08) 4 WERE PRODUCED AND TEST CHECKED. THE ASSESSEE INCUR RED RS.29 02 275/- UNDER SUB-HEAD WAGES WHICH IS 49.36% OF THE GROSS VALUE OF CONTRAC T RECEIPTS. THE ASSESSEE WAS ASKED TO PRODUCE MUSTER /ACQUITTANCE ROLL AND AFTER NOTIN G THAT BOOKS AND PAPERS PRODUCED ARE NOT CORRECT AND COMPLETE AS PROVIDED IN SECTION 145 OF THE ACT WHILE REJECTING THE BOOKS OF ACCOUNT ASSESSING OFFICER ESTIMATED INCOME FROM CONTRACT WORK AT 12% OF THE GROSS RECEIPTS AND ACCORDINGLY DETERMINED THE INCOME. 7. AGAINST THIS ASSESSEE PREFERRED APPEAL AND CIT( A) AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER AND CONSIDERING THE REPL Y OF THE ASSESSEE HAS CONCLUDED TO REDUCE THE NET PROFIT TO 8% INSTEAD OF 12% DETERMIN ED BY THE ASSESSING OFFICER. 8. STILL AGGRIEVED ASSESSEE HAS COME UP IN FURTHER APPEAL AND IT WAS STRONGLY PLEADED THAT DURING THE FIRST APPELLATE PROCEEDINGS ASSESS EE FILED CERTAIN DOCUMENTS AND MATERIAL WHICH WERE FORWARDED TO THE ASSESSING OFFICER FOR S ENDING REMAND REPORT WHO SUBMITTED THE SAME IN WHICH EXCEPT SEVEN ITEMS WITH RESPECT T O WHICH ASSESSEE COULD NOT PRODUCE BILLS/SUPPORTING DOCUMENTS WHEN OTHER REQUIREMENTS WERE DULY COMPLETED IN REMAND PROCEEDINGS BEFORE THE ASSESSING OFFICER WHO IS ST ATED TO HAVE EXAMINED THE ACCOUNT BOOKS AND SUPPORTING BILLS/VOUCHERS IN RESPECT OF E XPENSES DEBITED IN THE P&L A/C EXCEPT CAR EXPENSES DIESEL AND PETROL EXPENSES MISCELLAN EOUS EXPENSES STAFF WELFARE TRAVELING TELEPHONE AND WATER EXPENSES AGGREGATING TO RS.1 63 522/- AND IF FOR ANY REASON DISALLOWANCE HAS TO BE MADE THAT COULD BE MADE OUT OF THESE EXPENSES AND THERE IS NO REASON FOR REJECTING BOOK RESULT OR APPLYING PROFIT RATE. IT WAS THUS PLEADED THAT SOME PROPORTION OF THESE EXPENSES FOR WHICH ASSESSEE CO ULD NOT BE ABLE TO PRODUCE I.T.A. NO.2404/DEL./2011 (A.Y. 2007-08) 5 DOCUMENTARY EVIDENCE IN REMAND PROCEEDINGS SHOULD BE DISALLOWED AND BALANCE OF THE ADDITION MAY BE DELETED. 9. LD.DR HAS BEEN HEARD WHO RELIED UPON THE ORDERS OF CIT(A) AND PLEADED THAT IN VIEW OF DISCREPANCIES AND NON-PRODUCTION OF VARIOUS DETAILS AND DOCUMENTS ASSESSING OFFICER MADE ADDITION BY APPLYING PROFIT RATE OF 12 % WHEREAS CIT(A) AFTER OBTAINING REMAND REPORT HAS RIGHTLY CONCLUDED TO RESTRICT SUC H PROFIT RATE OF 8%. SINCE SUFFICIENT RELIEF HAS ALREADY BEEN GIVEN BY THE CIT(A). THERE FORE ORDER OF CIT(A) SHOULD BE UPHELD AND APPEAL OF THE ASSESSEE SHOULD BE DISMISS ED. 10. WE HAVE HEARD BOTH THE SIDES CONSIDERED THE MA TERIAL ON RECORD AND FIND THAT IN FIRST APPEAL ASSESSEE PRODUCED CERTAIN MATERIAL/DO CUMENTS AND CIT(A) HAS SENT THOSE DETAILS AND DOCUMENTS TO THE ASSESSING OFFICER FOR OBTAINING HIS REMAND REPORT WHO IN TURN CONDUCTED PROPER ENQUIRIES AND EXAMINED THE B OOKS OF ACCOUNT SUPPORTING BILLS AND VOUCHERS PRODUCED IN RESPECT OF EXPENSES DEBITED IN THE P&L A/C AND FURTHER NOTED THAT EXCEPT FOR SEVEN ITEMS OF EXPENDITURE FOR WHICH AS SESSEE HAS NOT BEEN ABLE TO PRODUCE BILLS/SUPPORTING DOCUMENTS I.E. IN RESPECT OF CAR E XPENSES DIESEL AND PETROL EXPENSES MISCELLANEOUS EXPENSES WELFARE STAFF TRAVELING T ELEPHONE AND WATER EXPENSES WHOSE TOTAL COMES TO RS.1 63 522/- AND IT IS THE MAIN CO NTENTION OF THE ASSESSEE THAT IF ANY ADDITION HAS TO BE MADE IT SHOULD BE MADE OUT OF TH ESE EXPENSES AND THERE IS NO JUSTIFICATION FOR ADOPTING PROFIT RATE OF 12% OR 8% . AFTER CONSIDERING THE RIVAL SUBMISSIONS IN THE LIGHT OF REMAND REPORT SENT BY T HE ASSESSING OFFICER IN WHICH HE HAS ONLY OBJECTED TO NON-PRODUCTION OF BILLS/SUPPORTING DOCUMENTS IN RESPECT OF SEVEN ITEMS AND IT IS NOT THE CASE OF THE DEPARTMENT THAT ASSES SEE HAS NOT INCURRED ANY OF SUCH I.T.A. NO.2404/DEL./2011 (A.Y. 2007-08) 6 EXPENSES AS MENTIONED BY THE ASSESSING OFFICER. TH EREFORE KEEPING IN VIEW THE ENTIRETY OF FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT IT WOULD MEET THE ENDS OF JUSTICE IF DISALLOWANCE OF 25% OF SUCH EXPENSES IS MADE OUT OF THE CLAIM OF EXPENSES. THEREFORE ASSESSING OFFICER IS DIRECTED TO SUSTAIN ADDITION O F 25% OUT OF THE EXPENSES OF RS.1 63 522/-FOR WHICH BILLS/VOUCHERS COULD NOT BE PRODUCED AND BALANCE OF THE ADDITION NEEDS TO BE DELETED. WE HOLD AND DIRECT ACCORDINGL Y. 11. IN THE RESULT THE APPEAL GETS PARTLY ACCEPTED TO THE EXTENT INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 29/03/2012. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : MARCH 29 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ROHTAK. 5. CIT(ITAT) DEPUTY REGISTRAR ITAT