ITO, Ward-1(2), Bhubaneswar, Bhubaneswar v. M/s. A.V.K.Engineering & Construction, Bhubaneswar

ITA 259/CTK/2013 | 2008-2009
Pronouncement Date: 22-04-2014 | Result: Dismissed

Appeal Details

RSA Number 25922114 RSA 2013
Assessee PAN AAOFA0122H
Bench Cuttack
Appeal Number ITA 259/CTK/2013
Duration Of Justice 11 month(s) 29 day(s)
Appellant ITO, Ward-1(2), Bhubaneswar, Bhubaneswar
Respondent M/s. A.V.K.Engineering & Construction, Bhubaneswar
Appeal Type Income Tax Appeal
Pronouncement Date 22-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 22-04-2014
Assessment Year 2008-2009
Appeal Filed On 23-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK . . . . BEFORE SHRI P.K.BANSAL AM & SHRI D.T.GARASIA JM ./ ITA NO. 259 /C TK/201 3 ( / ASSESSMENT YEAR :20 08 - 09 ) ITO WARD - 1(2) BHUBANESWAR VS. M/S A.V.K.ENGINEERING & CONSTRUCTION PLOT NO. 229 - B H NO.465 KAPILPRASAD SUNDARPADA BHUBANESWAR - 751 002 DISTT. KHURDA ./ ./ PAN/GIR NO. : A A OFA 012 2 H ( / APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO. 70 /CTK/201 3 (ARISING OUT OF ITA NO. 259/CTK/2013) ( / ASSESSMENT YEAR :20 08 - 09 ) M/S A.V.K.ENGINEERING & CONSTRUCTION PLOT NO.229 - B H NO.465 KAPILPRASAD SUNDARPADA BHUBANESWAR - 751 002 DISTT. KHURDA VS. ITO WARD - 1(2) BHUBANESWAR ./ ./ PAN/GIR NO. : A AOFA 0122 H ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI N.K.NEB /AS SESSEE BY : SHRI P.K.MISHRA / DATE OF HEARING : 22 N D APRIL 2014 / DATE OF PRONOUNCEMENT : 22 N D APRIL 2014 / O R D E R PER BENCH : THIS APPEAL AS WELL AS THE CROSS OBJECTION HAS BEEN FILED AGAI NST THE ORDER OF THE CIT(A) DATED 21 - 1 - 2013. 2 ITA NO. 259 /201 3 & CO NO. 70/2013 2 . THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED RESTRICTING THE ADDITION OF RS.30 84 010/ - TO RS.94 795/ - BY DIRECTING TO CONSIDER ONLY 8% OF THE UNDISCLOSED RECEIPTS AS INCOME IN PLACE OF ENTIRE UNDISCLOSED AMOUNT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED DELETING RS.60 256/ - OUT OF RS.1 62 465/ - ADDED BY T HE AO ON ACCOUNT OF EXPENDITURE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED DELETING RS.1 99 048/ - OUT OF THE ADDITION MADE BY THE AO ON ACCOUNT OF CASUAL LABOUR MATERIALS PURCHASES LOADINGS MEDICAL EXPENSES VEHICLE HIRE AND STAFF WELFARE IN ABSENCE OF DETAILS FURNISHED BY THE ASSESSEE. 3 . THE CROSS OBJECTION FILED BY THE ASSESSEE IS SUPPORTIVE TO THE ORDER OF THE CIT(A). 4 . GROUND NO.1 IN REVENUES APPEAL RELATES TO RESTRICTING THE ADDITION OF RS.30 84 0 10/ - TO 8% OF THE UNDISCLOSED RECEIPT. 4.1 BRIEF FACTS RELATING TO THIS GROUND ARE THAT ON SCRUTINY OF THE ASSESSMENT THE AO NOTED THAT THE ASSESSEE HAS SHOWN CONTRACT RECEIPTS FROM M/S TRIVENI EARTH MOVERS PVT. LTD. TAMILNADU FOR 2 ND 3 RD AND 4 TH QUARTER S BUT HAS NOT SHOWN THE RECEIPT FOR THE 1 ST QUARTER. IN RESPONSE THE ASSESSEE SUBMITTED THAT THE RECEIPT FOR THE 1 ST QUARTER HAS BEEN TAKEN IN THE HANDS OF THE PROPRIETORSHIP OF SHRI V.K.MURUGESAN AND THE FIRM CAME INTO EXISTENCE BY CONVERTING OF THE SA ID PROPRIETOR SHIP CONCERN INTO PARTNERSHIP ON 26 - 7 - 2007 . THE AO WAS NOT SATISFIED AS HE COULD NOT FILE ANY RETURN OF SHRI V.K.MURUGESAN. 3 ITA NO. 259 /201 3 & CO NO. 70/2013 ACCORDINGLY THE TURN OVER FOR THE 1 ST QUARTER AMOUNTING TO RS. 30 84 010/ - WAS ADDED IN THE INCOME OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND THE CIT(A) CALLED FOR THE REMAND REPORT OF THE AO. IN THE REMAND REPORT THE AO STATED THAT THE ITO WARD - 1 (2) BHUBANESWAR INFORMED HIM THAT THE RETURN OF SHRI M.K.MURUGESAN WAS PROCESSED U/S.143(1) ON A TOTAL INCOME OF RS. 2 17 350/ - AND THE ABOVE CONTRACT RECEIPT HAS BEEN ASSESSED IN THE HANDS OF SHRI M.K.MURUGESAN AND IS RELATED PRIOR TO THE EXISTENCE OF THE FIRM. THEREFORE HE STATED THAT THE ADDITION OF RS. 30 84 010/ - MAY BE EXCLUDED FROM THE INCOME OF THE F IRM. THE CIT(A) NOTED THAT A SUM OF RS. 11 84 932 / - RELATING TO THE FIRM AND THEREFORE COULD HAVE BEEN TAKEN IN THE HANDS OF THE FIRM AND ACCORDINGLY HE COMPUTED THE INCOME THEREON AT THE RATE OF 8% AND REDUCED THE ADDITION OF RS. 94 795/ - . 4.2 LEARNED D R BEFORE US EVEN THOUGH VEHEMENTLY RELIED ON THE ORDER OF THE AO BUT WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF THE CIT(A) AFTER PERUSING THE REMAND REPORT OF THE AO. WE THEREFORE CONFIRM THE ORDER OF THE CIT(A) AS IT IS NOT A CASE WHIC H WARRANTS OUR INTERFERENCE. THUS GROUND NO. 1 STANDS DISMISSED. 5 . GROUND NO.2 RELATES TO DELETION OF RS. 60 256/ - OUT OF RS. 1 62 465/ - . 5.1 THE FACTS RELATING TO THIS GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS. 4 15 530/ - UNDER THE HEAD EXPENSES OUT OF AN AMOUNT OF RS. 1 62 465/ - IN HIS OPINION WAS OF 4 ITA NO. 259 /201 3 & CO NO. 70/2013 CAPITAL IN NATURE. THE AO THEREFORE DISALLOWED THE SAME. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND STATED THAT THESE AMOUNTS ARE FOR DAY - TO - DAY ITEMS AND THEREFORE NO DISALLOWANCE NEEDS TO BE DONE. THE CIT(A) CALLED FOR THE REMAND REPORT. THE AO IN THE REMAND REPORT CONFIRMED THE DISALLOWANCE OF RS. 1 62 465/ - AND SUBMITTED THAT OUT OF TOTAL AMOUNT OF RS. 1 52 303/ - UNDER THE HEAD O FFICE EXPENSES AN AMOUNT OF RS. 66 694/ - ONLY IS REVENUE EXPENSES AND BALANCE IS CAPITAL EXPENDITURE. THE CIT(A) NOTED THAT FOR THE SUM OF RS. 66 694/ - THE AO TREATED EMERGENCY LIGHT OF RS. 1415/ - AND UTENSIL PURCHASE OF RS. 5023/ - ALSO TO BE REVENUE BUT THEY ARE O F CAPITAL IN NATURE THEREFORE HE EXCLUDED THE SAME AND TOOK A VIEW THAT ONLY BALANCE OF RS. 60 256/ - ARE OF REVENUE NATURE. THE BALANCE SUM OF RS. 1 02 209/ - WAS CONFIRMED AS CAPITAL EXPENDITURE AND DIRECTED THE AO TO ALLOW DEPRECIATION ON THE SAME TO THE ASSESSEE. 5.2 WE HEARD RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. LEARNED DR EVEN THOUGH RELIED ON THE ORDER OF AO BUT COULD NOT BROUGHT TO OUR KNOWLEDGE ANY COGENT MATERIAL OR EVIDENCE WHICH MAY COMPEL US TO INTERFERE IN THE ORDER OF THE CIT(A) . WE THEREFORE DISMISS THIS GROUND. 6 . GROUND NO. 3 RELATES TO DELETION OF RS. 1 99 048/ - OUT OF ADDITION MADE BY THE AO ON ACCOUNT WAGES CASUAL LABOUR MATERIALS PURCHASES LOADINGS MEDICAL EXPENSES VEHICLE HIRE CHARGES AND STAFF WELFARE. 5 ITA NO. 259 /201 3 & CO NO. 70/2013 6.1 BRIEF FAC TS RELATING TO THIS GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS. 11 55 048/ - TOWARDS WAGES CASUAL LABOUR MATERIALS PURCHASES LOADINGS MEDICAL EXPENSES VEHICLE HIRE CHARGES AND STAFF WELFARE. HE WAS NOT SATISFIED WITH THE GENU INENESS OF THE ENTIRE CLAIM THEREFORE HE DISALLOWED 10% OF THE EXPENDITURE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE PRO DUCED BOOKS OF ACCOUNTS ALONG WITH V OUCHERS AS DESIRED BY THE CIT(A) FOR THE MONTH OF MARCH FOR A TEST CHECK BASIS. THE CIT(A) NOTED THAT VOUCHERS IN RESPECT TO THE EXPENSES LIKE MEDICAL EXPENSES ARE NOT AVAILABLE AND THE EXPENSES INCURRED ON THE LABOUR CHARGES ARE EVIDENT BY ONLY THUMB IMPRESSION THEREFORE HE INCLINED TO HOLD THE DISALLOWANCE OF RS . 9 56 000/ - SO THAT THE RATE OF PROFIT ON THE TURN OVER ON RS. 1 40 67 491/ - SHALL BE AROUND 80% . THUS THE ASSESSEE WAS ALLOWED A RELIEF OF RS. 1 99 048/ - . 6.2 WE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THE SAME CAREFULLY. IT IS NOT A CASE WHERE THE ASS ESSEE HAS NOT MAINTAINED HIS BOOKS OF ACCOUNTS OR PRODUCED THE BOOKS OF ACCOUNT. THE ASSESSEE HAS MAINTAINED THE DAY - TODAY BILLS AND VOUCHERS. THE AO HAS NOT BROUGHT ON RECORD ANY SPECIFIC VOUCHER WHICH IS INGENUINE. LABOURS MAY NOT BE EDUCATED BUT THEY MA Y HAVE PUT THEIR THUMB IMPRESSION AND ON THE BASIS OF THE SAME IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT INCURRED THE EXPENSES. SINCE THE ASSESSEE IS NOT IN APPEAL IN OUR OPINION THE DISALLOWANCE SUSTAINED BY THE CIT(A) IS FAIR AND 6 ITA NO. 259 /201 3 & CO NO. 70/2013 REASONABLE. WE THER EFORE CONFIRM THE ORDER OF THE CIT(A) . THIS GROUND OF THE REVENUE STANDS DISMISSED. 7. SO FAR AS THE CROSS OBJECTION OF THE ASSESSEE IS CONCERNED WE NOTED THAT THE CROSS OBJECTION IS SUPPORTIVE TO THE ORDER OF THE CIT(A) . WE HAVE ALREADY CONFIRMED THE OR DER OF THE CIT(A) THEREFORE THE CROSS OBJECTION OF THE ASSESSEE IN OUR OPINION HAS BECOME INFRUCTUOUS AND IS HEREBY DISMISSED. 8. IN THE RESULT APPEAL FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 RD APRIL 201 4 . 22 RD APRIL 2014 SD/ - SD / - ( . . ) ( D.T.GARASI A ) ( . . ) ( P.K.BANSAL ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 22 /04/2014 . . /PKM . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER / ( ASSTT. REGISTRAR) / ITAT CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) BERHAMPUR 4. / CIT BHUBANESWAR 5. / DR ITAT CUTTACK 6. / GUARD FI LE. //TRUE COPY//