ITO, SRIGANGANAGAR v. M/s. G.R. Contractor, SRIGANGANAGAR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR B EFORE SHRI S.V. MEHROTRA ACCOUNTANT MEMBER AND SHRI V. D. RAO JUDICIAL MEMBER ITA NO:275 / JU / 2009 ASSTT. YEAR:2006 -2007 THE INCOME-TAX OFFICER VS M/S G.R. CONTRACTORS WARD 1 53-E BLOCK SRIGANGANAGAR. SRIGANGANAGAR. C.O. NO.43 / JU / 2009 (A/O ITA NO.275 / JU / 2009) ASSTT. YEAR: 2006 2007 M/S G.R. CONTRACTORS VS THE INCOME-TAX OFFICER 53-E BLOCK WARD 1 SRIGANGANAGAR. SRIGANGANAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AVADESH KUMAR D. R. RESPONDENT BY: SHRI SURESH OJHA A.R. ORDER PER V. D. RAO: JM 1. THIS APPEAL AND CROSS OBJECTIONS HAVE BEEN FILED BY THE REVENUE AND ASSESSEE AGAINST THE ORDER OF THE LD. CIT (APPEALS ) BIKANER ORDER DATED 27-02-2009 ASSESSMENT YEAR 2006-07. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS A PARTNE RSHIP FIRM AND ENGAGED IN THE BUSINESS OF PLYING OF TANKERS FOR THE CARRIAGE OF BITUMEN FROM PLACE TO PLACE. THE ASSESSEE FIRM HAD ITS OWN TRUCKS AND HA D ALSO SHOWN 2 TRANSPORTATION RECEIPTS FROM OTHER THAN OWN TRUCKS. THE ASSESSEE HAS DECLARED 18% NP AND ALSO SHOWN COMMISSION INCOME OF RS.1 99 561/-. AS AGAINST THE INCOME SHOWN BY THE ASSESSEE THE ASSES SING OFFICER HAS ESTIMATED NP AT 21% AND WITH REGARD TO COMMISSION I NCOME ESTIMATED AT RS.6 17 472/- ACCORDINGLY THE ADDITION WAS MADE. A S AGAINST THE ORDER OF THE ASSESSING OFFICER ASSESSEE CARRIED THE MATTER AND APPEAL BEFORE THE LD. CIT (A). 3. THE LD. CIT (A) BY FOLLOWING THE ORDER OF THE TR IBUNAL FOR THE ASSESSMENT YEAR 2003-04 AND DIRECTED THE ASSESSING OFFICER TO FOLLOW THE DIRECTIONS GIVEN BY THE HONBLE ITAT JODHPUR BENCH . AS AGAINST THE ORDER OF THE LD. CIT (A) REVENUE CARRIED THE MATTER AND APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL COVERED BY T HE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-2004 IN ITA NO. 9 / JU / 0 7 DATED 24 TH AUGUST 2007 WHEREIN THE HONBLE TRIBUNAL HAS OBSERVED AS U NDER. AFTER CONSIDERATION THE RIVAL SUBMISSIONS AND PERUS ING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE ASSES SEE HAD NOT IN FACT MAINTAINED BOOKS OF ACCOUNT IN SUCH A FASHION AS TO ENABLE THE ASSESSING OFFICER TO COMPUTE CORRECT INCOME. WE THEREFORE APPROVE THE ACTION OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SEC.145. HOWEVER 3 THE FACT REMAINS THAT AFTER REJECTION OF BOOKS OF A CCOUNT THE ASSESSING OFFICER CANNOT MAKE ASSESSMENT DEVOID OF THE RELEVA NT MATERIAL ON RECORD. THE JODHPUR BENCH OF THE TRIBUNAL HAS HELD IN SEVERAL CASES THAT IF THE BOOKS OF ACCOUNT ARE RIGHTLY REJECTED THEN GUIDANCE SHOULD BE TAKEN FROM THE PROFIT RATE OF THE IMMEDIATELY PR ECEDING YEAR FOR COMPUTING TOTAL INCOME. ADVERTING TO THE FACTS OF THE CASE WE FIND THAT AS PER THE ASSESSEES CALCULATION WHICH HAS NOT BE EN REFUTED BY THE LD. D.R. N.P. RATE IN THE IMMEDIATELY PRECEDING YEAR I S 17.46% AS AGAINST 14.85% DECLARED IN THIS YEAR. WE THEREFORE HOLD THAT THE N.P. RATE OF 17.46% BE APPLIED ON THE TOTAL RECEIPTS OF RS.2 44 71 277/-. AFTER APPLICATION OF SUCH PROFIT RATE REMUNERATION SHOUL D BE ALLOWED TO THE PARTNERS AS PER LAW HAS BEEN HOLD IN THE AFORE-NOTE D ORDER OF THE TRIBUNAL IN HAZI MOHD HANIF & SONS ITA NO. 633 / J U / 2005 DATED 25.1.2006. 5. SUBSEQUENTLY THE ASSESSEE HAS MOVED A MISCELLAN EOUS APPLICATION NO.107 / JU /2007 BY ORDER DATED 19-12-2007. THE H ONBLE TRIBUNAL FURTHER OBSERVED THAT WE MAKE IT CLEAR THAT THE RATE OF 17 .46% IS BEFORE DEPRECIATION INTEREST SALARY AND INTEREST TO THIRD PARTIES AS WAS IN THE PRECEDING YEAR ALSO. THE LD. D.R. SUPPORTED THE ORDER PASSED BY THE ASSESSI NG OFFICER. 4 6. WE HAVE HEARD BOTH THE SIDES PERUSE THE RECORDS AND GONE TO THE ORDERS OF THE AUTHORITIES BELOW. 7. THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY CO VERED BY THE ASSESSEES OWN CASE NOTHING WAS BROUGHT ON RECORD BY THE LD. D.R. TO SHOW THAT WHETHER THE ORDER PASSED BY THE TRIBUNAL SUBSEQUENT LY REVERSED BY THE HIGHER COURT AND NO CONTRARY DECISION WAS BROUGHT T O OUR NOTICE. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF T HE TRIBUNAL IN THE ASSESSEES OWN CASE THIS APPEAL FILED BY THE REVENU E IS DISMISSED. 8. IN SO FAR AS CROSS OBJECTION FILED BY THE ASSESS EE IS CONCERNED IN VIEW OF THE DISMISSAL OF THE APPEAL FILED BY THE REVENUE NO ADJUDICATION IS REQUIRED. 9. IN THE RESULT THE REVENUE APPEAL IS DISMISSED. 10. THE CROSS OBJECTION FILED BY THE ASSESSEE IS DI SMISSED. 11. THE ORDER WAS PRONOUNCED IN THE OPEN COURT DATE D ON 9 TH FEBRUARY 2011. SD/- SD/- (S.V. MEHROTRA) (V. D. RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09-02-2011 KAMAL KUMAR COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE CIT (A)/TH E D.R.