ACIT, Alwar v. HI-TECH COMPETENT BUILDERS P LTD., BHIWADI

ITA 286/JPR/2011 | 2006-2007
Pronouncement Date: 23-09-2011 | Result: Dismissed

Appeal Details

RSA Number 28623114 RSA 2011
Bench Jaipur
Appeal Number ITA 286/JPR/2011
Duration Of Justice 5 month(s) 23 day(s)
Appellant ACIT, Alwar
Respondent HI-TECH COMPETENT BUILDERS P LTD., BHIWADI
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 23-09-2011
Assessment Year 2006-2007
Appeal Filed On 31-03-2011
Judgment Text
1 ITA 286-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 286/JP/2011 ASSTT. YEAR : 2006-07. THE ACIT CIRCLE-2 VS. M/S. HI-TECH COMPETENT B UILDERS ALWAR. (P) LTD 6/24 U.I.T. COLONY BHIWADI DISTT. ALWAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. MEENA RESPONDENT BY : SHRI KRANTI MEHTA DATE OF HEARING : 15.9.2011. DATE OF PRONOUNCEMENT : 23.9.2011 ORDER DATE OF ORDER : 23/09/2011. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2006-07. 2. THE DEPARTMENT IS OBJECTING IN RESTRICTING THE T RADING ADDITION FROM RS. 37 56 382/- TO RS. 25 24 214/- MADE BY THE AO. 3. DURING THE ASSESSMENT PROCEEDINGS THE AO NOTICE D THAT ASSESSEE HAS SHOWN TOTAL CONTRACT RECEIPT OF RS. 11.76 CRORES OR ODD AND N.P . RATE @ 1.79%. THE AO NOTICED VARIOUS DEFECTS IN THE BOOKS OF ACCOUNT AS NO STOCK REGISTER WAS MAINTAINED NO OPENING STOCK AND CLOSING STOCK OR WORK IN PROGRESS HAS BEE N SHOWN IN THE BOOKS OF ACCOUNT THE ASSESSEE DID NOT RAISE ANY BILL TO ITS CLIENTS. TH E ASSESSEE HAD SHOWN CONTRACTUAL RECEIPTS 2 ON THE BASIS OF TDS CERTIFICATE WHICH WAS ISSUED AT THE END OF THE YEAR. THE AO ALSO NOTICED THAT ASSESSEE HAS SHOWN METHOD OF ACCOUNTIN G AS MERCANTILE SYSTEM BUT DID NOT DISCLOSE INTEREST ON F.DS ON THE BASIS OF ACCRUAL. THEREFORE THE AO WAS OF THE VIEW THAT PROVISIONS OF SECTION 145(3) ARE APPLICABLE ON THE FACTS OF THE PRESENT CASE. THE AO FURTHER COMPARING THE CASE OF M/S. MANOHAR LAL THEK EDAR WHERE NP RATE OF 4.9% HAS BEEN SHOWN APPLIED 5% N.P RATE WHICH RESULTED IN A TRADING ADDITION OF RS. 37 36 382/-. IT WAS SUBMITTED BEFORE LD. CIT (A) THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE SUBJECT TO AUDIT UNDER SECTION 44AB. THE ASSESSEE HAS BILL /VOUCHERS OF MATERIAL PURCHASED. LOOKING TO THE NATURE OF BUSINESS THE ASSESSEE OBT AINED KACHHA BILL FOR BAZRI RODI SAND WATER ETC. AND HAS DEBITED THE MATERIAL PURCH ASED DIRECTLY IN THE CONTRACT ACCOUNT AS ASSESSEE IS NOT A TRADER. IT WAS ALSO SUBMITTED THAT GRIT AND RODI BAZRI STONE AND SAND WERE PURCHASED FROM THE GRAY MARKET WHERE THEY DO NOT PROVIDE ANY PAKKA BILL. IT WAS ALSO SUBMITTED THAT AO APPLIED N.P. RATE ON THE BASIS OF RATE DECLARED IN CASE OF MANOHAR LAL THEKEDAR WHO WAS DOING BUSINESS FROM AL WAR WHEREAS ASSESSEES BUSINESS WAS IN BHIWADI WHICH CANNOT BE COMPARED. IT WAS A LSO EXPLAINED THAT M/S. MANOHAR LAL THEKEDAR WAS MAINLY IN THE GOVERNMENT CONTRACT AND CONSTRUCTING ROAD BUILDING CULVERTS PULIYAS ETC. WHERE MARGIN OF PROFIT IS MU CH MORE. THE ASSESSEE WAS CONTRACTOR IN INDUSTRIAL BUILDING OWNED BY PRIVATE ENTREPRENEU RS WHERE MARGIN OF PROFIT IS VERY LESS. NATURE OF BUSINESS IS DIFFERENT THEREFORE BOTH TH E CASES CANNOT BE COMPARED. RELIANCE WAS PLACED ON VARIOUS CASES MENTIONED IN THE ORDER OF LD. CIT (A) AT PAGE 2. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD THE LD. CIT (A) FOUND THAT AO HAS APPLIED NP RATE ON VERY HIGHER SIDE KEE PING IN MIND THE NP RATE DECLARED BY ASSESSEE AT 1.79% AND NP RATE DECLARED IN CASE OF M ANOHAR LAL THEKEDAR AT 4.9%. THE LD. 3 CIT (A) WAS OF THE VIEW THAT IF A 4% NP RATE IS APP LIED THEN IT WILL MEET ENDS OF JUSTICE. IN THIS WAY THE RELIEF OF RS. 12 32 168/- WAS ALLOW ED TO THE ASSESSEE. 4. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5. THE LD. D/R PLACED RELIANCE ON THE ORDER OF AO. 6. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSESS EE PLACED RELIANCE ON THE ORDER OF LD. CIT (A). 7. ON A QUERY FROM THE BENCH IT WAS SUBMITTED THAT WHILE COMPARING THE CASE WITH THE CASE OF MANOHAR LAL THEKEDAR NO OPPORTUNITY WA S ALLOWED TO THE ASSESSEE TO FILE EXPLANATION. 8. AFTER CONSIDERING THE ORDERS OF AO AND LD. CIT ( A) WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). THE LD. CIT (A) HAS TAKEN INTO CONSIDERATION THE PAST HISTORY OF THE CASE AS WELL AS THE NP RATE SHOWN BY ASSESSEE A T 1.79% AND ALSO KEEPING IN MIND THE VARIOUS DEFECTS IN THE BOOKS OF ACCOUNT HELD THAT N P WAS APPLIED BY AO @ 5% WAS ON HIGHER SIDE. THEREFORE THE NP RATE OF 4% WAS DIREC TED TO BE APPLIED. THE CASE ON WHICH RELIANCE HAS BEEN PLACED BY LD. D/R CANNOT BE SAID TO BE COMPARABLE WITH THE FACTS OF THE CASE AS M/S. MANOHAR LAL THEKEDAR WAS DOING THE WOR K OF GOVERNMENT CONTRACT WHEREAS THE ASSESSEE WAS DEALING WITH THE PRIVATE PARTIES. BY PLACING RELIANCE ON THE FACTS OF THE CASE IN CASE OF MANOHAR LAL THEKEDAR THE AO HAS NO T ALLOWED ANY OPPORTUNITY TO THE ASSESSEE THAT WHY RATE SHOWN IN CASE OF MANOHAR LAL THEKEDAR SHOULD NOT BE APPLIED IN ITS CASE WITHOUT AFFORDING ANY OPPORTUNITY AND APPL YING NP RATE SHOWN BY ANOTHER ENTREPRENEUR IN OUR CONSIDERED VIEW WAS NOT JUSTIF IED AT ALL. KEEPING IN MIND ALL THESE FACTS AND CIRCUMSTANCES AND THE REASONING GIVEN BY LD. CIT (A) WE CONFIRM THE FINDING OF LD. CIT (A) WHICH REMAINED UNCONTROVERTED. 4 9. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMI SSED. 10. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23 .9.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR D/- COPY FORWARDED TO :- THE ACIT CIRCLE-2 ALWAR. M/S. HI-TECH COMPETENT BUILDERS P. LTD. BHIWADI. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 286/JP/2011) BY ORDER AR ITAT JAIPUR.