J M Mhatre Panvel v. Jt Cit Panvel Rg Panvel Panvel

In The Income Tax Appellate Tribunal Mumbai Bench I Mumbai Before Shri C N Prasad Judicial Member And Shri N K Pradhan Accountant Member Ita No 3655 Mum 2015 Assessment Year 2010 11 M S J M Mhatre Plot No 57 58 Market Yard Sahakar Nagar Panvel 410206 Vs Joint Commissioner Of Income Tax Range Panvel Trifed Tower 3 Rd Floor Opp Khanda Colony New Panvel 410206 Pan No Aa Bfj 9979 N Appellant Respondent Assessee By Mr Prayag Jha Ar Revenue By Mr Saurabh Kumar Rai Dr Date Of Hearing 31 10 2017 Date Of Pronouncement 21 12 2017 Order Per N K Pradhan A M This Is An Appeal Filed By The Assessee The Relevant Assessment Year Is 2010 11 The Appeal Is Directed Against The Order Of The Commis Sioner Of Income Tax Appeals 2 Thane And Arises Out Of The Assessment Order U S 143 3 R W S 144 Of The Income Tax Act 1961 The Act 2 The Ground Raised By The Assessee In This Appeal Is Against T He Order Of The Ld Cit A Confirming The Estimation Of Net Profit 10 On Direct Contract Receipts And 5 On Sub Contract Receipts Also It Is Raised That The Ld Cit A Erred In Not Allowing Remuneration Paid To Partners Of Rs 21 00 000 From The Inc Ome Estimated During The Year M S J M Matre Ita No 3655 Mum 2015 2 Which Was Specifically Allowed By The Earlier Cit A As Well As Itat While Adjudicating The Appeal Of The Assessee For The Ay 2005 06 The Ay 2007 08 The Assessee Has Also Filed An Additional Ground Against The Rejection Of Books Of Account By The Ao As It Is Linked With The Original Ground Of Appeal We Admit The Same For Adjudication 3 Briefly Stated The Facts Of The Case Are That The Assessee Is A Government Registered Contractor It Filed Its Return Of Income For The Ay 2010 11 On 15 10 2010 Declaring Total Income Of Rs 11 20 92 460 The Assessing Officer Ao Verified During The Course Of Assessment Proceedings The Expenses Under The Head Labour Charges And Expenses Of Fuel And Lubricant In The Case Of Labour Charges The Ao Noticed That In Many Cases Even The Basic Details Like Name And Address Of The Labourer Was Not Mentioned In The Case Of Expenses Of Fuel And Lubricant Though Purchase Has Been Made Through Cheque No Disbursement Register Or Stock Regi Ster Was Maintained By The Assessee In View Of The Above The Ao Rejected The Books Of Accounts U S 145 3 And Estimated The Gross Profit 10 On The Gross Contract Receipt Of Rs 1 67 70 23 091 Thus He Arrived At Rs 16 77 02 309 As The Income Of Th E Assessee 4 Aggrieved By The Order Of The Ao The Assesse Filed An Appeal Before The Ld Cit A We Find That The Ld Cit A Considering The Comparable Cases Estimated The Net Profit 10 On Direct Contract Receipts And 5 On Indirect Contract Recei Pts M S J M Matre Ita No 3655 Mum 2015 3 5 Before Us The Ld Counsel Of The Assessee Submits That The Ld Cit A Should Not Have Applied Net Profit 10 On Direct Contract Receipts And 5 On Sub Contract Receipts By Relying Upon The Order Of The Cit A For The Ay 2008 09 Which Was Ren Dered In The Context Of Peculiar Circumstances Prevalent In That Assessment Year 6 On The Other Hand The Ld Dr Relies On The Order Of The Ld Cit A 7 We Have Heard The Rival Submissions And Perused The Relevant Materials On Record The Reasons For Our Decisions Are Given Below We Find That The Ao Has Found That The Details In Respect Of Labour Charges And Expenses Of Fuel And Lubricant Were Incomplete He Was Not In A Position To Verify The Said Expenses We Thus Find That The Ao Has Rightly R Ejected The Books Of Accounts And Estimated The Profit But What Should Be The Profit Percentage In The Assessment Year 2008 09 The Itat I Bench In Assessees Own Case Ita No 1846 Mum 2011 Vide Order Dated 30 07 2014 Has Confirmed The Order Of The Ld Cit A Estimating 10 The Contract Receipts And 5 The Sub Contract Receipts It Also Held That Salary And Interest Paid To The Partners Is An Allowable Deduction From The Net Income Estimated U S 144 In View Of The Similar Facts We Uphold The Order Of The Ld Cit A Estimating 10 The Contract Receipts And 5 The Sub Contract Receipts For The Impugned Assessment Year However We Direct The Ao To Allow The Deduction Of Salary And Interest Paid To The Partners After Due Verification M S J M Matre Ita No 3655 Mum 2015 4 8 In The Result The Appeal Is Partly Allowed Order Pronounced In The Open Court On 21 12 2017 Sd Sd C N Prasad N K Pradhan Judicial Member Accountant Member Mumbai Dated 21 12 2017 Rahul Sharma Sr P S Copy Of The Order Forwarded To 1 The Appellant 2 The Respondent 3 The Cit A 4 Cit 5 Dr Itat Mumbai 6 Guard File By Order True Copy Dy Asstt Registrar Itat Mumbai