M/s Swastik Construction Co, JAMNAGAR v. The Commissioner Of Income Tax, JAMNAGAR

ITA 52/RJT/2011 | 2006-2007
Pronouncement Date: 09-09-2011 | Result: Allowed

Appeal Details

RSA Number 5224914 RSA 2011
Assessee PAN AAOFS0370H
Bench Rajkot
Appeal Number ITA 52/RJT/2011
Duration Of Justice 6 month(s) 16 day(s)
Appellant M/s Swastik Construction Co, JAMNAGAR
Respondent The Commissioner Of Income Tax, JAMNAGAR
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 09-09-2011
Date Of Final Hearing 30-08-2011
Next Hearing Date 30-08-2011
Assessment Year 2006-2007
Appeal Filed On 22-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.52/RJT/2011 (ASSESSMENT YEAR 2006-07) M/S SWASTIK CONSTRUCTION CO VS DY.CIT CIR.2 PANCHAMUKHI HANUMAN SHOPPING CENTRE JAMNAGAR NEAR AMBER CINEMA JAMNAGAR PAN : AAOFS0370H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PM MAHARISHI RESPONDENT BY: SHRI JM SAHAY DATE OF HEARING : 30-08-2011 DATE OF PRONOUNCEMENT : 09-09-2011 O R D E R PER N.R.S. GANESAN JM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT JAMNAGAR DATED 10-01-2011 AND PERTAINS TO ASSESSMEN T YEAR 2006-07. 2. SHRI PM MAHARISHI THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ADMINISTRATIVE COMMISSIONER FOUND THAT THE RE WAS A STEEP FALL IN THE GROSS PROFIT IN RESPECT OF SALE OF BSNL PRODUCT S FROM 11.65% TO 6.50% AND THE ASSESSING OFFICER ACCEPTED THE REASONS ADVA NCED BY THE ASSESSEE WITHOUT PROPER VERIFICATION. THE COMMISSIONER HAS ALSO FOUND THAT THE DIFFERENCE BETWEEN THE INCOME SHOWN IN THE TDS CERT IFICATE AND THE INCOME DISCLOSED BY THE ASSESSEE WAS NOT VERIFIED B Y THE ASSESSING ITA NO.52/RJT/2011 2 OFFICER. WITH REGARD TO THE CIVIL WORK UNDERTAKEN BY THE ASSESSEE THE ASSESSEE HAS SHOWN THE INCOME ON RECEIPT BASIS EVEN THOUGH THE ASSESSEE IS FOLLOWING MERCANTILE METHOD OF ACCOUNTI NG. THE COMMISSIONER FURTHER FOUND THAT THE ASSESSING OFFIC ER HAS NOT EXAMINED THE EXPENSES CLAIMED BY THE ASSESSEE. THEREFORE T HE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. REFERRING TO THE ORDER OF THE ASSESSING O FFICER THE LD.REPRESENTATIVE SUBMITTED THAT IT IS NOT CORRECT TO SAY THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE CLAIM OF THE ASSESSEE. REFERRING TO FALL IN GROSS PROFIT IN RESPECT OF SALE OF BSNL PRODUCTS T HE LD.REPERESENTATIVE SUBMITTED THAT THE ASSESSEE BY LETTER DATED 10-09-2 008 EXPLAINED THE REASONS FOR FALL IN GROSS PROFIT. THE COPY OF THE LETTER DATED 10-09-2008 IS AVAILABLE AT PAGE 2 OF THE PAPER BOOK. THE LD.REPR ESENTATIVE SUBMITTED THAT THE STOCK OF THE BSNL PRODUCTS WAS VALUED AT C OST AND THE ASSESSEE HAS FILED THE DETAILED WORKING BEFORE THE ASSESSING OFFICER. THE ASSESSEE HAS ALSO EXPLAINED THAT DUE TO STIFF COMPETITION IN BUSINESS THE PROFIT RATIO WAS REDUCED DURING THE YEAR UNDER CONSIDERATION. I N ORDER TO MITIGATE THE COMPETITION WHICH PREVAILED IN THE SALE OF BSNL PRO DUCTS THE ASSESSEE WAS REQUIRED TO CUT THEIR MARGIN. THIS EXPLANATION OF THE ASSESSEE WAS ACCEPTED AFTER EXAMINATION IN THE ASSESSMENT ORDER . THEREFORE IT IS NOT CORRECT TO SAY THAT THE ASSESSING OFFICER ACCEPTED THE CASE OF THE ASSESSEE WITHOUT ANY EXAMINATION. SIMILARLY WITH REGARD TO DIFFERENCE IN THE TDS ITA NO.52/RJT/2011 3 CERTIFICATE OF THE INCOME DISCLOSED BY THE ASSESSEE THE ASSESSEE HAD EXPLAINED BY A LETTER DATED 10-09-2008. THE ASSESS ING OFFICER AFTER EXAMINING THE EXPLANATION AND THE RECONCILIATION FI LED BEFORE HIM ACCEPTED THE CASE OF THE ASSESSEE. SIMILARLY THE EXPENSES CLAIMED BY THE ASSESSEE MORE PARTICULARLY IN BIKANER JOB WAS ALS O EXAMINED BY THE ASSESSING OFFICER. THESE ARE BORNE OUT OF THE ASSE SSMENT ORDER MORE PARTICULARLY AT PARAS 3 4 & 5. THEREFORE IT IS NOT CORRECT TO SAY THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE CLAIM OF THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. THEREFORE THE ORDER OF TH E ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F THE REVENUE. HENCE THE ADMINISTRATIVE COMMISSIONER HAS NO JURISDICTION TO REVISE THE ORDER. 3. ON THE CONTRARY SHRI JM SAHAY THE LD.DR SUBMIT TED THAT THE STEEP FALL IN PROFIT WAS NOT PROPERLY EXAMINED BY THE ASS ESSING OFFICER. REFERRING TO THE ORDER OF THE ADMINISTRATIVE COMMISSIONER TH E LD.REPRESENTATIVE SUBMITTED THAT THE NON EXAMINATION OF THE EXPENSES CLAIMED BY THE ASSESSEE IN THE CONSTRUCTION WORK AND THE SALE OF B SNL PRODUCTS IN THE PROPER PERSPECTIVE AMOUNTS TO ERROR IN THE ORDER OF THE ASSESSING OFFICER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE . 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ADMINISTRATIVE ITA NO.52/RJT/2011 4 COMMISSIONER REVISED THE ORDER OF THE ASSESSING OFF ICER ON THE GROUND THAT NO PROPER ENQUIRY WAS CONDUCTED WHILE ACCEPTING THE CLAIM OF THE ASSESSEE WITH REGARD TO SALE OF BSNL PRODUCTS DIFF ERENCE IN THE INCOME DISCLOSED BY THE ASSESSEE AND THE TDS CERTIFICATE A ND THE EXPENSES CLAIMED IN THE CIVIL CONSTRUCTION AT BIKANER SITE. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE ASSESSING OFFICER AND THE MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER IN FACT CALLED FOR ALL THE DETAILS AND THE ASSESSEE SUBMITTED ALL THE DETAILS ALONG WITH THE R ECONCILIATION STATEMENT BY ITS LETTER DATED 10-09-2008. THE ASSESSING OFFI CER AFTER EXAMINING THE REASONS FOR FALL IN GROSS PROFIT DIFFERENCE OF INC OME AS DISCLOSED IN THE RETURN AND TDS CERTIFICATES AND THE EXPENSES CLAIME D IN BIKANMER SITE FOUND THAT THE EXPLANATION OFFERED BY THE ASSESSEE BY LETTER DATED 10-09- 2008 IS REASONABLE AND ACCORDINGLY THE SAME WAS ACC EPTED. THE ASSESSEE HAS FILED THE COPY OF LETTER DATED 10-09-2 008 WHICH IS AVAILABLE IN THE PAPER BOOK. WE HAVE CAREFULLY GONE THROUGH THE LETTER DATED 10-09- 1998 AND THE QUERIES RAISED BY THE ASSESSING OFFICE R. WE HAVE ALSO CAREFULLY GONE THROUGH THE NOTICE ISSUED BY THE COM MISSIONER FOR THE REVISION OF THE ORDER U/S 143(3) OF THE INCOME-TAX ACT. ON VERIFICATION OF THE MATERIAL AVAILABLE ON RECORD IT APPEARS THAT T HE ASSESSING OFFICER HAS MADE THOROUGH ENQUIRY AND ACCEPTED THE EXPLANATION OF THE ASSESSEE EXPRESSLY AT PARAGRAPHS 3 4 & 5 OF THE ASSESSMENT ORDER. THEREFORE IT MAY NOT BE CORRECT TO THAT THE ASSESSING OFFICER HA S NOT CONDUCTED ANY ITA NO.52/RJT/2011 5 ENQUIRY. SINCE THE ASSESSING OFFICER HAS EXAMINED THE ISSUE AND ACCEPTED THE EXPLANATION OF THE ASSESSEE. THE COMMISSIONER IS NOT JUSTIFIED IN SAYING THAT THE ASSESSING OFFICER HAS NOT CONDUCTED ANY PROPER ENQUIRY WHILE ACCEPTING THE EXPLANATION OF THE ASSESSEE. I N OUR OPINION THE ASSESSING OFFICER HAS CONDUCTED PROPER ENQUIRY AND RECORDED HIS FINDING EXPRESSLY IN THE ASSESSMENT ORDER. THEREFORE THER E IS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY THE IMPUGNED ORDER OF THE AD MINISTRATIVE COMMISSIONER PASSED U/S 263 IS SET AIDE. 5. IN THE RESULT APPEAL OF THE ASSESSEE STANDS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09-09-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT DT : 09 TH SEPTEMBER 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT JAMNAGAR 4. THE DR I.T.A.T. RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT