Sri.Vinod Kumar, Calicut v. ITO, Calicut

ITA 661/COCH/2013 | 2009-2010
Pronouncement Date: 25-04-2014 | Result: Partly Allowed

Appeal Details

RSA Number 66121914 RSA 2013
Assessee PAN AFNPK1389N
Bench Cochin
Appeal Number ITA 661/COCH/2013
Duration Of Justice 6 month(s) 4 day(s)
Appellant Sri.Vinod Kumar, Calicut
Respondent ITO, Calicut
Appeal Type Income Tax Appeal
Pronouncement Date 25-04-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 25-04-2014
Date Of Final Hearing 22-04-2014
Next Hearing Date 22-04-2014
Assessment Year 2009-2010
Appeal Filed On 21-10-2013
Judgment Text
1 ITA NO.661/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 661/COCH/2013 (ASSESSMENT YEAR 2009-10) SHRI VINODKUMAR K.K. VS ITO WD.1(2) CONTRACTOR USHAS KOZHIKODE PUTHIYARA KOZHIKODE-4 PAN : AFNPK1389N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.V. MURALIDHARAN RESPONDENT BY : SHRI K.K. JOHN DATE OF HEARING : 22-04-2013 DATE OF PRONOUNCEMENT : 25-04-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A) KOZHIKODE DATED 26-09-2013 AND PERTAINS TO ASSESSME NT YEAR 2009-10. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF RS.27 06 292 TOWARDS UNACCOUNTED CONTRACT RECEIPTS. 3. SHRI A.V. MURALIDHARAN THE LD.REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE COULD NOT ACCOUNT THE R ECEIPT OF RS.27 06 292 2 ITA NO.661/COCH/2013 TOWARDS CONTRACT RECEIPTS AS ALSO THE EXPENSES TOWA RDS THOSE RECEIPTS. THEREFORE THE ASSESSEE CLAIMED BEFORE THE ASSESSIN G OFFICER THAT THE EXPENDITURE INCURRED IN CONNECTION WITH CONSTRUCTIO N HAS TO BE ALLOWED AND ONLY THE PROFIT ELEMENT EMBEDDED IN THE CONTRACT RE CEIPT MAY BE ADDED. HOWEVER THE ASSESSING OFFICER REJECTED THE CLAIM O F THE ASSESSEE AND MADE ADDITION OF RS.27 06 292. ON A QUERY FROM THE BENCH WHAT WOULD BE THE REASONABLE PROFIT FROM CONTRACT THOUGH SECT ION 44AD PRESCRIBES 8% PROFIT THE LD.REPRESENTATIVE SUBMITTED THAT ESTIMA TION OF 10% PROFIT ON THE UNDISCLOSED CONTRACT RECEIPT WOULD MEET THE ENDS OF JUSTICE. 4. ON THE CONTRARY SHRI K.K. JOHN THE LD.DR SUBMI TTED THAT THE ASSESSEE INTENTIONALLY OMITTED THE CONTRACT RECEIPT OF RS.27 06 292 FROM THE GROSS RECEIPTS. THE ENTIRE EXPENDITURE FOR CAR RYING OUT THE CONSTRUCTION WORK WAS ALREADY ACCOUNTED. THEREFORE THE RECEIPT OF RS.27 06 292 HAS TO BE TREATED AS PROFIT. HENCE THE CIT(A) HAS RIG HTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY THE ASSESSEE HAS NOT ACCOUNTED THE CONTRACT RECEIPTS OF RS.27 06 292 . THE ASSESSEE IN FACT RECEIVED THE TOTAL CONTRACT RECEIPTS OF RS.85 65 05 5. HOWEVER THE ASSESSEE HAS DISCLOSED RS. 58 57 763 IN THE PROFIT & LOSS ACCOUNT. THE 3 ITA NO.661/COCH/2013 ASSESSING OFFICER FOUND THAT THE BOOKS OF ACCOUNT W ERE AUDITED AND THE ASSESSEE CLAIMED THAT ALL RECEIPTS AND PAYMENTS HAV E BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. THEREFORE THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE FOR EXPENSES. IT IS NOT IN D ISPUTE THAT WHAT WAS RECEIVED BY THE ASSESSEE IS CONTRACT RECEIPT FOR CI VIL CONSTRUCTION. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE SUPPRESSED THE CONTRACT RECEIPT THE PROFIT ELEMENT EMBEDDED I N SUCH UNACCOUNTED RECEIPTS ALONE HAS TO BE TAKEN AS PROFIT. BY TAKIN G INTO CONSIDERATION OF THE FACT THAT THE ASSESSEE HAS NOT MAINTAINED ANY RECEI PT / VOUCHER FOR THE EXPENDITURE INCURRED IN RESPECT OF RECEIPTS OF RS.2 7 06 292 AND THE PROFIT OF THE ASSESSEE FOR THE EARLIER ASSESSMENT YEAR AS ALS O THE SUBSEQUENT ASSESSMENT YEAR ESTIMATION OF PROFIT AT 15% WOULD MEET THE ENDS OF JUSTICE. IN FACT THE LD.REPRESENTATIVE FOR THE AS SESSEE SUGGESTED THAT 10% WOULD BE THE REASONABLE PROFIT. HOWEVER THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT 10% IS ON THE LOWER SIDE AND ESTIMATIO N OF PROFIT AT 15% OF THE TOTAL UNACCOUNTED RECEIPT OF RS.27 06 292 WOULD BE REASONABLE. ACCORDINGLY THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE T HE PROFIT ON THE UNACCOUNTED CONTRACT RECEIPTS OF RS.27 06 292 AT 15 % AND RESTRICT THE ADDITION TO THAT EXTENT ONLY. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 4 ITA NO.661/COCH/2013 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH APRIL 2014. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 25 TH APRIL 2014 PK/- COPY TO: 1. SHRI VINODKUMAR K.K CONTRACTOR USHAS PUTHIY ARA KOZHIKODE 673 004 2. THE ITO WD.1(2) KOZHIKODE 3. THE COMMISSIONER OF INCOME-TAX KOZHIKODE 4. THE COMMISSIONER OF INCOME-TAX(A) AAYAKAR BHAVA N MANANCHIRA KOZHIKODE 673 001 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH