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Income Tax Appellate Tribunal, SMC BENCH, PATNA
Before: SHRI CHANDRA MOHAN GARG
This appeal is filed by the assessee assailing the order of Commissioner of Income Tax (Appeals), Jamshedpur, dated 10.05.2018 for the assessment year 2012-2013. 2. Apart from the grounds of appeal raised by the assessee, ld. AR, at the outset, placed reliance on the decision of Hon’ble Patna High Court in the case of DCIT Vs. M/s Salauddin, rendered in Miscellaneous Appeal No.77 of 2010, dated 11.04.2012 and submitted that estimation of net profit may kindly be reduced to 6% which has been found justified and proper in a case of civil contract by the Hon’ble Patna High Court in the above case (supra). Further ld. AR submitted that the Assessing Officer has estimated income from machinery rent @20% of gross receipt of hire
2 charges from JCB without considering the fact that the assessee has duly audited by the qualified Chartered Accountant, therefore, estimation @15% may kindly be accepted. With regard to charging of interest u/s.234B of the Act, ld. AR submitted that this issue is covered in favour of the assessee on the decision of Hon’ble Jharkhand High Court in case of Ajay Prakash Verma in ITA No.38 of 2010 reported in 2013(1) TMI 140, wherein the hon'ble High Court has held that interest u/s.234B can be levied only on the returned income and not on the assessed income.
On the other hand, ld. DR relied on the orders of authorities below and did not controvert with regard to accepting net profit @6% and charging of interest u/s.234 of the Act as per the judgments relied on by the ld.AR of the assessee. Ld. DR also fairly agreed to income from machinery rent @15% of gross receipt of hire charges from JCB.
On careful consideration of the rival submissions of both the parties, I find in the instant case the Assessing Officer has estimated net profit @8% after considering all expenses including depreciation. The CIT(A) confirmed the net profit @8% estimated by the Assessing Officer. However, as per proposition rendered by the Hon’ble Patna High Court in the case of M/s Salauddin, in Miscellaneous Appeal No.77 of 2010, dated 11.04.2012, it has been held that in a case of civil contractor estimation of net profit @6% of the total contractual receipts is justified and reasonable. Therefore, respectfully following the same, I direct the Assessing Officer
3 to estimate of net profit of the assessee @6% of the total gross contract receipts and allow the relief accordingly.
With regard to estimated income from machinery rent @20% of gross receipt of hire charges from JCB, both the parties have agreed that estimation of income from machinery rent @15% on the total gross receipt may be accepted. Therefore, with the consent of parties, I direct the Assessing Officer to estimate income from machinery rent @15% on the total gross receipt of hire charges from JCB instead of 20%. I order accordingly.
With regard to charging of interest u/s.234B of the Act, the issue is covered by the decision of Hon'ble Jharkahnd High Court in the case of Ajay Prakash Verma in ITA No.38 of 2010 reported in 2013(1) TMI 140, wherein the Hon’ble High Court has held that the revenue can levy the interest only on the total income declared in the returns and not on the income assessed and determined by the AO to that extent. Respectfully following the above decision of the Hon’ble Jharkhand High Court, I direct the AO to recompute the interest u/s.234B of the Act on the basis of total income declared by the assessee in the return filed. This ground of appeal of the assessee is allowed.
In the result, appeal of the assessee is partly allowed. Order pronounced in the open court on 18/09/2019. (C.M.GARG) न्यानयक सदस्य / JUDICIAL MEMBER पटना /Patna; दिनांक Dated 18/09/2019 Prakash Kumar Mishra, Sr.P.S.(on tour)
4 आदेश की प्रनिललपप अग्रेपर्ि/Copy of the Order forwarded to : अपीलाथी / The Appellant- 1. प्रत्यथी / The Respondent- 2. 3. आयकि आयुक्त(अपील) / The CIT(A), आयकर आयुक्त / CIT 4. निभधगीय प्रनतनिनर्, आयकि अपीलीय अनर्किण, पटना / DR,
ITAT, Patna गार्ड फाईल / Guard file. 6. सत्यापपत प्रतत ////
आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अधिकरण, पटना / ITAT, Patna