ACIT, CORPORATE CIRCLE-1(2), BHUBANESWAR vs. M/S. SIDHARTHA ENGINEERING LIMITED, BHUBANESWAR

On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified on facts and in law in deleting the addition of Rs.87,54,592/- made by the AO considering reasonable rate of net profit i.e. 7.59% of the turnover of the assessee.

On the facts and in the circumstances of the case and having regard to the findings given by the AO in the assessment order, the Ld. CIT(A) ought to have upheld the above addition made by the Assessing Officer.

The appellant craves to alter, amend or add any other ground that may be considered necessary in course of the appeal proceedings.

Facts in brief are that the assessee is a limited company engaged in the business of electrical contractor and filed return of income on 29.09.2012 with total income of Rs.1,51,74,221/-. Subsequently the case

Finally the CIT(A) considering the facts, submissions of the assessee and the counter comments of the assessee on the remand report submitted by the AO, is of the opinion that the assessee is a very old company existing for more than 30 years and the books results of the assessee were never rejected earlier. The CIT(A) further observed that the AO in his assessment order has mentioned that in the course of assessment proceedings all books of accounts were produced except stock register. The assessee filed written submission with reasons in respect of not providing stock register. Accordingly, the CIT(A) directed the AO to accept the book results disclosed by the assessee and sustained the addition to the extent of Rs.1,93,200/- and partly allowed the appeal of the assessee.

Aggrieved by the order of CIT(A) the revenue is in appeal before the Tribunal.

Before us the ld. DR submitted that the assessee has not produced the stock register before the AO, in the assessment proceedings. Further the ld. DR also submitted that the assessee has disclosed lower net profit rates compared to earlier years, therefore, the AO was justified in making the addition further the CIT(A) is not proper to sustain the addition partly and prayed for setting aside of the order of CIT(A).

Per Contra, the ld. AR of the assessee supported the order of CIT(A) and submitted that books of accounts were produced and in earlier years the Revenue has accepted the assessee’s claim in respect of net profits for assessment and prayed for dismissal of the Revenue’s appeal.

We have heard rival submissions and perused the materials available on record. Prima facie, the sole crux of the issue is with respect of estimation made by the AO irrespective of the fact that the assessee has maintained books of accounts. The ld. AR of the assessee submitted that books of accounts were submitted and Tax Audit u/s.44AB of the Act was conducted. Ld. AR emphasized and drew attention that in the assessment proceedings the AO at page 2 of the order has made a mention that “written submissions as and when required were filed. Books of accounts along with evidential vouchers and registers were produced and examined at length and the case was heard.” These facts prove that the assessee has produced books of accounts before the AO and are verified. We find that the assessee is a limited company, incorporated under the Companies Act, 1956 and the comply the provisions of Company Act for filing the annual return yearly. The audited books of 5 accounts were not denied by the AO in his remand report as emphasized by the ld AR at page 2 of the order that the assessee has produced the books of accounts and examined the same.

We found that the CIT(A) has made a detailed observation and provided an opportunity to the assessee and the AO for comments on remand report. The AO in the remand report mentioned that the assessee has maintained the books of accounts except stock register. The AR’s contention that when the assessee has complied with the directions of the AO and the rejection of book results is bad in law. We found there is strength in the arguments of the ld. AR of the assessee. The revenue could not come out with any error except mentioning that the books of accounts were not produced and stock register. We found the assessee is a company which is engaged in the electrical contract business since last 30 years and the Revenue has been accepting its claim considering his book results. We found the CIT(A) has considered the submission vis-à- vis the explanations of the assessee and passed a reasoned order. Accordingly, we are not inclined to interfere with the order of CIT(A) and upheld the same and dismiss the grounds of appeal of Revenue.

In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on this 20/03/2018. (N. S. SAINI) (PAVAN KUMAR GADALE) ऱेखा सदस्य / ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनांक Dated 20/03/2018 प्र.कु.मि/PKM, Senior Private Secretary

M/s Sidhartha Engineering Limited, Plot No.1389, Gandamunda Bhubaneswar-751030 आयकि आयुक्त(अपील) / The CIT(A), 3. आयकर आयुक्त / CIT 4. 5. निभागीय प्रनतनिनर्, आयकि अपीलीय अनर्किण, कटक / DR, ITAT, Cuttack गार्ड फाईऱ / Guard file. 6. सत्यापपत प्रतत //// आदेशािुसार/ BY ORDER,