DCIT, JAIPUR vs. RAJ CONSTRUCTION COMPANY, JAIPUR

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ITA 524/JPR/2015Status: DisposedITAT Jaipur24 April 2017AY 2011-125 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, following its own precedent from a prior assessment year with identical facts, directed the Assessing Officer to restrict the addition to Rs. 4 lakhs, aligning with the previous year's assessment.

What were the facts?

The Assessing Officer rejected the assessee's books of accounts and estimated net profit at 11.5% on gross receipts. The CIT(A) reduced this to 8%. The assessee appealed, arguing for a lower rate based on past years, while the revenue sought to uphold the AO's higher rate.

What were the issues?

Whether the CIT(A) erred in confirming the rejection of books of accounts and estimating net profit at 8%, and whether past assessment orders should be followed for consistency.

Which sections of the Income-tax Act were involved?

Section 145(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 538/JP/2015

Heard together (2 matters)

ITA No. 538/JP/2015
ITA No. 524/JP/2015

Read from the judgment's own cause title. This page is filed under one of them.

PER SHRI KUL BHARAT, JM.

These two cross appeals by the Assessee and the Revenue is directed against the

order of the Ld. CIT(A)-2, Jaipur dated 09.03.2015.

First we take up the Assessee’s appeal in ITA No. 538/JP/2015 pertaining

to the Assessment Year 2011-12.

The Assessee has raised the following grounds of appeal :-

“1. That the Ld. CIT(A) has erred in law as well as in facts of the case in confirming the rejection of Books of Accounts u/s 145(3) of the IT Act.

2 ITA Nos. 538/JP/2015 & 524/JP/2015 M/s Raj Construction Company.

2.

That the Ld. CIT(A) has erred in law as well as in facts of the case in estimating net profit @ 8% of the contract receipts (before depreciation, interest, interest and salary to partners) as against N.P. rate (subject to all as above) @ 6.86% declared by the appellant.

3.

That the Ld. CIT(A) has grossly erred in law as well in facts of the case in making artificial & arbitrary differentiation of the facts of the relevant yer vis-à-vis facts of the preceding years and thereby not considering the past history of the appellant as comparable. 4. That the ld. CIT(A) has grossly erred in law as well in facts of the case in not following the appellant orders of the preceding years in the appellant’s own case thereby violated the fundamental principle of consistency.

5.

That the appellant craves leave to add/ alter any of the grounds of appeal before or at the time of hearing.”

2.

At the time of hearing the Ld. Counsel for the assessee submitted that, he

does not wish to press ground no. 1. The Ld. DR has no objection, same is

dismissed has not pressed.

3.

Ground nos. 2,3, and 4 are against estimating the net profit @ 8%.

4.

Briefly stated the facts are that the case of the assessee was picked up for

scrutiny and the assessment was framed under section 143(3) of the I.T. Act, 1961

(hereinafter referred to as the Act). The AO after noticing the defects reiterated the

books of accounts and applied net profit @ 11.5% on the gross receipts. Thereby,

the Assessing Officer computed income at Rs. 78,65,260/- against the income

declared by the assessee at Rs. 25,28,240/- Aggrieved by this, the Assessee

preferred an appeal before Ld. CIT(A), who after considering the submissions

applied net profit @ of 8%. Against this both the Assessee and Revenue has filed

separated appeals.

3 ITA Nos. 538/JP/2015 & 524/JP/2015 M/s Raj Construction Company.

5.

Ld. Counsel for the assessee submitted that the issue is otherwise covered

by the decision of the Hon’ble Tribunal in assessee’s own case pertaining to the A.Y.

2010-11.

6.

There was difference of opinion amongst the Ld. Judicial Member and the Accountant Member of the Tribunal. The matter was referred to the Ld. 3rd Member and Ld. 3rd Member concurred the view of the Ld. Accountant Member. Thereby,

the lump-sum addition of Rs. 4 lakhs was confirmed. The facts are identical as were

in the Assessment Year 2010-11.

7.

On the contrary, the ld. Departmental Representatives submitted that each

assessment year is independent required to be assessed in accordance with the facts

of that year. He supported the order of the Assessing Officer.

8.

We have heard the rival contentions perused the material available on record

and gone though the order of the authorities below. There is no change into the

facts and circumstances in the present year. The Revenue has not pointed out, into

facts and circumstances. Therefore, taking a consistent view, we hereby direct the

Assessing Officer to restrict the addition to the extent of Rs. 4 lakhs as was made in

the assessment year 2010-11. In the light of the above ground nos. 2,3, & 4 of the

appeal of the assessee are partly allowed.

9.

Ground no. 5, is general in nature and needs no separate adjudication. Thus,

appeal of the assessee is partly allowed.

10.

Now, we take up the Revenue’s appeal in ITA No. 524/JP/2015,

pertaining to the Assessment Year 2011-12.

10.1 The revenue has raised following ground of appeal:-

4 ITA Nos. 538/JP/2015 & 524/JP/2015 M/s Raj Construction Company.

“1. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred in applying N.P. rate of 8.00% as against N.P. rate of 11.5% applied by the AO. 2. The appellant craves its right to add, amend or alter any of the grounds on or before the hearing.”

10.2. Only effective ground is against applying the net profit @ 8% against the net

profit @ 11.5% applied by the Assessing Officer. Both the respective

representatives of the parties have adopted the same argument as were in

assessee’s appeal in ITA No. 538/JP/2015. The issue in this appeal has already

been decided in Assessee’s appeal in ITA NO. 538/JP/2015 by observing as

under:-

“7. We have heard the rival contentions perused the material available on record and gone though the order of the authorities below. There is no change into the facts and circumstances in the present year. The Revenue has not pointed out, into facts and circumstances. Therefore, taking a consistent view, we hereby direct the Assessing Officer to restrict the addition to the extent of Rs. 4 lakhs as was made in the assessment year 2010-11. In the light of the above ground nos. 2,3, & 4 of the appeal of the assessee are partly allowed.”

Therefore, following our finding in ITA No. 538/JP/2015, the ground raised in this

appeal is dismissed.

11.

In the result, Appeal of the assessee in ITA No. 538/JP/2015 is partly

allowed and Appeal of the Revenue in ITA No. 524/JP/2015 is dismissed.

5 ITA Nos. 538/JP/2015 & 524/JP/2015 M/s Raj Construction Company.

Order pronounced in the open court on Monday the 24th day of April 2017.

Sd/- Sd/- ( dqy Hkkjr) ¼foØe flag ;kno½

(VIKRAM SINGH YADAV) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member

Jaipur Dated:- 24 /04/2017. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

1.

The Appellant- M/s Raj Construction Company. 2. The Respondent- The ACIT Circle-5, Jaipur. 3. The CIT, 4. The CIT (A) 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 538/JP/2015 & 524/JP/2015)

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

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