M/S VIJAY KUMAR GARG CONTRACTORS vs. COMMISSIONER OF INCOME TAX

206 IN TH

M/S VIJAY K

COMMISSIO CORAM: H

Present M

* SANJEEV PR

HE HIGH COURT OF PUNJA CHANDIGAR I D KUMAR GARG CONTRACTOR

V ONER OF INCOME TAX AND HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. Akshay Bhan, Sr. Advocate Mr. Yugank Goel, Advocate for t Mr. Vaibhav Gupta, Standing Co for Income Tax Department. *** RAKASH SHARMA, J. (Oral) Learned Senior Counsel for the a r of CIT(A) was not required Appellate Tribunal (for short, ased on the gross profit rate b there was no occasion to observe ment year was required to be foll Learned counsel appearing on nts out that the ITAT has examin tial question of law required to b We have considered the subm servations, which are as under: “8.3 Besides, we have a claimed to have shown GP

AB AND HARYANA AT RH ITA-110-2003(O&M) Date of Decision:08.08.2024 RS

..…...Appellant V/s. D ANR ….....Respondents

NJEEV PRAKASH SHARMA. NJAY VASHISTH. with the appellant. ounsel appellant has vehemently argued to be interpreted at all by the ‘the ITAT’) and the additions by the ITAT is erroneous. He e that the gross profit rate of the lowed. behalf of respondent/revenue ned the question of fact and there e examined by this Court. missions. The ITAT has made also observed that the assessed P @ 11.42% the assessment year

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under reference. While wo has included other income the paper book, which is a profit on sale of investm 23,49,426. This is include 243. Such profit had no receipts as the same wa assessee had shown l Rs.11,31,066. Thus the a required to be reduced fr the GP rate. If we deduct a the total credits on income amount remains at Rs.2,6 Rs.23,49,426 being profit to be reduced from the GP the GP works out to Rs. 9 The same works out to 10.87% and 9.63% of the 92 respectively. Therefore that GP shown by the as under reference is better assessment years is absol but an attempt to mislead t 9. The next issue that Bench is, whether estima applying net profit rate of was correct? From the fac that in the past the assesse and 9.63% for the asses respectively. As against assessee works out to 3.5% The AO has applied only

orking out the GP, the assessee e of Rs. 26, 27, 243. PAge 17 of a copy of audited account, shows ents, i.e. sale of shares at Rs. ed in the income of Rs. 26, 27, othing to do with the contract as on sale of shares on which long terms capital gain of amount of Rs. 23,49,426 Was rom the income for working out an amount of Rs.23,49,426 from e side of Rs.2,86,65,379, the net 63,15,953. Likewsie, amount of on sale of shares was required P of Rs. 32,73,557. If we do so, 9,24, 131 (3273557 23,49,426). 3.51% as against GP rate of assessment years 90-91 and 91- e, the contention of the assessee ssessее for the assessment year r than the GP of the earlier utely wrong and this is nothing the Bench. t requires to be decided by this ation of income by the A0 by 7% inclusive of depreciation cts detailed above, it is obvious ee had shown GP rate of 10.87% ssment years 90-91 and 91-92 this, the GP rate shown the %, which is lower by almost 6%. y net profit rate of 7%, which

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appears to be fair and rea so, the AO has not allo depreciation. This is c jurisdictional High Cour Court in the case of CIT Ltd., 252 ITR 412, where CBDT's Circular No.29- held that even if income is rate, the AO is duty boun same is claimed by the ass full particulars thereof. Th of the AO in estimating th rate of 7%, we direct the A the provisions of law and k Punjab & Haryana High Bros (supra). We order ground is partly allowed. 10. The next ground of the CIT(A) was not disallowance to Rs.50,000 by the AO. The facts of estimated the income by ap disallowance for the expe fact that income was est results and by applying CIT(A) held that the AO w book results. However, disallowance of Rs.50,00 keeping in view the past hi already set aside the ord rejection of book results a there is no point in ma

asonable. However, while doing owed deduction on account of contrary to the judgment of rt of Punjab & Haryana High T Vs. Chopra Bros. (India) Pvt. the High Court by referring to -D(XIX)-14 dated 31.8.65 has estimated by applying net profit nd to allow depreciation if the sessee in the return and furnish hus, while we uphold the action he income by applying net profit AO to allow depreciation as per keeping the judgment of Hon'ble h Court in the case of Chopra accordingly. This part of the f appeal relates to the fact that justified in restricting the 0 from the trading addition made the case are that the AO had pplying net profit rate. separate enses was made in view of the timated by rejecting the book net profit rate. On appeal, the was not Justified in rejecting the the CIT(A) sustained the 00 out of the various expenses istory of the case. Since we have der of CIT(A) on the issue of and upheld the action of the AO, aking further disallowance of

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Rs.50,000. Therefore, we s and direct the AO not to m Rs.50,000. This ground of Thus, we find that the ITAT h ts and also gone through the bo findings are purely factual and n uestion of best judgment assessm and the present appeal is hereby d pending application stands dism [SANJEEV [SAN 024 speaking / reasoned

:Yes / No Reportable

:Yes/ No

setaside the order of the CIT(A) make any separate disallowance f appeal is allowed.” has taken into consideration the oks of accounts and the audited need not be gone in the present ment would also not apply in the dismissed. issed accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE

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