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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: SHRI N.S. SAINI & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER : Since common questions of facts and law have been raised
in both the aforesaid appeals, the same are being disposed off by
way of consolidated order to avoid repetition of discussion.
The Appellant, M/s. Kumud Bandhu Mohapatra (hereinafter
referred to as ‘the assessee’) by filing the present appeals sought to
set aside the impugned orders dated 17.12.2014 & 22.01.2015
ITA No.176/CTK./2015 2 ITA No.177/CTK./2015 passed by the Commissioner of Income-tax (Appeals), Cuttack qua
the assessment years 2010-11 & 2011-12 respectively on the
grounds inter alia that :-
“ITA NO.176/CTK/2015 (AY 2010-11)
That the order passed by the learned CIT (A), Cuttack is highly illegal, arbitrary, bad in law, without any basis, contrary to facts, contrary to weight of evidence and ought to be quashed.
That the estimation of Net Profit @ 8% on the gross receipt of the learned CIT (A) is very high and ought to be reduced.”
“ITA NO.177/CTK/2015 (AY 2011-12)
For that, the order passed U/s 143(3)/145(3)/144 of the I.T., Act, 1961, by the DCIT, Balasore Circle, Balasore on dated 11th Ju1Y,2013 is arbitrary, illegal and devoid of merit, being unjustified deserves to be quashed in limini.
For that, the Vat refund of Rs.31,96,971/- added to the total income towards income from "other trading receipt" deserves to be deleted arbitrary, illegal and devoid of merit.
For that, the estimation of net profit from works contract @ 5 % of the gross receipt rejecting the book of account & invoking section 145 without referring to comparable cases and without considering past records of the appellant deserves to be set-aside being devoid of merit as illegal & arbitrary.
For that, the appellant craves leave to add/alter/amend further grounds, if any, at the time of hearing of appeal.”
ITA No.176/CTK./2015 3 ITA No.177/CTK./2015 3. Briefly stated the facts necessary for adjudication of the
controversy at hand are : assessee is a civil contractor and
Assessing Officer from the P&L account noticed gross receipts to
the tune of Rs.14,20,11,759/- and Rs.13,09,38,616/- in AY 2010-
11 and AY 2011-12 respectively and shown income from other
sources to the tune of Rs.10,53,900/- for AY 2010-11. Assessee
claimed depreciation on number of machinery items to the tune of
Rs.2,22,162/- in AY 2010-11 and deduction on royalties and sales-
tax from the gross bill to the tune of Rs.1,00,00,000/- and shown
the margin of profit at 2.5% which is not accepted by the AO being
on lower side and estimated the net profit @ 6% which comes to
Rs.85,20,705/-. Similarly, for AY 2011-12, assessee declared net
profit @ 1.93% of the total turnover of Rs.13,09,38,616/-, which is
also rejected by AO being on lower side and estimated the net
profit at 5% of turnover.
Assessee carried the matter before the ld. CIT (A) by way of
filing appeals who has dismissed the appeals and also in AY 2010-
11, the CIT (A) estimated the net profit @ 8% and enhanced the
income of assessee by Rs.22,04,392/- but affirmed the net profit at
5% for AY 2011-12 as assessed by the AO. Feeling aggrieved, the
assessee has come up before the Tribunal by filing the present
appeals.
ITA No.176/CTK./2015 4 ITA No.177/CTK./2015 5. We have heard the ld. Authorized Representatives of the
parties to the appeal, gone through the documents relied upon and
orders passed by the revenue authorities below in the light of the
facts and circumstances of the case.
The ld. AR for the assessee by relying upon the order passed
by the coordinate Bench of the Tribunal in ITA No.268/CTK/2013
in assessee’s own case contended that in this line of the business,
net profit @ 6% is not feasible and the Tribunal has already
estimated the assessee’s net profit @ 4.5% in AY 2008-09.
Since the AO has rejected the books of account and merely
proceeded to assess the net income at 6% on estimation basis as
against the net profit of 2.5% shown by the assessee in P&L
account, the same requires to be examined in the light of the net
profit shown in the earlier year. In the face of the facts that books
of accounts have been rejected and in the totality of facts and
circumstances of the case, we are of the considered view that net
profit of the assessee should be estimated at 4.5% for both the
assessment years i.e. 2010-11 & 2011-12 following the coordinate
Bench decision in assessee’s own case in AY 2008-09 as there is
not an iota of evidence on record, that in the similar line of
business some extraordinary circumstances have come on record to
ITA No.176/CTK./2015 5 ITA No.177/CTK./2015 assess the net profit at 8% by the ld. CIT (A) for 2010-11 and 5%
by AO for AY 2011-12.
Ground No.2 of AY 2011-12 has not been pressed by ld. AR
for the assessee, hence determined against the assessee.
In the result, both the appeals filed by the assessee are partly
allowed. Order pronounced in open court on this 29th day of May, 2017.
Sd/- sd/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated the 29th day of May, 2017 TS
Copy of the order forwarded to: 1.Appellant - M/s. Kumud Bandhu Mohapatra, Sarasatia, Ranital, Bhadrak. 2.Respondent ACIT, Balsore Circle, Balasore. 3.CIT 4.CIT (A)-II, Bhubaneswar 5.DR(ITAT), Cuttack. 6.Guard File //True Copy//
BY ORDER
SR. PRIVATE SECRETARY, ITAT, CUTTACK