THE DY. COMMR. OF INCOME TAX, CIR.-1(1),, RAJKOT-GUJARAT vs. M/S BACKBONE PROJECTS LIMITED.,, AHMEDABAD

The brief facts of the case is that the assessee is a Company engaged in the business of Civil Contractor and carried out various infrastructure projects. For the Assessment Year 2013-14, the assessee filed its Return of Income declaring total income of Rs.1,29,95,389/-. The case was selected for scrutiny assessment as the assessee claimed High ratio of refund to TDS, Large expenses in the claim of Profit and Loss account and Low income shown being a large contractor. A show cause notice was issued to explain the above reasons and why the income should not be estimated at 8% on the total turnover of the assessee.

Aggrieved against the exparte assessment order, the assessee filed an appeal before the Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad. The Ld. CIT(A) after calling for a Remand Report from the Assessing Officer, deleted the estimation of income @ 8% made by the Assessing Officer as follows: “…. 8. Facts of the case, findings of the AO and submissions of the appellant have been gone through. It was observed from the assessment order that the AO issued show cause notice on 02.11.2015 calling for certain details, which were originally called for from the assessee in the notice u/s 142(1) dated 31.7.2015, but the assessee failed to submit the same. The details were related to the method of working of WIP and closing stock, construction activities and other expenses. He also called for details of default in depositing PF to the accounts of the employees, proof of new additions made to the fixed assets, copy of bank statements, cost of material expenses etc. with supporting evidence. Explanation was also called for about receipt of interest from J&K Bank Ltd, high ratio of refund from TDS, large other expenses and low income inspite of having huge contract receipts. The assessee was asked to furnish these details on 16.11.2015 and in case of non-compliance by the assessee The AO proposed to reject books of accounts and estimate profits @ 8%. 8.1. As discussed above, the appellant furnished copy of the details, which he claimed to have submitted to the AO during the assessment proceedings in compliance to the show cause notice dated 2.11.2015. In view of such facts and circumstances of the case, a remand report was called for from the AO. He was also requested to allow an opportunity to the appellant if required. The AO categorically mentioned in para 4.3 to 4.6 in the remand report that the assessee produced all the books of accounts with vouchers and bank statements. Written submissions, in response to the details called for, were also furnished. The books of account were produced in soft copy also which was placed on record. Similarly, the AO also gathered information u/s 133(6) from the sundry creditors and found Page No 4 DCIT vs. M/s. Backbone Projects Ltd.

Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal:

Per contra Ld. A.R. Shri D.M. Rindani appearing for the Assessee submitted before us a Paper Book carrying various details filed by the assessee in response to the 142(1) notice and the record submitted during Remand Report proceedings and the Ld. A.O.’s Remand Report findings as follows: 4.2 On being remand proceedings, the assessee has been given ample opportunity of being heard vide this office letter did. 21.11.2016 & 05.01.2017 and has been asked to furnish the details called for alongwith all its books of accounts. 4.3 In response the assessee has produced all its books of accounts, bills, vouchers, banks accounts on 19.01.2017. The assessee also filed a written submission in response to details called for. The Assessee produced all the books of accounts in softcopy also which is also kept on record. 4.4 During the course of remand proceedings and on the basis of details of sundry creditors information u/s 133(6) to various trade creditors were called for and the same, has been received and found to be in order. 4.5 In respect of an additional evidences and details of the contract receipts., as per the directions of the Ld. CIT(A) u/s 250(4) of the Income Tax Act, on being enquired to the Assessee, the assessee, during the course of remand proceedings, has produced the computerized print outs of the books of accounts consisting of registers including contract receipt ledger, ledger of back to back contract payment to sub-contractors, Job work Register, Purchase Register, and the bills of purchase, sale, copy of bank book etc. 4.6 On random verification of the bills including purchase bills, contract bills arid payment of job work charges, payment of expenses etc. were verified and found in order.

We have given our thoughtful consideration and perused the materials available on record. From going through the Ld. CIT(A)’s Page No 6 DCIT vs. M/s. Backbone Projects Ltd. order and Remand Report submitted by the Assessing Officer dated 13.6.2017, the operating portion extracted hereinabove. We find that the Assessing Officer has verified the records produced including books of account, bills, vouchers, bank accounts and also summoned various trade creditors and found the same to be in order. The Assessing Officer also verified the job work charges, payment of expenses etc. and found to be in order. Based on the above Remand Report, the Ld. CIT(A) has deleted the addition made by the Assessing Officer. Thus the appeal filed by the Revenue is an unnecessary exercise and frivolous appeal. We do not find any merits in the ground raised by the Revenue, so the same is hereby rejected.

In the result, the appeal filed by the Revenue is hereby dismissed. Order pronounced in the open court on 06-01-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 06/01/2023 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,