ITO, Satara v. Sagunamata Constructins P. Ltd., Satara

ITA 1529/PUN/2007 | 2004-2005
Pronouncement Date: 29-10-2010 | Result: Dismissed

Appeal Details

RSA Number 152924514 RSA 2007
Assessee PAN AAICS0973R
Bench Pune
Appeal Number ITA 1529/PUN/2007
Duration Of Justice 2 year(s) 11 month(s) 7 day(s)
Appellant ITO, Satara
Respondent Sagunamata Constructins P. Ltd., Satara
Appeal Type Income Tax Appeal
Pronouncement Date 29-10-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-10-2010
Assessment Year 2004-2005
Appeal Filed On 22-11-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 1529/PN/2007 (ASSESSMENT YEAR: 2004-05) I.T.O SAGUNAMATA CONSTRUCTIONS P. LTD. WARD-2 BHONGALE BLDG. NER KIRTI STAMBH SATARA VS. LAXMINAGAR PHALTAN DIST. SATARA PAN NO. AAICS0973R APPELLANT RESPONDENT APPELLANT BY: SMT. MANJU AJWANI RESPONDENT BY: SHRI M.K. KULKARNI O R D E R PER B. RAMAKOTAIAH A.M. THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER S OF THE CIT(A)-II PUNE DATED 29/08/2007. 2. THE REVENUE HAS RAISED SEVEN GROUNDS ON THE ISSU E OF REDUCING THE GROSS PROFIT FROM 11.59% TO 7.5% BY THE CIT(A). THE ASSES SEE COMPANY IS A CIVIL CONTRACTOR. ON VERIFYING THE COMPARATIVE FIGURES FO R THE LAST THREE ASSESSMENT YEARS PERTAINING TO THE BUSINESS PROFIT RATIO AND T OTAL RECEIPTS THE A.O ASKED THE ASSESSEE WHY BOOKS OF ACCOUNT SHOULD NOT BE REJE CTED AND GP RATIO SHOULD NOT BE ESTIMATED AS IT HAS FALLEN FROM 14.05% IN 20 01-02 TO 6.05% IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE EXPLAINED THAT TH ERE WAS INCREASE IN COSTS BUT THE RATES RECEIVED IN GOVERNMENT CONTRACTS PART ICULARLY FROM MAHARASHTRA KRISHNA VALLEY DEVELOPMENT CORPORATION VOUCHER WAS FIXED AND INTEREST EXPENDITURE HAS ALSO INCREASED AS THE BILLS HAVE NOT BEEN PASSED IN TIME. THE A.O DID NOT ACCEPT THE SUBMISSIONS AND ESTIMATED TH E PROFIT RATE AT 11.59% ON THE BASIS OF THE IMMEDIATELY PREVIOUS YEAR RESULTS. THE CIT(A) HAS GIVEN THE FACTUAL FINDINGS AS UNDER:- 2.3 I HAVE GONE THROUGH THE FACTS OF THE CASE. THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNTS OF THE A SSESSEE MAINLY ON THE GROUND THAT THE ASSESSEE HAD MAINTAINED HAND MA DE VOUCHERS IN SUPPORT OF THE EXPENSES WHICH WERE NOT SUPPORTED BY ANY THIRD PARTY BILLS AND THAT NO STOCK REGISTER WAS MAINTAIN ED. THE APPELLANT ON THE OTHER HAND HAS COMPARED THE RATES QUOTED AT THE TIME OF FILING THE TENDER WITH THE RATES OF DIFFERENT CONSUMABLES AT THE TIME OF EXECUTING THE WORK. NO PROOF THAT SUCH RATES HAVE I NCREASED IN THE PROPORTIONS STATED IN THE ASSESSMENT ORDER / STATEM ENT OF FACTS HAVE BEEN FILED IN THE APPELLATE PROCEEDINGS. FURTHER T HE CONTENTION OF THE ITA NO. 1529/PN/2007 A.Y 2004-05 2 ASSESSING OFFICER THAT THE HAND MADE VOUCHERS WERE MAINTAINED WITHOUT SHOWING THAT PAYMENTS WERE MADE BY CHEQUE H AS NOT BEEN CONTROVERTED. THE CONTENTION OF THE AUTHORISED REP RESENTATIVE THAT THERE WAS INCREASE IN THE INTEREST AMOUNT PAID DURI NG THE YEAR AS COMPARED TO THE LAST YEAR ON ACCOUNT OF BUSINESS NE ED HAS NOT BEEN PROVED. THE PERCENTAGE INCREASE ON ACCOUNT OF ROYAL TY AMOUNT DEDUCTED FROM THE BILLS PAYABLE HAS ALSO NOT BEEN P ROVED BY FILING SUFFICIENT PROOF OF THE INCREASE AS COMPARED TO THE LAST YEAR. AT THE SAME TIME AS THE ASSESSEE HAS BEEN TAKING CONTRACT WORK OF GOVERNMENT AND THE ASSESSING OFFICER HAS NOT SHOWN THAT THERE WAS ANY FURTHER AMOUNT RECEIVED ON ACCOUNT OF REVIS ION OF THE TENDER PRICES AND HAS ALSO NOT CONTROVERTED THE PERCENTAGE INCREASE SHOWN IN PARA 4.1 OF THE ASSESSMENT ORDER EXCEPT STATING THAT THE ASSESSEE HAD MAINTAINED HAND MADE VOUCHERS IN RESPECT OF THE EXPENSES THE ENTIRE ADDITION MADE ON ACCOUNT OF GROSS PROFIT RAT IO CANNOT BE SUSTAINED. . IN VIEW OF THE ABOVE FACTS NARRATED WHE RE THE PROOF IS NOT FORTHCOMING FROM THE ASSESSEE NOR ANY COGENT MATERIAL ON THE BASIS OF WHICH THE BOOKS OF ACCOUNT OF THE A SSESSEE WERE REJECTED FROM THE ASSESSING OFFICER IT IS HELD THAT THE ENDS OF JUSTICE WOULD BE MET IF A GROSS PROFIT RATIO OF 7.5% IS APP LIED ON GROSS RECEIPTS OF RS. 2 74 95 008/-. THE APPELLANT GETS R ESULTANT RELIEF. THE GROUND OF APPEAL IS PARTLY ALLOWED. 2.1 AFTER RECORDING THE FACTUAL FINDING AS ABOVE TH E CIT(A) REDUCED THE GROSS PROFIT RATIO FROM 11.59% TO 7.5%. THE REVENUE IS AG GRIEVED WHEREAS THE ASSESSEE HAS ACCEPTED THE CIT(A) ORDER. 3. WE HAVE HEARD THE LD. DR AND THE LD. COUNSEL AND EXAMINED THE RECORD. THERE IS NOTHING PROVIDED ON RECORD TO COUNTER THE FACTUAL FINDINGS GIVEN BY THE CIT(A) EXTRACTED ABOVE. IT SEEMS THE A.O HAS NOT CO NSIDERED THE ASSESSEES VALID EXPLANATION WHY THE GP HAS FALLEN DURING THE YEAR I.E. DUE TO INCREASE IN COST OF DIESEL PETROL STEEL AND CEMENT ETC. THE C IT(A) HAS RIGHTLY CONSIDERED THE EXPLANATION OF THE ASSESSEE AND REDUCED THE GP TO 7.5% WHILE REJECTING THE BOOKS OF ACCOUNT. WE DO NOT SEE ANY REASON TO INTER FERE WITH THE ORDERS OF THE CIT(A). ACCORDINGLY WE REJECT THE REVENUES GROUNDS . 4. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER 2010. SD/- SD/- (I.C. SUDHIR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 29 TH OCTOBER 2010 R ITA NO. 1529/PN/2007 A.Y 2004-05 3 COPY TO: 1. ITO WARD-2 SATARA 2. THE ASSESSEE 3. THE CIT(A)-III PUNE 4. THE CIT-III PUNE 5. THE DR B BENCH ITAT PUNE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT PUNE BENCHES PUNE