Appeal details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 0579 (ITAT-AGRA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 year(s) 9 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
16-05-2019
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
15-03-2013
Assessment Year
2008-2009
Appeal Filed On
23-07-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 363/AGRA/2012 ASSTT. YEAR : 2008-09 M/S. NEM CHAND JAIN CONTRACTORS, VS. A.C.I.T., CIR CLE-5, 112, KOTHI KATRA TEKCHAND, FIROZABAD. ETAWAH.(PAN : AAOFM 9972 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANURAG SINHA, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 15.03.2013 DATE OF PRONOUNCEMENT OF ORDER : 22. 03.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 21.03.2012 FOR THE ASSESSMENT YEAR 2008- 09. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A CIVIL CONTRACTOR FIRM. THE ASSESSEE HAS DISCLOSED TOTAL GROSS RECEIPTS AT RS.2,11,88,564/-. THE ASSESSEE DID NOT MAINTAIN STOCK REGISTER AND NO QUANTITATIVE DETAILS WERE FURNISHED. THE AO PROPOSED TO REJECT THE BOOKS OF ACCOUNT U/S. 145(3) DUE TO NON-MAINTENANCE OF STOCK REGISTER AND PROPER BILLS AND VOUCHERS OF EXP ENSES. THE ASSESSEE IN REPLY BEFORE THE AO SUBMITTED THAT SOME CIT(A) AND ITAT O RDERS ALLOWED INTEREST TO ITA NO. 363/AGRA/2012 2 THIRD PARTY, BUT HAS NOT GIVEN ANY REPLY WHICH REFE RRED TO BILLS AND VOUCHERS AND STOCK REGISTER IF MAINTAINED BY THE ASSESSEE. THE A O, THEREFORE, REJECTED THE BOOK RESULTS AND APPLIED THE PROFIT RATE OF 8% AGAINST T HE GROSS RECEIPTS DISCLOSED BY THE ASSESSEE AND ALSO ALLOWED DEDUCTION U/S. 40(B) AND DEPRECIATION TO THE ASSESSEE AND ACCORDINGLY COMPUTED THE INCOME OF ASSESSEE AT RS.9 ,32,615/-. THE ASSESSEE DID NOT APPEAR BEFORE THE LD. CIT(A) ON ANY DATES OF HE ARING AND DID NOT PRODUCE ANY MATERIAL TO CONTRADICT THE FINDINGS OF THE AO. THER EFORE, THE APPEAL OF THE ASSESSEE WAS DISMISSED. 3. THE LD. COUNSEL FOR THE ASSESSEE MAINLY ARGUED T HAT THE AO SHOULD HAVE ALLOWED DEDUCTION OF FINANCIAL CHARGES/INTEREST PAI D TO THIRD PARTIES EVEN AFTER APPLYING THE PROFIT RATE, DETAILS OF WHICH ARE MENT IONED AT PAGE 14 OF THE PAPER BOOK, WHICH IS PROFIT AND LOSS ACCOUNT OF THE YEAR UNDER CONSIDERATION. HE HAS ALSO SUBMITTED THAT IN PAST, SAME DEDUCTION HAS BEEN ALL OWED. HE HAS ALSO SUBMITTED THAT ADDITIONAL GROUND IS RAISED, WHICH IS RELATING TO THE SAME ISSUE OF DEDUCTION ON FINANCIAL CHARGES PAID TO THIRD PARTIES. ON THE OTH ER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW AND DID NOT FIND ANY JUSTIFICATIO N TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE DID NOT MAINTAI N THE STOCK REGISTER AND ALSO DID ITA NO. 363/AGRA/2012 3 NOT FURNISH THE BILLS AND VOUCHERS OF THE EXPENSES. IN ABSENCE OF ANY RECORD BEFORE THE AO, THE AO WAS JUSTIFIED IN REJECTING THE BOOK RESULTS, WHICH IS NOT IN CHALLENGE BEFORE US. THE ASSESSEE ONLY CLAIMED THA T INTEREST / FINANCIAL CHARGES PAID TO THIRD PARTIES MAY BE ALLOWED AS FURTHER DED UCTION OUT OF INCOME COMPUTED BY THE AO. THUS, THE REJECTION OF BOOKS OF ACCOUNT AND APPLICATION OF PROFIT RATE OF 8% HAS NOT BEEN DISPUTED BY THE ASSESSEE BEFORE THE TRIBUNAL. SINCE THE ISSUE OF DEDUCTION OF FINANCIAL EXPENSES PAID TO THIRD PARTI ES IS ALSO TAKEN IN THE GROUNDS OF APPEAL, THEREFORE, THERE IS NO NEED TO CONSIDER THE ADDITIONAL GROUND OF APPEAL. SAME IS, THEREFORE, REJECTED. IT IS WELL SETTLED LA W THAT WHEN PROFIT RATE IS APPLIED FOR ESTIMATING THE INCOME OF THE ASSESSEE, IT WOULD TAK E CARE OF ALL THE DEDUCTION OF EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT. TH E LD. COUNSEL FOR THE ASSESSEE POINTED OUT FROM THE PROFIT AND LOSS ACCOUNT OF THE YEAR UNDER CONSIDERATION, COPY OF WHICH IS FILED AT PAGE 14 OF THE PAPER BOOK THAT FINANCIAL CHARGES PAID TO VARIOUS BANKS MAY BE CONSIDERED. SINCE THESE EXPENSES ARE P ART OF THE PROFIT AND LOSS ACCOUNT, THEREFORE, WOULD BE COVERED BY THE PROFIT RATE APPLIED BY THE AO FOR COMPUTING THE BUSINESS INCOME OF THE ASSESSEE. SINC E, IT IS A CASE OF A FIRM, THEREFORE, THE AO HAS RIGHTLY ALLOWED THE DEDUCTION U/S. 40(B) AND DEPRECIATION WHILE COMPUTING THE BUSINESS INCOME OF THE ASSESSEE . EACH ASSESSMENT YEAR UNDER IT ACT IS SEPARATE ASSESSMENT YEAR AND PRINCIPLE OF RES JUDICATA WOULD NOT APPLY. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT EXPLAIN AS TO UNDER WHAT CIRCUMSTANCES, INTEREST TO THIRD PARTIES HAVE BEEN ALLOWED IN EARL IER YEARS. THEREFORE, SAID CLAIM OF ITA NO. 363/AGRA/2012 4 THE ASSESSEE CANNOT BE ALLOWED. IN VIEW OF THE ABOV E DISCUSSION, THE APPEAL OF THE ASSESSEE HAS NO MERIT AND IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY
