Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2016 (9) TMI 1429

06, the turnover of gross contract receipts was ₹ 12102939/- and whereas gross receipts in the year was ₹ 34012026/-. Whereas the gross receipt in the A.Y. 2006-07 was ₹ 46441234/- . ₹ 46114965 is the gross contract receipts for the year 2004-05 and 2005-06, in our view, in fact the gross receipt of 2006-07 was ₹ 46441234/-. Thus, the gross receipts of 2006-07 is matching the gross receipts for the earlier two years. Therefore, to apply the NP rate for the year 2005-06 @ 29.52%, in our view, was not correct and therefore, a rational view is required to be taken estimating the profit of the assessee. The ends of justice would be served if the estimate of profit of the assessee is estimated at 17% subject to depreciation, interest and remuneration to the partners. Thus, the appeal of the assessee is dismissed and appeal of the revenue is partly allowed on this ground. - Disallowing on account of depreciation - use of machinery in the assessment year under consideration - Held that:- AR has failed to point out the bill showing that it was purchased prior to 30/03/2006 and was put to use by the assessee in the year under consideration. Since the assess .....

X X X X X X X

Full Text of the Document

X X X X X X X

ing addition of ₹ 22,55,589/- out of the total addition of ₹ 89,73,464/- made by the ld. AO. The action of ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by accepting the book results and deleting the said addition of ₹ 22,55,589/-. 2. In the facts and circumstances of the case and in law, the ld CIT (A) has erred in confirming the action of the ld. AO in disallowing a sum of ₹ 6,63,750/- on account of depreciation. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the said disallowance of ₹ 6,63,750/-. 3. (a) In the facts and circumstances of the case and in law the ld CIT(A) has erred in confirming the action of the ld AO in exceeding his jurisdiction and further in not following the directions of the Hon ble ITAT while adding a sum of ₹ 16,40,214/-.The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ 16,40,214/-. (b) In the facts and circumstances of the case and in law, the ld .....

X X X X X X X

Full Text of the Document

X X X X X X X

its subsequent order dated 31/05/2011 for A.Y. 2007-08, has estimated the profit @ 11.5% on the turnover of ₹ 16.84 crore. The Hon ble Bench has also considered its order for A.Y. 2006-07, the past history of the assessee and the defects in accounts books of the assessee, pointed out by the A.O. Assessee has claimed that with the increase of turnover, profit rate is decreased. For this very reason, he has challenged the application of profit rate shown in A.Y. 2005-06. Considering the profit rate of 11.5% on turnover of 16.84 crores estimated by Hon ble Tribunal in A.Y. 2007-08, the profit is estimated @ 15% on turnover of 4.62 crores in A.Y. 2006-07. The ground raised by the appellant is partly allowed. 4. Now, the assessee as well as the revenue in appeal before us. The ld. AR of the assessee has submitted that in the A.Y. 2005-06, the assessee worked more on private contract orders, wherein the profit margin is comparatively higher than the government contracts. Due to this reason, the N.P. rate in the A.Y. 2005-06 is higher as compared to the A.Y. 2006-07. Further, in AY 2005-06 assessee s Gross Receipts were almost 1/4th of the Gross Receipts recorded for the year under .....

X X X X X X X

Full Text of the Document

X X X X X X X

fter affording opportunities of being heard to the assessee in this regard. The ld. CIT(A) has relied upon the order of the Tribunal dated 31/5/2011 passed in the assessment year 2007-08 to estimate the profit of the assessee @ 15% on the turnover. In our view, the order dated 30/09/2010, has directed the Assessing Officer to estimate the profit of the assessee keeping in view the past result of the assessee i.e. the results, which are available for the past years and were existing at the time of passing of the order. In our view, the order dated 31/5/2011 was passed by the Tribunal after passing the order dated 30/09/2010, therefore, the same cannot be considered to be past result considering the direction issued by the Tribunal in its earlier order dated 30/09/2010. Having said so, now we have to examine whether the Assessing Officer has rightly estimated the profit @ 29.52% or not? The NP rate of 29.52% were there for the assessment year 2005-06 and 9.89% for the assessment year 2004-05. In our view, the past result will not mean the immediate past result i.e. result for the A.Y. 2005-06 as the said result was available with the Tribunal even at the time of passing of the order .....

X X X X X X X

Full Text of the Document

X X X X X X X

that the Hon ble ITAT Jaipur Bench remanded the matter to the file of the Id. AO with the below mentioned direction ....Since there is contradiction in the date of purchase of the machinery, we remand the matter back to the file of the A.O to decide the issue afresh after verifying the very date of purchase of machine and that when it was ready to use in view of the decision cited by the Id. A.R. after affording opportunity of being heard to the assessee.. Ld. AO at page 4 of his order came up with a specific finding that the date of purchase of machine was 30.03.2006. Thus, it is undisputed that the machine was purchased on 30.03.2006 itself and was available for use within the relevant previous year. It is to be noted that with regard to depreciation of machinery, even the machinery which is available/ready to use and not put to use, will be eligible for claiming depreciation under the Income Tax Act. Hon ble Delhi High Court in the case of National Thermal Power Corpn. Ltd. [2012] 28 taxmann.com 89 (Delhi) (Case Law Page 50), adjudicated the following question of law:- "... Whether on the facts and in the circumstances of the case, the assessee is entitled to depreciation i .....

X X X X X X X

Full Text of the Document

X X X X X X X

31/03/2006. In view thereof, a sum of ₹ 27,00,150/- claimed as depreciation by the assessee, for which, a sum of ₹ 6,63,750/- is disallowed by the Assessing Officer. 12. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A), who had upheld the disallowance by observing as under:- 0.4.3 I have duly considered the submission of the Id. AR and material available on records. Hon'ble Tribunal has nowhere dealt with the issue of addition of unexplained liabilities (wages payable). It has only held that instead of making disallowance of expenses, A.O. should estimate the profit on the basis of past history. Addition of unexplained liability in the balance sheet is not by way of disallowance of expenses and can be made even where the books of accounts are rejected and profit estimated. The assessee has not given any argument/explanation/ evidence on the merit of the issue. He has not proved that the liability shown in the balance sheet is genuine. He has not given the names and addresses of the persons to whom the amount was payable. The addition of unexplained liability is sustained u/s 68 of the Act. Reliance is place .....

X X X X X X X

Full Text of the Document

X X X X X X X

(3), no separate additions can be made on account of unexplained cash credit under s. 68 of the Act of 1961. We are in complete agreement with the view taken by the CIT(A), confirmed by the Tribunal. Thus, no substantial question of law arises for consideration of this Court in this appeal.... He further relied on the following case laws:- (i) Dulla Ram, Labour Contractor, Kotkapura [2014] 42 taxmann.com 349 (Punjab & Haryana) (ii) CIT vs. Dhiraj R Rungta [2013] 40 taxmann.com 284 (Gujarat) (iii) CIT vs. Banwari Lai Banshidhar [1998] 229 ITR 229 (ALL.) (iv) Nardev Kumar Gupta [2013] 142 ITD 303 (Jaipur - Trib.) In view of the above, disallowance made with regard to outstanding expenses may please be deleted as the ld. AO not only exceeded the remand jurisdiction set out by the Hon ble ITAT, but also since the books were rejected by the ld. AO, no disallowance can further be made relying on the same set of books. 14. At the outset, the ld. DR has vehemently supported the order of the ld. CIT(A). 15. We have heard the rival contentions of both the parties and perused the material available on the record. The order dated 30/09/2010 mentioned that the outstanding liabilities of wag .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||