IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `F': NEW DELHI
BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND
SHRI B.C. MEENA, ACCOUNTANT MEMBER
Assessment Year : 2009-10
M/s. Prashant Generator Co, Income-tax Officer,
1401, Sector-06, Bahadurgarh. Vs. Ward-3, Rohtak.
Assessment Year : 2009-10
Income-tax Officer, Shri Parshant Saini,
Ward-3, Rohtak. Vs. Shop No.47, 2nd Floor,
Pachim Vihar, Delhi.
PAN : AQCPS6289B
Assessee by : Shri J.P. Pasricha, CA.
Department by : Shri Satpal Singh, Sr. DR.
Date of hearing : 10.12.2012
Date of pronouncement : 10.12.2012
PER JOGINDER SINGH, JUDICIAL MEMBER
The assessee as well as the Revenue are aggrieved by the order dated
16th February, 2012, of the learned First Appellate Authority, Rohtak,
consequently, are in appeal before this Tribunal for Assessment Year 2009-
2 ITA Nos.2109 & 2135/Del/2012
10. The assessee has challenged the application of 30% of profit of the
rental receipts whereas the Revenue supported the adoption of 70% from
2. During hearing of these appeals we have heard Shri I.P. Pasricha,
learned counsel of the assessee and Shri Satpal Singh, learned Sr. DR. Both
sides are aggrieved from adoption of gross profit rate. The crux of
arguments on behalf of the assessee is high rate of adoption i.e. 30% of the
total rental receipts whereas the Revenue is aggrieved in reduction of the
profit from 70% adopted by the learned Assessing Officer.
3. We have considered the rival submissions and perused the material
available on record. Since the issue involved in both the appeals is identical,
the appeals were heard together, therefore, these are being disposed of by
this common order, for the sake of convenience. The facts in brief are that
the assessee Shri Parshant Saini is the proprietor of M/s. Prashant Generator
Company and is engaged in the business of hiring of generators/generator
parts to individuals/other companies. The assessee in the impugned year
declared gross total income of Rs.7,92,228/- and claimed TDS thereupon.
The case of the assessee was taken up for scrutiny. From the assessment
stage itself the assessee claimed that there was a dispute between the
Chartered Accountant and the assessee. To cut short the matter the AO
3 ITA Nos.2109 & 2135/Del/2012
made certain additions/disallowances to the extent of 70% of the rental
receipts ignoring the submissions of the assessee. On appeal, the learned
CIT(A) adopted the estimation of profit at 30% of such gross receipts and
thus partly allowed the appeal. The assessee as well as the Revenue are
aggrieved from such adoption. Before us the learned counsel for the
assessee asserted that for earlier assessment year (2007-08) the assessment
was framed at the profit of 7% of the gross receipts. To substantiate its
claim the learned counsel provided the copy of the assessment order. We
find that vide order dated 24th December, 2009 for A.Y. 2007-08 the
Assessing Officer adopted the net profit @ 7% of the gross receipts of
Rs.1,22,38,911/-. However, the books of accounts in the present assessment
year were rejected by the Assessing Officer being not reliable. Both sides
before us fairly agreed that a reasonable percentage of profit may be
adopted. Keeping in view the past history, material available on record,
rejection of books of accounts, we have no option but to estimate the net
profit as both the authorities have also adopted the net profit rate. Therefore,
we adopt the net profit @ 12% including net of depreciation to which both
parties agreed. We are making it clear that this adoption is applicable to
the peculiar facts of the present assessment year only. Even otherwise, each
4 ITA Nos.2109 & 2135/Del/2012
year is independent. Finally, both the appeals are disposed of in the
4. Consequently both the appeals are partly allowed.
5. This order was pronounced in the Open Court in the presence of the
learned representatives from both sides at the conclusion of the hearing on
10th December, 2012.
( B.C. MEENA) (JOGINDER SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 10th December, 2012.
Copy of the order forwarded to:-
5. DR By Order
*mg Deputy Registrar, ITAT.