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IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "F", MUMBAI
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Before Shri Joginder Singh, Judicial Member
And Shri Sanjay Arora, Accountant Member
ITA NO.6415//MUM/2010 (AY: 2007-08)
The ACIT -25(3) M/s. Umiya Construction
C-11, R.No.308 2B, Gopal Kunj
/
Bandra Kurla Complex, S.N. Road, Kandivali(W)
Vs.
Bandra (E) Mumbai-400 067.
Mumbai.
( /Appellant) (×/Respondent)
P.A. No.AAAFU 1010 A
C.O. No.93/Mum/2013
Arising out of ITA NO.6415//MUM/2010 (AY: 2007-08)
M/s. Umiya Construction The ACIT -25(3)
2B, Gopal Kunj C-11, R.No.308
/
S.N. Road, Kandivali(W) Bandra Kurla Complex,
Vs.
Mumbai-400 067. Bandra (E)
Mumbai.
(Cross Objector) (×/Respondent)
P.A. No.AAAFU 1010 A
/Department by Shri Pawan Kumar Beerla
:
× /Assessee by : None
/ /
Date of Hearing : 24.11.2014 Date of Pronouncement :
26.11.2014
2 ITA NO.6415 & CO 93/MUM/2010 & 13
Umiya Constructi on
/ O R D E R
PER JOGINDER SINGH (JM) :
This appeal by the Revenue is against the order dated
30/06/2010 passed by the ld. CIT(A) for the AY 2007-08. The assessee
has also raised cross objection against the order of the ld. First
Appellate Authority.
2. During hearing nobody represented the assessee inspite of
the fact that on earlier occasion the assessee sought adjournment.
Therefore we have no option but to proceed ex-parte qua the assessee
and tend to dispose of this appeal on the basis of material available on
record. The ld. DR, Shri Pawan Kumar Beerla, strongly defended the
assessment order and advanced his arguments which is identical to the
ground raised.
2.1 We have considered the submissions put forth by the ld. DR
and perused the material available on record. The facts in brief are that
the assessee is a partnership firm engaged in the business of civil
construction declared income of Rs.11,83,740/- in its return filed on
29/10/2007, accompanied by P&L Account, audited statement of
accounts and tax audit report u/s. 44AB of the Act. The assessment was
completed u/s. 143(3) of the Act determining the total income at
Rs.66,07,805/-. During assessment proceedings it was noted by the
3 ITA NO.6415 & CO 93/MUM/2010 & 13
Umiya Constructi on
Assessing Officer that the assessee purchased construction material
from M/s. Vishal Traders and M/s.Piyush Sand Agency. The Assessing
Officer recorded the statement of one Vishal Bipin Chandra Saha,
proprietor of M/s. Vishal Traders on 4/9/2009 and further found that
his father was proprietor of M/s. Piyush Sand Agency. He further noted
that the bills raised by both the parties were written by one persona and
having over- writing adding Umiya Construction. The assessee explained
that the purchases from M/s. Vishal Traders at Rs.2,18,234/- was
already confirmed by the proprietor and there was no reason to disallow
the purchases. Finally, based on the statement, the net profit was
worked out to Rs. 30% determining the income at Rs.66,07,810/- on the
contract receipt of Rs.1,93,14,480/-. On appeal, the ld. Commissioner of
Income tax (Appeals) considered the totality of facts and held that the
profit in any case cannot be more than 19%. The relevant portion from
the impugned order is reproduced hereunder :-
"4.4 I have considered the submissions of the
representative and the stand taken by the A.O. It is
seen from the assessment order that the AO h as
no t g iven jus tif ic ati on f or addi tio n of
Rs .2, 18,234/- r epres en ting purchases from
M/s. Vishal Traders when Mr.Vishal B Shah
appeared before the AO, and confirmed the
supply of material to the appellant in
r e s p ons e to th e s ho wc aus e no ti c e . T he A O
h as no t de al t wi th th i s objection in the
assessment order. He has only dealt with the
objection of the appellant relating to
disallowance of purchases from M/s,Piyush
4 ITA NO.6415 & CO 93/MUM/2010 & 13
Umiya Constructi on
Sand Agency and finally added purchases from
M/s.Padmavati Transport also at the end of the
discussion. As rightly contended by the
representative, statement recorded from son
would not empower the AO to make addition in
respect of purchases from father. The father
was not summoned for examination. Further
as contended by the representative the
appellant filed confirmation of account from
Shri Bipin Popatlal Shah which is not
disputed by the AO. Further it is seen that all
the payments were made by account payee
cheques which were cleared through bank
account Even otherwise with the agreed
addition of Rs.18,56,987/- towards purchase
of steel from M/s.Manju Enterprises, the net
profit of the appellant works out to 19.21%
and even assuming that the books of account
were incorrect or incomplete, the AO could have
only applied section 145 and determined the net
profit at an appropriate rate and when the profit is
already more than 19%, there is no reason for
making further addition. In the circumstances, the
addition in respect of purchases from M/s.Vishal
Traders (Rs.2,18,234), M/s.Piyush Sand Agency
(Rs.11,26,045) and M/s.Padmavati Transport
(Rs.2,78,590) are deleted.
4.4.1 In respect of purchases from M/s.
Annapurna Construction, it is seen from the
reply of the appellant to the showcase notice
issued by the AO that M/s. Annapurna
Construction filed his reply on 25.08.2009 duly
signed by the proprietor which is not disputed by the
AO. The claim of the appellant that Shri Suresh S.
Patel attended personally with the accountant but
the AO did not record his statement is also not
disputed except stating that the appellant did not
produce the proprietor. It is also not in dispute
that a copy of Income-tax return and bank
statement of M/s. Annapurna Construction
was also filed before the A.O. With the above
evidences already filed before the AO, there is no
5 ITA NO.6415 & CO 93/MUM/2010 & 13
Umiya Constructi on
case for addition merely because the appellant did
not produce Mr. Suresh S. Patel but he appeared
on his own alongwth his accountant and there
was change of address. In fact, a copy of bank
statement of M/s. Annapurna Construction was
filed before the A.O. by letter dated 24.08.2009
and it is noticed that the account payee cheques
issued by the appellant were cleared in the
above bank account. In the circumstances,
there is no reason to doubt the purchases from
the above parties. Even otherwise. as already
discussed, with the agreed addition of
Rs.18,56,987/-, the net profit of the appellant
works to more than 19% and there is no
justification for further addition. Even
assuming that the books of account of the
appellant are incomplete or incorrect, the A.O,
could have rejected the books of account and
only es timated the income of the appellant
which could not be in any case more than 19%.In
th e circumstances, the addition of Rs.19,44,212/-
in respect of M/s. Annapurna Construction is
unjustified and the same is deleted."
2.2. If the observation made in the assessment order, conclusion drawn
in the impugned order, material available on record and the assertions
made by the ld. DR, if, kept in juxtaposition and analyzed, we find that
no justification has been mentioned in the assessment order by the
Assessing Officer for making the addition of Rs.2,18,234/-, when Mr.
Vishal B. Shah, in response to showcause notice, confirmed the supply
of material to the assessee. The addition is merely based upon the
statement of the son without examining the father and more specifically
when all the payments were made by account payee cheques. Even
6 ITA NO.6415 & CO 93/MUM/2010 & 13
Umiya Constructi on
otherwise if it is assumed that the books of accounts were
incorrect/incomplete the Assessing Officer was expected to apply section
145 of the Act and determine the net profit at an appropriate rate, thus,
there was no reason for making the further addition. So far as, the
purchases from M/s. Annapurna Construction are concerned, reply
dated 25/8/2009 was filed, duly signed by the proprietor, which is not
controverted by the Revenue . It is also noted that Shri Suresh S. Patel
personally attended the proceedings along with the attendant, but, their
statement was not recorded, wherein, the copy of statement of M/s.
Annapurna Construction and Income tax Return were filed before the
Assessing Officer . In view of this fact, we find no infirmity in the order
of the ld. Commissioner of Income tax (Appeals) and more specifically
when even in the agreed addition of Rs.18,56,987/-, the net profit of the
assessee work out approximately to 19% . We affirm the stand of the ld.
Commissioner of Income tax (Appeals).
The appeal of the Revenue is having no merit, consequently,
dismissed.
3. In the cross objection by the assessee, it has been contended
that the ld. Commissioner of Income tax (Appeals) erred in confirming
the disallowance of purchases of Rs.18,56,987/-. After hearing the
submissions of the ld. DR, and on perusal of record, we note that there
is an agreed addition of Rs.18,56,987/-, vide letter dt. 21/12/2009
7 ITA NO.6415 & CO 93/MUM/2010 & 13
Umiya Constructi on
addressed to the Assessing Officer wherein through para-6 "in the above
circumstances we would like to admit the addition of Rs.18,56,987/- in order
to avoid further litigation and dispute and buy peace. We agree to pay
income tax on the same." The assessee itself mentioned therefore, in the
absence of any contrary material we find no infirmity in the conclusion
of the ld. Commissioner of Income tax (Appeals). In view of the agreed
addition, there is no merit in the cross objection of the assessee .
Finally the appeal of the Revenue and the cross objection of
the assessee are dismissed.
Order pronounced in the open court in the presence of ld. DR at
the conclusion of the hearing on 24/11/2014 .
24.11.2014
Sd/- Sd/-
(Sanjay Arora) (Joginder Singh)
/ ACCOUNTANT MEMBER Û / JUDICIAL MEMBER
Mumbai; Dated : 26th November, 2014.
JV.
\/ Copy of the Order forwarded to :
1. / The Appellant
2. × / The Respondent.
3. () / The CIT, Mumbai.
4. / CIT(A)-13, Mumbai
5. , , / DR,
ITAT, Mumbai
6. [ / Guard file.
/ BY ORDER,
× //True Copy//
/ (Dy./Asstt. Registrar)
/
,
, / ITAT, Mumbai.
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