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TAXAP/2494/2009 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 2494 of 2009
=========================================================
COMMISSIONER
OF INCOME TAX-IV - Appellant(s)
Versus
MANIBHAI
& BROTHERS - Opponent(s)
=========================================================
Appearance :
MRS
MAUNA M BHATT for
Appellant(s) : 1,
None for Opponent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 18/04/2011
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE AKIL KURESHI)
Revenue
in this appeal against the judgment and order of the Tribunal dated
08/05/2009 raised following questions for our consideration.
“[A] Whether
the Appellate Tribunal is right in law and on facts in confirming the
order passed by CIT (A) in directing the Assessing Officer to accept
the book result?
[B] Whether
the Appellate Tribunal is right in law and on facts in confirming the
order passed by CIT (A) in ignoring the grounds for bifurcating the
income disclosed by the assessee in two parts., i.e. income from
construction activity and income from the other activities ?
[C] Whether
the Appellate Tribunal is right in law and on facts in confirming the
order passed by CIT (A) in deleting the entire addition by completely
ignoring the valid grounds on which book result were rejected by the
Assessing Officer?”
We
have perused the orders on record with the assistance of learned
Counsel for the revenue. We find that CIT(A) as well as Tribunal
both concurrently found from the evidence on record that the
Assessing Officer had erred in discarding the books of accounts of
the assessee. CIT (A) in this respect held and observed that the
assessee firm at the time of assessment proceeding as well as during
the appellant proceedings had submitted bills justifying maintenance
of complete records. These details were found to be genuine and
expenditure incurred were with respect to various sites which would
vary for valid reasons. CIT (A) also accepted the assessee’s
contention considering that nature and size of the work, the design
and requirement of the customers etc., the requirement of of bricks,
steel, cement etc., would defer. It was pointed out that the
construction for pharmaceutical company cannot be compared with the
construction of a bridge even within the same set of construction.
The requirement may vary from site to site.
The
CIT (A)also observed that the assessing officer was not able to point
out any bill or voucher which was bogus or excessive or was not
incurred for the purpose of business. In view of such observations,
the CIT (A) was pleased to accept the appeal of the assessee and
delete the additions.
The
Tribunal confirmed the view of the CIT (A) making following
observations.
“8.2 As
regards determination of profit from construction activities at 8 %
of Operational Income, we are of the considered view that the learned
CIT (A) was justified in deleting the addition. The assessee has
maintained books of account properly. Furthermore, bills and
vouchers are available and the same had been maintained on consistent
basis and the assessee has been in this line for the last about 40
years. The Assessing Officer has not found out any irregularities,
mistake in the books of accountant. It is relevant to state that
after detailed scrutiny and examination of books of account and
records on the assessee, the Assessing Officer has not pin pointed
any bill or vouchers which in his opinion were bogus, excessive or
has not been incurred for the purpose of business. The books of
account regularly maintained by the assessee were subject to audit
u/s 44AB of the Act. The tax auditors have not given any adverse
comments in the tax audit report. In our view, the learned CIT (A)
has correctly observed that absence of stock register alone cannot be
a reason for rejecting the books of accounts u/s 145 of the Act when
the assessee had got control over the stock and taken inventory on
the last day of the accounting year. Looking into the past history
of the case, we find that the assessee has declared high income and
more gross profit in this year being 16.95% as compared to gross
profit of 16.88 % of the immediately preceding years. Thus,
considering the entire facts and circumstances of the present case,
we are of the view that the learned CIT (A) has correctly observed
that the Assessing Officer was not justified in rejecting the book
results and estimating the profit at 8 % from the construction
activities. In that view of the matter, we hold that there is no
merit in the appeal of the Revenue and accordingly we confirm the
order of the learned CIT (A).”
We
find that the entire issue is factual in nature. CIT (A) and Tribunal
both concurrently found that additions were not justified. CIT (A) &
Tribunal both were of the opinion that Assessing Officer could not
have made the additions in view of the detailed explanation rendered
by the assessee that for different sites there would be peculiar
requirements. Record produced by the assessee was found to be
genuine.
We
do not find any substantial question of law arises. Tax Appeal is
dismissed.
(AKIL
KURESHI, J.)
(SONIA
GOKANI, J.)
sompura
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