Case Number: ITA 5923/DEL/2019
Appellant: K B Contractors (Partnership), New Delhi
Respondent: DCIT Circle-62(1), New Delhi
Assessment Year: 2010-11
Result: 2010-11
Case Filed on: 2019-07-08
Order Type: Final Tribunal Order
Date of Order: 2023-03-23
Pronounced on: 2023-03-23
The appeal was filed by K B Contractors against the order dated 16.04.2019 passed for the assessment year 2010-11 by the Commissioner of Income Tax (Appeals)-20, New Delhi (hereinafter referred to as the First Appellate Authority or Ld. F.A.A.). The case originated from the assessment order dated 18.12.2017 under sections 144/148 of the Income Tax Act, 1961, passed by the DCIT, Circle-62(1), New Delhi.
The case was reopened on 30.03.2017 under section 147 of the Act for the following reasons:
During the assessment proceedings, the Authorized Representative of the assessee initially attended and filed the computation of income, copy of profit and loss account, and balance sheet. However, later, no further appearances or written submissions were made. Consequently, invoking the powers of Section 144 of the Act, the contractual receipts of Rs. 11,90,00,448 were subjected to a profit rate of 8% by virtue of Section 44AD, resulting in an addition of Rs. 95,20,035. Further, due to the lack of documentary evidence supporting the interest income of Rs. 6,92,452, this amount was added as income from other sources.
The CIT(A) sustained the additions primarily because the appellant was not maintaining books of accounts. The assessee contended that the CIT(A) should have considered the profit percentage of previous years. However, the CIT(A) noted that in those years, the books of accounts were produced by the assessee.
The assessee raised the following grounds in appeal:
It was submitted that due to disputes among partners and the death of one partner, Shri K.L. Khanna, who maintained the books, there were lapses in contesting before the tax authorities. Affidavits were submitted to support this contention, indicating that the remaining partners had resolved their differences to some extent and appointed representatives to produce the requisite details.
After considering the submissions and records, the bench held that the assessee’s case should not have been discredited solely due to non-maintenance of books. The Ld. CIT(A) should have considered the net profit margins of previous years, which ranged from 1.75% to 2.25%, rather than applying an 8% profit margin.
The tribunal restored the issues to the Ld. AO, allowing the assessee to produce the books of accounts and other relevant submissions for a fresh assessment. The appeal was allowed for statistical purposes, and the issue was remanded to the files of Ld. AO.
Order pronounced in the open court on 23rd March, 2023.
Members:
(N.K.BILLAIYA, ACCOUNTANT MEMBER)
(ANUBHAV SHARMA, JUDICIAL MEMBER)
Copy forwarded to:
ASSISTANT REGISTRAR, ITAT, NEW DELHI
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