Rajendra Menon) (C v. Sirpurkar

R.P. No.587/2014 18/12/2014. Shri Sanjay Lal, learned counsel for thepetitioner. Seeking review/ recall of an orderpassed on 19.3.2014 in ITA No.13/2014dismissing an appeal filed by the Revenue, thisapplication has been filed. The grounds raised in this reviewpetition is that when the matter was taken upbefore the Hon'ble Supreme Court in SLP, thesame was withdrawn with liberty to file a reviewapplication. Referring to the averments made inpara 6 of the application for review it is tried tobe emphasized that in the absence of there beingproper verification and proof with regard toconfirmation of creditors and identity of thepersons in connection with labour expenses andevidence being recorded, the matter has beendecided and, therefore, there is an errorapparent on the face of record. Intheassessmentproceedingsoriginally held even though the Assessing Officerdisallowed the benefit of labour expenses andcertain amount received from the Creditors butwhile considering the matter both the AppellateAuthorities namely have found that indisallowing the aforesaid amount, the Assessing Officer has not taken note of all these factors. Itwas found that in the proceedings held, theAssessee has produced the payments made to thelabourers and confirmation from all of them.Complete postal address of all the 876 labourcreditors were produced along with postaladdress of 21 parties which include 8 parties forwhom outs`tanding labour assessment weremade. Inspite of all these materials beingavailable, the impugned action was taken. TheAppellate Authority has gone into all thesequestions and it was found that the totalexpenditure in this regard claimed by theAssessee cannot be treated as bogus asconfirmation with receipt to all the persons werefiled and therefore, it was held as under :- “Another fact worth mentioning is thatduring the assessment proceedings theassessee produced 13 creditors forexamination out of which the statementsof 8 persons were recorded. Out ofthese persons, 5 persons admitted doingthe work and received the payments.One person namely Shri Alimuddin,admitted doing the work but disputedthe correctness of payment. One person,Shri Jeetendra, stated that he left the R.P. No.587/2014 work in 2007 and did not receivepayment for the subsequent period. Thetotality of facts indicate that the totalexpenditure, claimed by the assessee,cannot be treated as bogus but at thesame time, it is also an admitted positionthat confirmation with respect to allpersons were not filed or filed for someof the persons. In view of these facts,the provisions of Section 145(3) clearlyattracts that too in the absence ofcorrectness and completeness of labourexpenses. The only option remainedwith the authorities is estimation. If theadditionofRs.3,34,16,321/-isconsidered to be correct then the netprofit comes to 17.8% which ispractically may not be possible. Thelearned CIT (A) has already discussed(page 10) some of the cases like CIT Vs.Prabhat Kumar, M/s SurendraprasadNair and the decision of the Tribunalwhere application of rate of 12% wasfound to be appropriate. In the presentappeal, since the gross receipts aremore than the prescribed limit containedin section 44 AD of the Act, therefore, R.P. No.587/2014 R.P. No.587/2014 we are refraining ourselves to deal withthe issue under the light of Section44AD. Admittedly, the account of theassessee is not maintained in a requiredmanner as the addresses of the labourswere neither complete nor confirmationsfrom all such persons were filed by theassessee at any stage. Therefore, we areof the considered opinion that thelearned CIT(A) under the facts availableon record, is quite justified in applyingnet profit rate of 10% of the contractreceipts resulting into addition ofRs.67,64,515/- to the returned income ofthe assessee, consequently, we affirmthe same. 5.Now we shall take up the appeal ofthe assessee (ITA No. 186/Ind/2012)wherein maintaining the addition ofRs.67,64,515/- has been challenged.Since we have upheld the stand of thelearned CIT(A) in maintaining theimpugned addition challenged by theassessee, therefore, this appeal of theassessee is automatically adjudicated.The appeal of the assessee is having nomerit, therefore, dismissed.” mrs.mishra R.P. No.587/2014 In the light of the aforesaid specificfinding recorded by the Appellate Tribunal, wesee no error in the order passed warrantingreconsideration. Accordingly, this review petition isdismissed. (Rajendra Menon) (C. V. Sirpurkar) Judge Judge