The Commissioner Of Income Tax -Ii, Amritsar v. Vidya Sagar Saini

I.T.A. No. 80 of 2012 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A. No. 80 of 2012 Date of decision: 13.02.2013. The Commissioner of Income Tax -II, Amritsar Vs. Vidya Sagar Saini .... Appellant .... Respondent CORAM:- HON'BLE MR. JUSTICE HEMANT GUPTA.HON'BLE MR. JUSTICE TEJINDER SINGH DHINDSA. Present:Mr. Denesh Goyal, Advocate for the appellant...... HEMANT GUPTA, J. (ORAL) The present petition has been filed under Section 260-A of the1961 Act arises out of an order dated 13.12.2011 passed by the Income TaxAppellate Tribunal, Amritsar Bench, Amritsar (for short 'the Tribunal')pertaining to assessment year 2006-07. Revenue has claimed the followingsubstantial question of law: “Whether on the facts and circumstances of the case, Hon'bleITAT Bench Amritsar was justified in law and on the facts indeciding the case in favour of assessee which is totally againstthe decision of Punjab & Haryana High Court in the case ofM/s Parbhat Contractor, Sirsa, reported in ITR 293 of 2008(323 ITR 675).” The assessee is a civil contractor working primarily for thegovernment department. During the course of assessment for the year inquestion, the learned Assessing Officer rejected the accounts book and framed assessment by applying net profit at rate of 13%. However, thelearned Commissioner of Income Tax (Appeals) has reduced the rate of netprofit to 8%. Such finding has been affirmed by the Tribunal. Learned counsel for the appellant relied upon the judgment ofthis Court reported as Commissioner of Income Tax Vs. Parbhat Kumar 323ITR 675and also a judgment of the Hon'ble Supreme Court reported asKachwala Gems Vs. Joint Commissioner of Income Tax (2007) 288 ITR 10to contend that the net rate of profit applied by the Commissioner of IncomeTax (Appeals) and affirmed by the Tribunal is wholly arbitrary and withoutany justification. Having heard learned counsel for the appellant, we do not findany merit in the argument raised. In Kachwala Gems case (supra), theHon'ble Supreme Court observed that in best judgment assessment there isalways a certain degree of guess work. No doubt, the authorities should tryto make an honest and fair estimate of the income even in a best judgmentand should not act totally arbitrarily, but there is necessarily some amount ofguess work involved in a best judgment assessment and it is assesseehimself who is to blame as he did not submit proper account. In the present case after rejecting the books of accounts, theAssessing Officer assessed the net profit at the rate of 13%, which theCommissioner of Income Tax (Appeals) reduced to 8%. Such rate of profithas been affirmed by the Tribunal. It would be a pure finding of fact thatwhat should be net rate of profit from the work of a civil contract. InParbhat Kumar's case (supra), it was the revenue appeal, which wasdismissed holding that net profit rate in proceedings of best judgment I.T.A. No. 80 of 2012 assessment after rejecting the account books would be question of fact whenthe findings recorded can be proved to be arbitrary and perverse. In theaforesaid case, 12% was applied as net profit rate in the case of civilcontractor. We do not find that applying 8% as net profit rate is so arbitraryor perverse, so as to warrant any interference in the facts of the present case. Consequently, we do not find that any substantial question oflaw arises for consideration in the present appeal. The same is accordinglydismissed. (HEMANT GUPTA)JUDGE February 13, 2013harjeet/Vimal (TEJINDER SINGH DHINDSA)JUDGE