The Commissioner Of Income Tax, Rohtak v. Shri Parveen Kumar Mittal

IN THE HIGH COURT FOR THE STATES OF PUNJAB ANDHARYANA AT CHANDIGARH ITA No.272 of 2011 Date of decision: October 13, 2011. The Commissioner of Income Tax, Rohtak ... Appellant(s) v. Shri Parveen Kumar Mittal ... Respondent(s) CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MR. JUSTICE G.S. SANDHAWALIA Present:Shri Inderpreet Singh, Advocate, for the appellant(s). Hemant Gupta, J. (Oral): The revenue is in appeal under Section 260A of the Indian TaxAct, 1961 (for short the Act) arising out of the order passed by the IncomeTax Appellate Tribunal, Delhi Bench, Delhi, dated 20.1.2011, whereby theorder passed by the Commissioner of Income Tax (Appeals) applying therate of profit @ 12% was set aside and instead rate of profit @ 4% wasadopted. The revenue has claimed following substantial question oflaw:- “1. Whether the ITAT was right in directing to apply net profitrate of 4% on the gross receipts instead of 12% enhanced bylearned CIT(A) from 5% as assessed by Assessing Officer inlight of the fact that assessee failed to produce books of accounts during assessment as well as during both the stages ofappellate proceedings? 2. Whether the ITAT was right in not following the ratio laiddown in the decision of Hon'ble Punjab & Haryana HighCourt in the case of Parbhat kumar, Contractor Sirsa byreducing the N.P. Rate to 4% of gross receipts as againstdown in the decision of Hon'ble Punjab & Haryana HighCourt in the case of Parbhat kumar, Contractor Sirsa byreducing the N.P. Rate to 4% of gross receipts as against 12% decided by learned CIT(A)?” The said questions of law are claimed on the fact that theassessee furnished his return on 31.10.2006 declaring total income ofRs.12,80,189/-. The Assessing Officer served notice under Section 143(2)and 143(1) of the Act and after giving opportunity, framed best judgment-assessment applying net profit for the year at the rate of 5% and madeadditions against the net profit. In appeal, the Commissioner of Income Tax, after serving anotice, applied net profit rate of 12% after relying upon a judgment of thisCourt in Parbhat Kumar's case, in ITA No.293 of 2008 decided on14.11.2008. The assessee further filed an appeal before the ITAT, NewDelhi (for short the Tribunal). The Tribunal considered the net rate of profitfor the last assessment years, i.e., 2003-04 and 2004-05 wherein the incomeof the assessee has been assessed with net profit rate of 6.37% and 2.15%respectively. Considering the said rate of profit accepted by the Departmentin the previous assessment years, i.e., 2003-04 and 2004-05, applied the netprofit at the rate of 4% in view of the rate adopted in the immediatelypreceding assessment year. The sole argument raised by learned counsel for the appellant is that this Court has upheld the rate of 12% as net profit in the case of civil contractor, therefore, there was no reason as to why such rate could beinterfered with by the Tribunal. We do not find any merit in the said argument. The assessee'sreturn for the year 2003-04 was accepted under Section 143(1) of the Actand when assessee has claimed 6.37% as net profit. In the subsequent year,i.e., 2004-05, assessment was completed under Section 143(3) of the Actwith 2.15% as the net profit rate. Keeping in view the profits allowed bythe revenue in the previous two assessment years, the assessment byapplying rate of net profit as 4% is a question of fact. We do not find anysubstantial question of law arising for consideration of this Court. The appeal is dismissed. [ Hemant Gupta ] Judge October 13, 2011.kadyan [ G.S. Sandhawalia ]Judge