Mvr Gl Joint Venture, Mumbai vs Assessee

श्री जोगिन्दर स हिं , न्याययक सदस्य, एवुं श्री डी. करुणाकर राव, ऱेखा सदस्य के समक्ष

BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER

आमकय अऩीर सं. / ITA no.5505/Mum./2012 (ननधधायण वषा / Assessment Year : 2009-10)

M/s. MVR GL Joint Venture 304, Gokul Arcade, Subhash Road ................. अऩीरधथी / Vile Parle (E), Mumbai 400 057 Appellant PAN - AAKFM7520P

फनधभ v/s

Income Tax Officer, Ward-15(2)(2) ................... प्रत्मथी / Matru Mandir Grant Road (W), Mumbai Respondent

ननधधारयती की ओय से / Assessee by : Shri N.R. Agarwal यधजस्व की ओय से / Revenue by : Shri Love Kumar

सन ु वधई की तधयीख / आदे श घोषणध की तधयीख / Date of Hearing - 09.04.2015 Date of Order - 20.5.2015

ORDER

डी. करुणाकर राव, ऱेखा सदस्य के द्वारा / PER D. KARUNAKARA RAO, A.M.

The present appeal preferred by the assessee is directed against

the impugned order dated 6th July 2012, passed by the Commissioner

(Appeals)-26, Mumbai, for the assessment year 2009-10. Following

grounds have been raised by the assessee:-

M/s. MVR GL Joint Venture

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"1. The learned CIT(A) has erred in confirming the estimate of the income @ 4% of turnover and which is very excessive on the facts of the case.

2. The learned CIT(A) erred in confirming estimate of the income without rejecting the books of account.

3. The learned CIT(A) erred in not considering the fact that assessee had subcontracted the work to partner of joint holder as per agreement and erred by not considering the fact that both partners of joint venture had paid taxes on the income from joint venture. Thus, resulting in double taxation of same income.

4. The A.O. erred in making addition of ` 61,009 on account of bank interest received."

2. The relevant facts of the case are that the assessee is a joint

venture between G.L. Construction Pvt. Ltd. And MVR. The joint

venture was awarded a contract by MMRD involving the widening of

roads. As per the contract, the entire work has to be sub-contracted to

G.L. Construction Pvt. Ltd. on "back-to-back" basis. The assessee filed

its return of income declaring total income at "nil". The Assessing

Officer, during the scrutiny assessment proceedings, rejected the books

of account and estimated the profits of the assessee applying the flat

rate of 4% of the total receipts. The total receipts are ` 31,77,14,507.

The estimated income is worked out to ` 1,27,08,580. After netting the

above income with the amount returned by it at ` 84,21,362, the

Assessing Officer made addition of ` 42,87,218. The learned CIT(A)

confirmed the same vide his order dated 6th July 2012. Being aggrieved M/s. MVR GL Joint Venture

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by the said order, the assessee is in appeal before us with the grounds

mentioned above.

3. At the outset, the learned Counsel for the assessee brought out

attention to the orders of the Revenue and submitted that the

Assessing Officer has not given adequate and sustainable reasons for

rejection of books of account before resorting to the estimation of the

income applying the flat rate of 4% of the total receipts of the assessee

as income. There are no reasons or justification whatsoever for

adopting 4% mentioned in the order of the Revenue. Further, he also

submitted that the orders of the Revenue do not fall within the

meaning of "speaking orders", therefore, it is the ultimate prayer of the

assessee that the matter needs to be restored to the file of the

Assessing Officer for fresh adjudication. He also submitted that when

the books of account are complete and accurate in all respects, the

decision of the Assessing Officer in rejection of the books of account is

unsustainable in law. He further submitted that revenue model of the

assessee is not well understood and appreciated by the Revenue, the

issue that should be considered in the remand proceedings, if any.

4. On the other hand, the learned Departmental Representative

relied upon the orders of the Assessing Officer and the learned CIT(A) M/s. MVR GL Joint Venture

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and pleaded that the orders should be sustained without any

modification.

5. We have heard both the parties and perused the orders of the

Revenue and the paper book filed before us. It is undisputed fact that

the order of the learned CIT(A) is deficient on the issues relating to the

rejection of the books of account, the issue raised in ground no.1 of

this appeal. Insofar as the adopting the flat rate of 4% of the total

receipts as income of the assessee is concerned, there is no

justification and the orders of the learned CIT(A) / Assessing Officer

have not provided any basis to support the same. In our considered

opinion, there is a need to remand all the issues to the file of the

Assessing Officer for want of issue based adjudication of all the grounds

by passing a speaking order. Accordingly, we set aside the impugned

order passed by the learned CIT(A) and restore all the grounds raised

by the assessee to the file of the Assessing Officer for denovo

adjudication. The Assessing Officer is also directed to take into account

all the available decisions relevant to the issue under consideration and

the same should find place in the said speaking order. Consequently, all

the grounds raised before us are allowed for statistical purposes.

7. ऩरयणधभत् ननधधारयती की अऩीर सधंख्मकीम उद्दे श्म के लरए स्वीकृत की जधती है ।

M/s. MVR GL Joint Venture

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6. In the result, assessee's appeal is allowed for statistical purpose.

Order pronounced in the open Court on 20.05.2015

Sd/- Sd/-

जोगिन्दर स हिं डी. करुणाकर राव न्याययक सदस्य ऱेखा सदस्य JOGINDER SINGH D. KARUNAKARA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER

मुंबई MUMBAI, ददनाुंक DATED: 20.5.2015

आदे श की प्रनतलरपऩ अग्रेपषत / Copy of the order forwarded to:

(1) ननधधारयती / The Assessee;

(2) यधजस्व / The Revenue;

(3) आमकय आमुक्त(अऩीर) / The CIT(A);

(4) आमकय आमुक्त / The CIT, Mumbai City concerned; (5) पवबधगीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / The DR, ITAT, Mumbai; (6) गधर्ा पधईर / Guard file.

सत्मधपऩत प्रनत / True Copy आदे शधनुसधय / By Order प्रदीऩ जे. चौधयी / Pradeep J. Chowdhury वरयष्ठ ननजी सधचव / Sr. Private Secretary उऩ / सहधमक ऩंजीकधय / (Dy./Asstt. Registrar) आमकय अऩीरीम अधधकयण, भुंफई / ITAT, Mumbai