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TMI Blog2019 (4) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted by assessee submitted that appellant is a Development Authority which work for execution of social welfare housing schemes of State Government, therefore earning profit cannot be applied that the a civil contractor - HELD THAT:- In the present case the assessing officer has mechanically applied @ 8% treating the assessee as a civil contractor without looking into fact that the assessee has also been carrying out social welfare schemes for EWS under aegis of the government of M.P. Therefore, the profit rate as applied by the assessing officer and confirmed by the Ld. CIT(A) cannot be sustained. Looking to the facts of the case and the fact that assessee is also carrying out Social Welfare Schemes. We restrict this profit @ 4%. - Decided partly in favour of assessee. Claim of set off brought forward losses of previous years - HELD THAT:- We find that before the ld. CIT(A) this ground was raised by the assessee, however no finding is given by the ld. CIT(A). Therefore, considering the facts, we deem it proper to restore ground No.2 & 6 to the file of the ld. CIT(A) for decision a afresh. Ld. CIT(A) is hereby directed to decide this issue in accordance with law. - ITA No.97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure debited could not be ascertained. Your petitioner submits that the accounts were Audited and Tax Audit was conducted and the same was submitted with the Income tax Return filed by the Appellant. 6. That looking to the facts and circumstances of the case the learned Commissioner of Income tax (A) has erred in not considering the brought forward losses position as per the records which was to be set-off against the current years income and have not given any finding on this matter. 7. That looking to the facts and circumstances of the case the ld. Commissioner of Income Tax (A) has erred in initiating the penalty proceedings u/s 271(1)(c) of the Income Tax Act when there was neither concealment nor furnishing of the inaccurate particulars of income. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as the Act ) was framed vide order dated 25.02.2013. The assessing officer while framing assessment issued a show cause notice calling upon the assessee to explain ledger entries of the expenditure under the budget 20(3), 20(9), 20(8), 25(12),25(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are implemented by this authority. 2. Bhopal Vikas Pradhikaran, Bhopal is a Statutory Authority constituted vide notification No. 3344/32176 dated 15.09.1976 under section 38 of M.P. Nagar Tatha Gram Nivesh Adhiniyam, 1973 by Govt. of M.P. as an apex body for planning and co-ordination of deve1cpment activities in Madhya Pradesh comprising of Bhopal and its influence area with responsibilities as specified in section 49 of M.P. Nagar Tatha Gram Nivesh Adhiniya. In fulfilling the above needs the Pradhikaran Construct Houses, Flats, Commercial and Cultural premises, develop plots and sell the properties (Kindly peruse page No.1 to 7 of our paper book.). The decisions are made as per Delegation of powers. The channel for decision making process are as follows in descending order: - I. State Government 2. Board of Directors 3. The Chairman 4. Chief Executive Officer 5. Superintending Engineer, Chief Town Planner. 6. Executive Engineer, Officer of Special Duty, Account Officer etc. 4. Thus, the whole objective of establishing the Bhopal Vikas Pradhikaran is to promote the infrastructure development and improving the quality of life of peopl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax Act. Further, the case was attended from time to time (Kindly peruse Page no. 55 to 58 of our Paper book). Grounds of Appeal Ground No.1 This ground in appeal is against the Learned CIT (Appeals) upholding that the appellant is following Mercantile system of Accounting which is not correct. The Appellant is regularly following the Cash system of accounting in the past years as well as in the above subject year which have also been confirmed by the Statutory Auditor in is Tax Audit Report. Kindly peruse Page No.35 of our Paper book which stated the said fact. The direction may be given by the Honourable members of the said fact. Ground No.2 This ground in appeal is against the Learned CIT (Appeals) not given any finding and have upheld the order of the learned Assessing Officer and not considering the position of the return filed by the Appellant disclosing the deficit at ₹ 5,53,41,624/- as well as the correct position of brought forward losses of the earlier years as per Page no. 59 of Paper book. That the learned CIT (Appeals) has overlooked our returned position which was on the basis of Audited Accounts and the Tax Audit Report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note and submit that the authority has a local resident audit from the M.P. Local fund audit, by whom vouchers are vouched on day to day basis and after which they are entered in the manual books of accounts. We would also like to submit that the appellant's cases for the past and subsequent years were under scrutiny and the orders were passed uls 143(3). The copies of assessment order relevant to AY 2008-09, 2009-10, ~011-12 and 2012-13 are enclosed at Page no. 13 to 20 of our Paper book from which you will kindly peruse that the returned position have been accepted by the department in each of the above years. From the above position and clarification your honour will appreciate that there is no allegation or assertion either that the accounts are materially misstated or expenses were not supported with evidence and income is not recorded as per the system followed. The discrepancies or clerical mistake which were identified during the course of audit/computerization of accounts were rectified and consequently no discrepancy had remained in the Audited Accounts, so as to be said to have any material impact on the final result in the position of accounts. The cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly believes to be a fair estimate of the proper figure of assessment and for this purpose he may take into consideration assessee's circumstances, his past history, his own knowledge of the previous returns and the assessments of the assessee and all other matter which he thinks would assist him in arriving at a fair and proper estimate. However, in the current case, the Ld. AO in determining the income of the appellant applied the rate of profit at 8% of the Gross Receipts. Being a Government Development Authority, it cannot be taken at par with other construction firms or business organization that are said to be commercial profit making concerns. The learned Assessing officer has not given any comparable case for taking 8% profit for such type of authorities. 8. On the contrary, ld. Departmental Representative (DR) supported the order of the authorities below and submitted that the assessing officer has pointed out specific defects in the books of account, therefore, the assessing officer was justified in rejecting the books of account. 9. We have heard the rival submissions and perused the material available on records and gone through the orders of the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts, he is required to estimate profit while estimating the profit, the assessing officer is not only made the estimation on the basis of material available but also examine the surrounding facts. In the present case the assessing officer has mechanically applied @ 8% treating the assessee as a civil contractor without looking into fact that the assessee has also been carrying out social welfare schemes for EWS under aegis of the government of M.P. Therefore, the profit rate as applied by the assessing officer and confirmed by the Ld. CIT(A) cannot be sustained. Looking to the facts of the case and the fact that assessee is also carrying out Social Welfare Schemes. We restrict this profit @ 4%. This ground of the assessee s appeal is partly allowed as indicated hereinabove. 13. Ground No.2 6 are inter connected and are related to claim of set off brought forward losses of previous years. 14. Ld. counsel for the assessee submitted that Ld. CIT(A) has not decided this issue despite the fact that a specific ground was raised. 15. Ld. Departmental Representative (DR) opposed the submissions. 16. We have heard the rival submissions and perused the material available on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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