M/s Varalaxmi Constructions, Khammam V. Dy.CIT, Central Circle-3, Hyderabad

CO 37/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6784 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 25-08-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 15-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: P MURALI MOHAN RAO
• Section: 143(3); 153C

Judgement Text

ITA NOS 276 OF 2013 CO 37 O F 2018 AND ITA 2179 OF 2018 VARALAKSHMI CONSTRUCTIONS KHAM MAM PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO.276/HYD/2013 ASSESSMENT YEAR: 2009-10 DY.CIT CENTRAL CIRCLE-3 HYDERABAD VS. M/S. VARALAKSHMI CONSTRUCTIONS, KHAMMAM PAN:AAGFV0744C (APPELLANT) (RESPONDENT) ITA NO.2179/HYD/2018 A.Y 2009-10 M/S. VARALAKSHMI CONSTRUCTIONS, KHAMMAM PAN:AAGFV0744C VS. ACIT, CIRCLE-1 KHAMMAM C.O. NO.37/HYD/2018 (ARISING OUT OF ITA NO.276/HYD/2013) A.Y 2009-10 M/S. VARALAKSHMI CONSTRUCTIONS, KHAMMAM PAN:AAGFV0744C VS. ACIT, CIRCLE-1 KHAMMAM ASSESSEE BY: SRI P. MURALI MOHAN RAO REVENUE BY : SRI Y.V.S.T. SAI, DR DATE OF HEARING: 25/08/2021 DATE OF PRONOUNCEMENT: 08/09/2021 ORDER PER S. S. GODARA, J.M. THIS REVENUES APPEAL IN ITA NO.276/HYD/2013 WITH ASSESSEES CROSS OBJECTION IN C.O NO.37/HYD/2018 AN D LATTERS CROSS APPEAL IN ITA NO.2179/HYD/2018 ARISE AGAINST THE CIT(A) VIJAYAWADAS COMMON ORDER DATED 14.12.2012 PASSED I N APPEAL NO.311/VJA/CIT(A)/VIJA/2011-12 INVOLVING PROCEEDING S U/S 143(3) OF THE INCOME TAX ACT, 1961, IN SHORT THE A CT RESPECTIVELY. ITA NOS 276 OF 2013 CO 37 O F 2018 AND ITA 2179 OF 2018 VARALAKSHMI CONSTRUCTIONS KHAM MAM PAGE 2 OF 5 HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. IT EMERGES AT THE OUTSET THAT THE REVENUES APPE AL ITA NO.276/HYD/2013 RAISES THE FOLLOWING SUBSTANTIVE GR OUNDS: 1. THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOW ANCE OF RS. 3 6,00,000/ - AS AGAINST RS. 73,35,836/- DISALL OWED BY THE AD FOR EXPENSES WITHOUT SUPPORTING VOUCHERS. 2. THE LD.CIT(A) ERRED IN DELETION OF RS.3,85, 00, 000/- REPRESENTING THE CASH WITHDRAWAL. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT EVIDENC E WAS FOUND DURING THE SEARCH WITH REGARDS TO MONEY BEING DRAWN BY THE EMPLOYEE OF M/S. MADHUCON PROJECTS LTD ., WHO HAPPENED TO BE THE PRINCIPAL CONTRACTOR. 4. THUS, LD. CIT(A) ERRED IN HOLDING THAT THE AD HA S FAILED TO PROVE THE DESTINATION OF THE MONEY DRAWN FROM THE BANK WHEN IT IS EVIDENT THAT THE MONEY HAS GONE BACK TO MAIN CONTRACTOR. 5. THE FINDING OF THE LD. CIT(A), THAT ADDITION IS MADE MERELY ON SUSPICIONS IS ERRONEOUS ON FACTS AND CIRCUMSTANCES AS THE ADDITION IS BASED ON FINDING O F SEARCH CONDUCTED AT THE RESIDENCE OF SHRI. RAVIKANT H TRIVEDI, THE EMPLOYEE OF THE MAIN CONTRACTOR I.E. M /S. MADHUCON PROJECTS LTD. AND NOT ON MERE SUSPICIOUS A S HELD BY CIT(A). 6. THE LD. CIT(A) ERRED IN DELETING THE UNEXPLAINED CASH DEPOSIT OF RS.75,00,000/ - WITHOUT GIVING ANY REASO N IN THEIR ORDER. 7. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 3. IT NEXT TRANSPIRES THAT THE ASSESSEES APPEAL IN ITA NO.2179/HYD/2018 AS WELL AS THE C.O NO.37/HYD/2018 SUFFER FROM RESPECTIVE DELAY(S) OF 2076 AND 2016 DAYS ATTRIBUTA BLE TO MISCELLANEOUS REASONS WITH MISPLACEMENT OF CASE FILE AND THE COMM UNICATION GAP IN THE MANAGEMENT. HON'BLE APEX COURTS LANDMARK DECIS ION(S) IN COLLECTOR LAND ACQUISITION, ... VS MST. KATIJI & OR S 1987 SCR (2) 387 AND UNIVERSITY OF DELHI VS. UNION OF INDIA CIVIL AP PEAL NO.9488 AND 9489/2019 DATED 19.12.2019 HOLD THAT CAUSE OF SUBST ANTIVE JUSTICE ITA NOS 276 OF 2013 CO 37 O F 2018 AND ITA 2179 OF 2018 VARALAKSHMI CONSTRUCTIONS KHAM MAM PAGE 3 OF 5 MUST PREVAIL OVER ALL TECHNICAL ASPECTS IN CASE THE LITIGANT IS ABLE TO SUFFICIENTLY EXPLAIN THE DELAY IN EXERCISING THE CO RRESPONDING LEGAL REMEDY(IES). WE THEREFORE, REJECT THE REVENUES VEH EMENT ARGUMENTS CONTESTING THE ASSESSEES AVERMENTS IN THE TWO COND ONATION PETITIONS I.E. BOTH CROSS APPEAL AS WELL AS THE CROSS OBJECTI ON (SUPRA). THE SAME STAND ADMITTED. 4. IT NEXT EMERGES THAT THE ASSESSEES SOLE OF SUBS TANTIVE GROUNDS IN APPEAL ITA 2779/HYD/2018 SEEKS TO REVERS E BOTH THE LOWER AUTHORITIES ACTION DISALLOWING THE EXPENDITURE AMOU NT OF RS.73,35,836/- @ 10% SINCE BOGUS IN NATURE. ITS CRO SS OBJECTION NO.37/HYD/2018, ON THE OTHER HAND, SUPPORT THE CIT (A)S ACTION GRANTING PART RELIEF FORMING SUBJECT MATTER OF ADJU DICATION IN THE REVENUES APPEAL. 5. WE NOTICE WITH THE ABLE ASSISTANCE OF BOTH THE P ARTIES THAT THE REVENUES APPEAL SEEKING TO REVIVE THE CORRESPO NDING ADDITION(S) AMOUNTING TO RS.4,60,00,000/- COMPRISES OF CASH WIT HDRAWALS OF RS.3,85,00,000/- AS WELL AS CASH DEPOSIT OF RS.75,0 0,000/-; DESERVES TO BE DECLINED FOR THE SOLE REASON THAT THE CORRESPOND ING MATERIAL TO THIS EFFECT HAD EMERGED DURING THE COURSE OF SEARCH DATE D 4.2.2011 IN M/S. MADHUCON GROUP. THE ASSESSING OFFICER HAD THEREAFTE R FRAMED ITS IMPUGNED ASSESSMENT ON 27.12.2011. COUPLED WITH THI S, HE ALSO TOOK RECOURSE TO SECTION 153C PROCEEDING TO ADD THE VERY AMOUNT FORMING PART OF RS.6,85,00,000/- AS MONEY ROUTED BACK BY WA Y OF SUB-CONTRACTS IN CONSTRUCTION BUSINESS. AND THAT THIS TRIBUNALS COMMON ORDER IN ASSESSEES APPEAL NO.1842 AND 170 & 171/HYD/2015 AN D REVENUES CROSS APPEALS NO.197 & 198 QUASHED THE SAID SECTION 153C ASSESSMENTS FOR WANT OF A VALID SATISFACTION. MEANI NG THEREBY THAT THE IMPUGNED ADDITION OF THE ABOVE MONEY ROUTED INVOLVI NG M/S. ITA NOS 276 OF 2013 CO 37 O F 2018 AND ITA 2179 OF 2018 VARALAKSHMI CONSTRUCTIONS KHAM MAM PAGE 4 OF 5 MADHUCON GROUP HAS BEEN ALREADY HELD TO BE AN INVAL ID ADDITION UNDER THE SPECIFIC PROVISIONS ENSHRINED IN SECTION 153C O F THE ACT. WE THEREFORE, QUOTE LEGAL MAXIM GENERALIA SPECIALISES NON-DEROGANT AND HOLD THAT THE VERY ADDITION IS NOT LIABLE TO BE SUS TAINED IN SECTION 143(3) PROCEEDINGS FOR THIS PRECISE REASON ALONE. WE ACCOR DINGLY DECLINE REVENUES SOLE SUBSTANTIVE GRIEVANCE AS WELL AS THE MAIN APPEAL IN ITA NO.276/HYD/2013. THE ASSESSEES C.O NO.37/HYD/2018 SUPPORTING THE CIT (A)S ORDER UNDER CHALLENGE STAND RENDERED INFRUCTUOUS THEREFOR. 6. NOW COMES THE ASSESSEES SOLE SUBSTANTIVE GROUND IN ITS APPEAL ITA NO.2179/HYD/2018 SEEKING TO REVERSE THE CIT (A)S ACTION DISALLOWING 10% OF EXPENDITURE; COMING TO RS.73,35, 836/- AND RESTRICTED TO RS.36,00,000/- ON ESTIMATION BASIS UN DER CHALLENGE. IT EMERGES DURING THE COURSE OF HEARING THAT NEITHER T HE ASSESSEE HAS BEEN ABLE TO PROVE THE SAME IN ITS ENTIRETY BY FILI NG ALL COGENT EVIDENCE NOR THERE IS ANY SPECIFIC DEFAULT FOUND IN ITS BOOK S BY EITHER OF THE LOWER AUTHORITIES. FACED WITH THIS FACTUAL POSITION, WE D EEM IT PROPER TO RESTORE THE IMPUGNED DISALLOWANCE TO RS.25,00,000/- ONLY WITH A RIDER THAT THE SAME SHALL NOT BE TREATED AS A PRECEDENT I N ANY OTHER CASE OR ANY PRECEDING OR SUCCEEDING ASSESSMENT YEARS. ORDER ED ACCORDINGLY. NO OTHER GROUND HAS BEEN PRESSED BEFORE US. THE REVEN UES APPEAL ITA 276/HYD/2013 IS DISMISSED. THE ASSESSEES CROSS OBJ ECTION CO NO.37/HYD/2018 IS DISMISSED AS RENDERED INFRUCTUOUS . AND THE LATTERS CROSS APPEAL ITA 2179/HYD/2018 IS PARTLY ALLOWED IN ABOVE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTI VE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH SEPTEMBER,2021. SD/- SD/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER HYDERABAD, DATED 8 TH SEPTEMBER, 2021. VINODAN/SPS ITA NOS 276 OF 2013 CO 37 O F 2018 AND ITA 2179 OF 2018 VARALAKSHMI CONSTRUCTIONS KHAM MAM PAGE 5 OF 5 COPY TO: S.NO ADDRESSES 1 VARA LAKSHMI CONSTRUCTIONS C/O P. MURALI & CO. C.A, 6 - 3 - 655/2/3 SWOMAJIGUDA, HYDERABAD 500082 2 ACIT, CIRCLE-1, KHAMMAM & DY.CIT, CENTRAL CIRCLE, HYDERABAD 3 CIT (A)-VIJAYAWADA 4 CIT - VIJAYAWADA 5 DR, ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER