PCL Intertech Lenhydro Consortium JV, Hyderabad V. Asst. Commissioner of Income Tax, Circle-5(1), Hyderabad

CO 4/Hyd/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6069 (ITAT-HYDERABAD)
• Duration Of Justice: 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 24-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR PANDEY
• Keywords: FORM 26AS
• Section: 143(3); 22

Judgement Text

ITA NOS 579 AND 580 AND CO 4 AND 5 OF 2021 PCL INT ERTECH LENHYDRO PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NOS.579 & 580/HYD/2018 ASSESSMENT YEARS: 2012-13 & 2013-14 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 5(1) HYDERABAD VS. PCL INTERTECH LENHYDRO CONSORTIUM JV, HYDERABAD PAN:AAGFP1664B (APPELLANT) (RESPONDENT) C.O NOS.4 & 5/HYD/2021 (ARISING OUT OF ITA NOS.579 & 580/HYD/2018) ASSESSMENT YEARS: 2012-13 & 2013-14 PCL INTERTECH LENHYDRO CONSORTIUM JV, HYDERABAD PAN:AAGFP1664B VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 5(1) HYDERABAD (APPELLANT) (RESPONDENT) REVENUE BY: SRI SUNIL KUMAR PANDEY, DR ASSESSEE BY : SRI SASHANK DUNDU DATE OF HEARING: 05/04/2021 DATE OF PRONOUNCEMENT: 22/04/2021 ORDER PER SMT. P. MADHAVI DEVI, J.M. THE ABOVE APPEALS ARE FILED BY THE REVENUE FOR THE A.YS 2012-13 AND 2013-14, WHILE THE ASSESSEE HAS FI LED CROSS OBJECTIONS FOR BOTH THE YEARS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY, A JV ENGAGED IN THE BUSINESS OF CIVIL CONTRACTS, FI LED ITS RETURN OF INCOME ELECTRONICALLY FOR THE ABOVE A.YS. DURING TH E ASSESSMENT ITA NOS 579 AND 580 AND CO 4 AND 5 OF 2021 PCL INT ERTECH LENHYDRO PAGE 2 OF 4 PROCEEDINGS U/S 143(3) OF THE ACT, IT WAS NOTICED T HAT THE ASSESSEE WAS AWARDED A CONTRACT BY TEHRI DEVELOPMENT CORPN. LTD TO EXECUTE CIVIL WORKS, DAM SLIP WAY AND POWER HOUSES OF KOTESWARHEP VIDE TENDER NO.THDS/RKSH/CD-197 AND THE MEMBERS OF THE JT. VENTURE WERE PROGRESSIVE CONSTRU CTIONS LTD (50%) HYDERABAD, AND INTERTECH LENHYDRO CONSORTIUM RUSSIA (FOREIGN COMPANY)(50%). THE ASSESSING OFFICER OBSER VED THAT IN THE COMPUTATION OF TOTAL INCOME, THE ASSESSEE HAS D ECLARED GROSS RECEIPTS AND ESTIMATED THE PROFIT THEREON @2%. THE ASSESSEE, VIDE LETTER DATED 9.2.2015, SUBMITTED THAT THE JT.VENTUR E HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. THE ASSESSING OFFI CER OBSERVED CERTAIN DISCREPANCIES IN ANNEXURE TO FORM 3CB. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAS NEITHER MAINTAINED BOOKS OF ACCOUNT NOR PREPARED ANY FINANCIAL STATEME NTS, P&L A/C AND BALANCE SHEET AND THAT THE GROSS RECEIPTS ARE T AKEN FROM FORM 26AS. THEREFORE, THE ASSESSING OFFICER WAS OF THE OPINION THAT IT IS NOT CLEAR AS TO WHICH MEMBER OF THE JT. VENTURE HAS EXECUTED THE WORK AND WHETHER THE WORK HAS REALLY B EEN CARRIED OUT BY THE ASSESSEE AND AS TO HOW THE RECEIPTS ARE RECEIVED AND EXPENDITURE IS INCURRED ETC. OBSERVING THAT THE REC EIPTS ARE STATED TO HAVE BEEN CREDITED BY THDC LTD TO THE A/C OF THE ASSESSEE WHICH IS AUTHENTICATED BY FORM 26AS, HE HELD THAT T HE INCOME FROM THESE RECEIPTS ARE TO BE ASSESSED AS INCOME OF THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE HAS ESTIMATED THE TOT AL INCOME @2% OF GROSS RECEIPTS, BUT SINCE IT WAS NOT CLEAR A S WHO HAS CARRIED OUT THE WORK, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ESTIMATION OF INCOME AT @2% OF THE GROSS RECEIP TS IS TOO LOW. THEREFORE, HE ESTIMATED THE INCOME @6% OF THE GROSS RECEIPTS NET OF ALL EXPENSES. ITA NOS 579 AND 580 AND CO 4 AND 5 OF 2021 PCL INT ERTECH LENHYDRO PAGE 3 OF 4 3. AGGRIEVED BY THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) ,WHO, FOLLOWING HIS OWN O RDER FOR THE A.Y 2011-12, ESTIMATED THE PROFIT AT 3% OF THE GROSS RE CEIPTS. AGAINST THIS ORDER OF THE CIT (A), THE REVENUE IS IN APPEAL BEFORE US WHILE THE ASSESSEE HAS FILED THE CROSS OBJECTION SEEKING A DIRECTION THAT THE INCOME BE ESTIMATED @2% OF THE GROSS RECEIPTS A S DONE IN THE EARLIER A.YS. 4. THE LEARNED DR SUPPORTED THE ASSESSMENT ORDER WH ILE THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON TH E ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR THE A.Y 2009-10 WHE REIN, ITAT HAS DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INCOME OF THE ASSESSEE AT 2% OF THE GROSS RECEIPTS INSTEAD OF 6% CONFIRMED BY THE CIT(A) IN THAT YEAR. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THIS ISSUE HAS BEEN COMING UP BEFORE THE REVENUE AUTHORITIES FROM THE A.Y 2003-04 ONWARDS. I T IS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT IN THESE A.YS I.E. A.Y 2003-04 ONWARDS, THE ASSESSING OFFICE R HAS ESTIMATED THE INCOME OF THE ASSESSEE @2% OF THE GRO SS RECEIPTS. IT WAS ONLY IN A.Y 2009-10 THAT THE ASSESSING OFFICER HAS ESTIMATED THE INCOME @6% OF THE GROSS RECEIPTS AND THIS TRIBU NAL, AFTER CONSIDERING THE ESTIMATES MADE BY THE ASSESSING OFF ICER IN THE EARLIER YEARS, HAD DIRECTED THE ASSESSING OFFICER T O ESTIMATE THE INCOME FOR A.Y 2009-10 ALSO @2% OF THE GROSS RECEIP TS. IT IS ALSO SUBMITTED THAT FOR THE A.Y 2010-11, THE ASSESSING O FFICER, HIMSELF HAD ESTIMATED THE INCOME AT 2% OF THE GROSS RECEIPT S. THE A.YS BEFORE US ARE THE IMMEDIATELY SUBSEQUENT A.YS I.E. 2012-13 AND 2013-14, WE FIND THAT THERE IS NO MATERIAL DIFFEREN CE BETWEEN THE ITA NOS 579 AND 580 AND CO 4 AND 5 OF 2021 PCL INT ERTECH LENHYDRO PAGE 4 OF 4 EARLIER ASSESSMENT YEARS AND THE A.YS BEFORE US, EX CEPT FOR THE ASSESSING OFFICER STATING THAT IN THE ABSENCE OF DETAILS/INFORMATION, IT IS PRESUMED THAT THE JT. VE NTURE ITSELF HAS EXECUTED THE WORK. HOWEVER, WE FIND THAT THE PROJEC T IS A LONG GESTATION PROJECT AND IT CANNOT BE THAT IN SOME YEA RS, ONE OF THE CONSTITUENTS HAS EXECUTED THE PROJECT AND IN OTHER YEARS, THE ASSESSEE JV HAS EXECUTED THE WORK. IN OUR OPINION, THE ASSESSING OFFICER HAS TO VERIFY THE FACT AS TO WHO HAS EXECUT ED THE WORK AND RECOMPUTE THE INCOME IN ACCORDANCE WITH LAW. HE CAN NOT ESTIMATE THE INCOME WITHOUT ANY BASIS. 6. IN THE RESULT, REVENUES APPEALS AS WELL AS THE C.OS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2021. SD/- SD/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 22 ND APRIL, 2021. VINODAN/SPS COPY TO: S.NO ADDRESS ES 1 ACIT/DY.CIT, CIRCLE 5(1), 3 RD FLOOR, D BLOCK, IT TOWERS, HYDERABAD 2 PCL INTERTECH LENHYDRO CONSORTIUM JV, FLAT NO.65A , GROUND FLOOR, RAGHAVA RATNA TOWERS, CHIRAG ALI LANE, ABIDS, HYDER ABAD 3 CIT (A) - 4, HYDERABAD 4 PR. CIT - 4, HYDERABAD 5 DR, ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER