M/s. Gayatri Constructions, Nellore V. ITO, Ward-3, Nellore

CO 48/HYD/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 6873 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CH SURYANARAYANA RAO
• Assessee Lawyers: B V PRASAD REDDY
• Keywords: Depreciation; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER. ITA NO.1090/HYD/2011 AND CROSS OBJECTION NO.48/HYD/2011 : ASSESSMENT YEAR 2007-08 INCOME-TAX OFFICER, WARD-3, NELLORE. V/S. M/S. GAYATRI CONSTRUCTIONS, NELLORE. ( PAN- AABFG 9857 C ) (APPELLANT) (RESPONDENT /CROSS - OBJECTOR ) APPELLANT BY : SHRI B.V.PRASAD REDDY RESPONDENT BY : SHRI CH.SURYANARAYANA RAO DATE OF HEARING 17. 1.2012 DATE OF PRONOUNCEMENT 17.1.2012 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), GUNTUR DATED 27.4.2011, FOR THE ASSESSMENT YEAR 200 7-08, WHEREBY THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER INTER-ALI A TO RECOMPUTE THE TOTAL INCOME OF THE ASSESSEE AFTER ALLOWING REMUNERATION TO WORKING PARTNERS, INTEREST ON CAPITALS OF THE PARTNERS AND ALSO DEPRE CIATION. THE CROSS- OBJECTION OF THE ASSESSEE QUESTIONS THE VALIDITY OF THE APPEAL FILED BY THE REVENUE ON THE GROUND THAT THE TAX EFFECT INVOLVED IS LESS THAN THE MONETARY LIMIT FIXED BY THE CBDT VIDE INSTRUCTION N O.3/2011 (F.NO.279/MISC.142/2007-ITJ) DATED 09.02.2011. 2. WE HEARD BOTH THE PARTIES. IN THIS CASE, THE A SSESSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE, WHO IS ENGAGE D IN THE BUSINESS OF EXECUTING CONTRACT WORKS FOR VARIOUS DEPARTMENTS, A T 8% OF THE GROSS RECEIPTS OF RS.1,25,30,053, WHICH RESULTED IN ESTIM ATING THE INCOME OF THE ITA NO.1090/HYD/2011 & CO 48/HYD/ 2011 M/S.GAYATRI CONSTRUCTIONS, NELLORE. 2 ASSESSEE AT RS.10,02,404. ON APPEAL, THE CIT(A), A FTER CONSIDERING THE ARGUMENTS OF THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, CONFIRMED THE ESTIMATION OF INCOME OF THE ASSESSEE AT 8%. HOWEVER, HE DIRECTED THE ASSESSING OFFICER TO ALLOW INTEREST AN D REMUNERATION PAID TO PARTNERS AND ALSO DEPRECIATION. IN OUR OPINION, THE ASSESSEE IS ENTITLED FOR DEDUCTION TOWARDS INTEREST AND REMUNERATION PAID TO THE PARTNERS. HOWEVER, THE SAME CANNOT BE SAID WITH REGARD TO DEP RECIATION, SINCE WHILE ESTIMATING THE INCOME OF AN ASSESSEE, ALL DEDUCTION S AVAILABLE TO AN ASSESSEE UNDER THE PROVISIONS OF S.30 TO 38 OF THE ACT FOR THE PURPOSES OF DETERMINING THE INCOME OF AN ASSESSEE, INCLUDING DE PRECIATION UNDER S.32, ARE DEEMED TO HAVE BEEN ALREADY ALLOWED. IN THIS V IEW OF THE MATTER, NO FURTHER DEDUCTION UNDER S.32 OF THE ACT TOWARDS DEP RECIATION SHALL BE ALLOWED AGAIN. WE ARE SUPPORTED IN THIS BEHALF, B Y THE ANALOGOUS THE PROVISIONS OF S.44AD, 44AE AND 44AF INCOME-TAX ACT. FURTHER, WE MAKE IT CLEAR THAT WHILE COMPUTING THE INCOME IN THE ABOVE MANNER AND AS DIRECTED BY THE), IF THE INCOME ESTIMATED FALLS BELOW THE R ETURNED INCOME, THE ASSESSING OFFICER SHALL ACCEPT THE RETURNED INCOME ONLY AND COMPLETE THE ASSESSMENT THEREON, AND NOT ON ANY INCOME LESSER TH AN THE RETURNED INCOME. 3. NOW TURNING TO THE CROSS-OBJECTION OF THE ASSES SEE, IN VIEW OF OUR DECISION ON THE LEGAL ISSUE INVOLVED IN THE REVENUE S APPEAL, WE FIND NO MERIT IN THE CROSS-OBJECTION OF THE ASSESSEE, WHICH IS DISMISSED AS INFRUCTUOUS. 4. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED AND THE CROSS- OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 17.1.2012 SD/- SD/- (ASHA VIJAYARAGHAVAN) (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DATED 17TH JANUARY, 2012 ITA NO.1090/HYD/2011 & CO 48/HYD/ 2011 M/S.GAYATRI CONSTRUCTIONS, NELLORE. 3 COPY FORWARDED TO: 1. M/S. GAYATRI CONSTRUCTIONS, C/O. CH. SURYANARAYANA RAO, CA, 27-01-1601, BALAJI NAGAR, NELLORE 524 002. 2. INCOME - TAX OFFICER, WARD 3 , NELLORE. 3. COMMISSIONER OF INCOME - TAX(APPEALS) , GUNTUR. 4. COMMISSIONER OF INCOME - TAX, GUNTUR 5. THE D.R., ITAT, HYDERABAD. B.V.S