KRR Infra Projects Private Limited, Hyderabad V. Dy. Commissioner of Income Tax , Circle-2(1), Hyderabad

ITA 105/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8054 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 01-06-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 11-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK KARDAM
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Business income; TDS; FORM 26AS
• Section: 40(a)(ia); 201; 13; 6; 12; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L . P . SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO S . 105 & 106 /HYD/20 18 (ASSESSMENT YEAR S : 20 12 - 13 & 2013 - 14 ) M/S. KRR INFRA PROJECTS PVT. LTD., HYDERABAD. PAN AADCK 8254A ..APPELLANT. VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 2(1), HYDERABAD. ..RESPONDENT. APPELLANT BY : SHRI P. MURALI MOHANA RAO . RESPONDENT BY : SHRI ASHOK KARDAM. (D.R.) DATE OF HEARING : 01.06. 2021. DATE OF PRONOUNCEMENT : 23 .0 8 .2021. O R D E R PER SHRI S.S. GODARA, J.M. : TH E S E TWO ASSESSEES APPEAL S FOR ASST. YEAR 201 2 - 13 & 2013 - 14 ARISE OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 12, HYDERABAD S SEPARATE ORDER S; BOTH DT. 08.09.2017 , PASSED IN CASE NO S . 0037/2016 - 17 & 0044/2016 - 17 IN PROCEEDINGS UNDER SECTION 14 4 OF INCOME TAX ACT, 1961 (THE ACT) , RESPECTIVELY . 2 ITA NO S . 105 & 106/HYD/2018 HEARD BOTH THE PARTIES . C ASE FILE S PERUSED. 2. WE NOTICE AT THE OUTSET THAT THE ASSESSEE'S IDENTICAL SUBSTANTIVE GROUNDS RAISED IN BOTH THESE APPEALS CHALLENGE CORRECTNESS OF LOWER AUTHORITIES ACTION INTER ALIA ESTIMATING 9% PROFIT ELEMENT O N GROSS RECEIPTS OF RS.571,73,84,001 AND RS.192,42,57,336; SECTION 40 ( A ) (IA) DISALLOWANCE ON ACCOUNT OF NON - DEDUCTION OF TDS OF RS.410,84,69,323 AND 10,70,60,166 FOLLOWED BY TREATMENT OF INTEREST INCOME OF RS.96,98,339 AS INCOME FROM OTHER SOURCES THAN BUSINESS INCOME IN ASSESSMENT YEAR 2012 - 13 AND DIFFERENCE IN FORM 26AS OF RS.4,43,17,395 IN ASSESSMENT YEAR 2013 - 14; RESPECTIVELY. 3. THE ASSESSEE'S FIRST AND F OREMOST ARGUMENT BEFORE US IS THAT BOTH THE LOWER AUTHORITIES' HAVE ERRED IN LAW AND ON FACTS IN ESTIMATING 9% INCOME ELEMENT PERTAINING TO ITS CONTRACT RECEIPTS WITHOUT EVEN REJECTING THE BOOKS OF ACCOUNTS. LEARNED COUNSEL FAILS TO DISPUTE THAT THIS IN STANT ASSESSMENTS INVOLVE SECTION 144 BEST JUDGMENT PROCEEDINGS WHEREIN THE ASSESSEE HAD FAILED EVEN TO 3 ITA NO S . 105 & 106/HYD/2018 PRODUCE AND SUBSTANTIATE THE CORRESPONDING EXPENDITURE BY PLACING THE NECESSARY VOUCHERS BEFORE THE AUTHORITIES. WE THUS DECLINE THE ASSESSEE'S FOREG OING ARGUMENT. 4. NEXT ISSUE IN BOTH THESE APPEALS IS THAT OF CORRECTNESS OF INCOME ESTIMATION @ 9% PROFIT ELEMENT ON CONTRACT WORKS AS AGAINST 8% CLAIMED AT ASSESSEE'S BEHEST . IT FAILS TO DISPUTE THE HONBLE JURISDICTIONAL HIGH COURT S RECENT D ECISION IN ITA NOS.40 & 41/2020 DCIT VS. MAC ENGINEERING AND VICE VERSA DT.24.2.2021 HAS UPHELD THE TRIBUNAL DIRECTION (S) TO THE ASSESSING OFFICER FOR ADOPTING PROFIT E STIMATION @ 9% AND 6% QUA CONTRACT AND SUB - CONTRACT RECEIPTS; RESPECTIVELY. WE, THERE FORE DECLINE THE ASSESSEE'S INSTANT SECOND ARGUMENT AS WELL . 5. LEARNED COUNSELS LAST CONTENTION AS PER THE ASSESSEE'S DETAILED PAPER BOOK RUNNING INTO 126 PAGES FOR ASSESSMENT YEAR 2012 - 13 AND 286 PAGES FOR ASSESSMENT YEAR 2013 - 14 IS THAT BOTH THESE IMPUGNED ASSESSMENT YEARS INVOLVES THE ASSESSEE SUB - CONTRACTUAL RECEIPTS AS WELL WHICH OUGHT TO HAVE BEEN SU STAINED TO THE CORRESPONDING LATTER ESTIMATION 4 ITA NO S . 105 & 106/HYD/2018 @ 6% ONLY. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT ALL THESE REQUIRES A FRESH FACT UAL VERIFICATION AS WE ARE DEALING WITH 144 BEST JUDGMENT ASSESSMENT. WE THEREFORE RESTORE THE INSTANT ISSUE OF QUANTIFICATION OF CONTRACTUAL AS WELL AS SUB - CONTRACTUAL RECEIPTS IN BOTH THESE ASSESSMENT YEARS BACK TO THE ASSESSING OFFICER FOR NECESSARY FACTUAL VERIFICATION. LEARNED COUNSEL UNDERT AKE S TO FILE ALL THE NECESSARY DOCUMENTS TO THIS EFFECT BEFORE THE ASSESSING OFFICER ; AT ASSESSEE'S RISK AND RESPONSIBILITY . THE SAME SHALL BE FOLLOWED BY THREE EFFECTIVE OPPORTUNITIES OF HEARING S. TH IS FORME R ISSUE OF ESTIMATION OF INCOME ELEMENT IN BOTH THESE ASSESSMENT YEARS IS PARTLY ACCEPTED FOR STATISTICAL PURPOSES IN FOREGOING TERMS. 6. NEXT COMES THE SECOND ISSUE OF 40 ( A ) (IA) DISALLOWANCE IN BOTH THESE ASSESSMENT YEARS UNDER CONSIDERATION. S UFFICE TO SAY, IT HAS COME ON RECORD THAT WE ARE DEALING WITH AN INSTANCE OF ESTIMATION OF INCOME ON GROSS TURNOVER AND THEREFORE, SECTION 40 ( A ) (IA ) WILL NOT APPLY AS HONBLE JURISDICTIONAL HIGH COURTS LANDMARK DECISION IN INDWELL 5 ITA NO S . 105 & 106/HYD/2018 CONSTRUCTION VS. CIT 232 ITR 776 (199 8 ) (A.P.). WE THUS DELETE THE IMPUGNED SECTION 40(A)(IA) DISALLOWANCE. 7. COMING TO THE REMAINING ISSUE OF INCOME FROM OTHER S OURCES AND DIFFERENCE IN FORM 26AS (SUPRA), LEARNED COUNSEL INTER ALIA ARGUED THA T THE SAME REPRESENTS BUSINESS INCOME IN FORMER AND THAT CORRESPONDING TAXABLE INCOME ALREADY STAND ASSESSED; RESPECTIVELY. BE THAT AS IT MAY, BOTH THE INSTANT ISSUES REQUIR E A FRESH FACTUAL VERIFICATION. WE THEREFORE RESTORE THE SAME BACK TO THE ASSESSING OFFICER FOR HIS NECESSARY EXERCISE TO THIS EFFECT. THE ASSESSEE IS DIRECTED TO PLACE ON RECORD ALL NECESSARY DETAILS. 8. BOTH THESE ASSESSEE'S APPEALS ARE PARTLY ALL OWED FOR STATISTICAL PURPOSES. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD AUG. , 2021. SD/ - SD/ - (L .P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 23 .0 8 .2021. * REDDY GP 6 ITA NO S . 105 & 106/HYD/2018 COPY TO : 1. M/S. KRR INFRA PROJECTS (P.) LTD., D.NO.7 - 1 - 54/1, 204, SATYA SAI RESIDENCY, DK ROAD, AMEERPET, HYDERABAD - 500 038 2. DCIT, CIRCLE 2(1), HYDERABAD. 3. PR. C I T (CENTRAL) , HYDERABAD. 4. CIT(APPEALS) - 12, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.