M/s. Edco India P. Ltd, Hyd, Hyderabad V. DCIT, Circle -2(2), Hyderabad

ITA 1058/HYD/2011

• Counselvise Citation: 105822514 RSA 2011
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M JAGADISH BABU
• Assessee Lawyers: P MURALI MOHAN RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.1058/HYD/2011 : ASS ESSMENT YEAR 2007-08 M/S. EDCO INDIA (P) LTD., HYDERABAD (PAN AAACE 9548 H) V/S. DY. COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), HYDERABAD (APP E L L ANT) (RESPONDENT) APPELLANT BY : SHRI P.MURALI MOHAN RAO RESPONDENT BY : SHRI M.JAGADISH BABU DATE OF HEARING 12.9.2011 DATE OF PRONOUNCEMENT 14.10.2011 O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2007-08 IS DIRECTED AGAINST THE ORDER OF THE CIT(A) . 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GROUNDS OF APPEAL RELATING TO THE REJECTION OF BOOK S OF ACCOUNT AND ESTIMATION OF THE INCOME OF THE ASSESSEE BY APPLYIN G A FLAT RATE OF 8% ON THE GROSS RECEIPTS, ARE NOT PRESSED BY THE ASSES SEE, AND HENCE ESTIMATION OF ASSESSEES INCOME BY APPLYING A FLAT RATE OF 8% ON THE GROSS RECEIPTS MAY BE UPHELD. IT IS HOWEVER, SUBMI TTED THAT ONCE A FLAT RATE OF NET PROFIT IS APPLIED TO THE GROSS RE CEIPTS OF THE ASSESSEE, NO FURTHER DISALLOWANCE UNDER S.40(A)(IA) OR S.40A( 3) COULD BE MADE. HE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR O F THE ASSESSEE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF INDWELL CONSTRUCTIONS V/S. CIT( (232 ITR 776)-AP, W HEREIN IT WAS ITA NO.1058/HYD/2011 M/S. EDO INDIA (P) LTD., HYDERABA D 2 HELD THAT ACCOUNT BOOKS HAVING BEEN REJECTED, THE R EVENUE COULD NOT RELY ON THE SAME BOOKS OF ACCOUNT FOR ADDITION OF EXPENDITURE SHOWN IN THE PROFIT & LOSS ACCOUNT. THE LEARNED DEPARTME NTAL REPRESENTATIVE COULD NOT CONTROVERT THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VIEW OF THE SUBMISSION MADE BY THE LEARNED COUNSEL FOR THE ASSE SSEE, WE UPHOLD THE ACTION OF THE DEPARTMENT IN REJECTING THE BOOKS OF ACCOUNT AND APPLICATION OF FLAT RATE OF 8% ON GROSS RECEIPTS FO R ESTIMATING THE INCOME OF THE ASSESSEE. HOWEVER, IN VIEW OF THE DE CISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF I NDWELL CONSTRUCTIONS V/S. CIT (SUPRA), WE DIRECT THAT NO FURTHER ADDITI ON/DISALLOWANCE COULD MADE ON THE BASIS OF THE VERY SAME BOOKS OF A CCOUNT, WHICH HAVE BEEN REJECTED BY THE REVENUE. WE DIRECT ACCORD INGLY AND CONSEQUENTLY, GROUNDS OF THE ASSESSEE IN THIS APPEA L ARE PARTLY ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE COURT ON 14.1 0.2011 SD/- SD/- (A KBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 14 TH OCTOBER, 2011 COPY FORWARDED TO: 1. M/S. EDCO INDIA (P) LTD., C/O. M/S. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, I FLOOR, SOMAJIGUDA, HYDE RABAD 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE 2(2), HY DERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) VIJAYAWADA ITA NO.1058/HYD/2011 M/S. EDO INDIA (P) LTD., HYDERABA D 3 4. COMMISSIONER OF INCOME - TAX II HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S