ACIT, Cir-9(1), Hyderabad V. M/s. S. Lalaiah & Co., Nalgonda

ITA 1204/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61924 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 20-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBHASHREE ANANT KRISHNA
• Assessee Lawyers: S RAMA RAO
• Keywords: Depreciation; Assessment record; Capital expenditure
• Section: 40A(3); 143(3); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS.779/HYD/09 & 957/HYD/2011 ASSESSMENT YEAR: 2004-05 S.LALAIAH & CO. V- ADDL. &.ACIT, RANGE-9, NALGONDA. HYD ERABAD. PAN:AAGFS 3141 N ( APPELLANT) ITA NO.1204/HYD/2011 ASSTT. YEAR 2004-05. ACIT, CIR-9(1), HYDERABAD. (APPELLANT) (RESPONDENT) M/S. S. LALAIAH & CO. NALGONDA. PAN: AAGFS 3141 N (RESPONDENT) ASSESSEE BY : SRI S. RAMA RAO DEPARTMENT BY :SMT. SUBHASHREE ANA NT KRISHNA DATE OF HEARING : 16-04-2012 DATE OF PRONOUNCEMENT : 22-06-2012. ORDER PER SAKTIJIT DEY, JM: THESE ARE THREE APPEALS, ITA NO.779/HYD/09 IS BY T HE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT U/S 263 OF THE ACT AND OTHERS ARE CROSS APPEALS DIRECTED AGAINST THE ORDER DATED 31-3-2011 PERTAINING TO THE ASSESSMENT YEARS 2004- 05. FOR THE SAKE OF CONVENIENCE, THESE APPEALS ARE CLUBBED TOGETHER AND DISPOSED OF BY THIS COMBINED ORDER. FI RST LET US ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 2 DEAL WITH ITA NO. 779/HYD/2009 FILED BY THE ASSESSEE FOR ASS T. YEAR A.YR. 2004-05) 2. THE ASSESSEE HAS CHALLENGED THE ORDER U/S 263 BY RAISING AS MANY AS 10 GROUNDS. AT THE OUTSET, WE F IND THAT GROUND NOS. 1 AND 10 ARE GENERAL IN NATURE AND NO ADJUDICATION IS REQUIRED. 3. AT THE TIME OF HEARING, THE LEARNED AR FOR THE ASSESSEE DID NOT PRESS GROUND NO.8. HENCE THE SAME IS DISMI SSED AS NOT PRESSED. 4. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF ORDER PASSED U/S 263 OF THE ACT. FACTS OF THE CA SE, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXECUTING CONTRACT WORK WHICH ARE IN THE NATURE OF EARTH WORK S AND ROAD WORKS. DURING THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING NET P ROFIT OF RS.1,08,84,352/- ON A GROSS RECEIPTS OF RS.15,69,52 ,797. AFTER CLAIMING DEDUCTION TOWARDS, DEPRECIATION, PAY MENT OF SALARY AND INTEREST TO THE PARTNERS, TAXABLE INCOME WAS SHOWN AT RS.50,12,857. IN COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSEE PRODUCED ITS BOOKS OF ACCOUNT, BANK STATEM ENTS, VOUCHERS ETC. AS CALLED UPON BY THE AO. THE AO COM PLETED THE ASSESSMENT U/S 143(3) BY MAKING ADDITION OF A T OTAL AMOUNT OF RS.28,47,221/- WHICH COMPRISED OF THE FOL LOWING HEADS:- I) COMMISSION ON SUB-CONTRACT WORKS RS. 1,01,245 II) METAL RS. 3,73,957 III) LABOUR CHARGES RS.14,61, 479 ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 3 IV) TEMP. STAFF QUARTAERS RS. 7,50,54 0 V) DEDUCTION U/S 40A(3) RS. 1,60,000 --- ---------------- TOTAL INCOME RS.28,4 7,221/- --- ---------------- - 5. THE CIT IN EXERCISE OF HIS POWERS VESTED UNDER S EC. 263 OF THE ACT, CALLED FOR THE ASSESSMENT RECORDS OF TH E ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR AND AFTER EXAMININ G THE SAME AND CONSIDERING THE CONTENTIONS OF THE ASSESSE E, HE WAS OF THE OPINION THAT THE ASSESSMENT ORDER PASSED WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE. HE THEREFORE SET ASIDE THE ASSESSMENT ON THE FOLLOWING ISSUES:- I) THE ASSESSEE HAD PURCHASED DIESEL AND LUBRICANTS FR OM HPCL AND IT WAS STATED BY THE ASSESSEE THAT IT HAD PURCHASED BITUMEN FROM CHENNAI AND VISAKHAPATNAM TOTALLING TO 3412 M. TS., AND WAS TOTALLY UTILISED IN THE ROAD WORK WITHOUT LEAVING ANY CLOSING STOCK. THE ASSESSEE HAD DEBITED TOTAL VALUE OF BITUMEN TO THE PROFIT & LOSS A/C AT RS.4,08,72,992/-. HOWEVER, THE TRANS PORT BILLS REVEALED THAT AS PER BILLS, THE TOTAL QUANTIT Y OF BITUMEN PURCHASED FROM HPCL IS AROUND 1226 MTS AND THE TOTAL VALUE OF THE QUANTITY PURCHASED FROM HPCL WORKED OUT TO RS.1,46,86,485/-IF THE VALUE OF FOUND ENTRIES IS TAKEN AT RS.8.50 LAKHS, THE TOTAL VALUE OF PURCHASES FROM HPCL WORKED OUT TO AROUND RS.1.55 CRORES WHEREAS THE ASSESSEE HAS SHOWN AN OUTSTANDIN G LIABILITY IN THE NAME OF HPCL AT RS.1,61,35,587. SIMILARLY, AGAINST PURCHASES MADE FROM IOC, NO PAYMENTS HAVE BEEN MADE AND THE ENTIRE PURCHASE ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 4 AMOUNT OF RS.38,14,269 HAS BEEN SHOWN AS OUTSTANDIN G LIABILITY. II) CLAIM OF EXPENDITURE ON PURCHASE OF BITUMEN APPEARS TO HAVE BEEN INFLATED WHEN COMPARED TO PURCHASES MADE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. THE ASSESSEE MAINLY EXECUTED ROAD WORKS AND THESE CONTRACTS WERE TAKEN FROM CENTRAL AND STATE GOVERNMENT AUTHORITIES AND ITS TERMS AND CONDITIONS OF CONTRACTS AS PER EARLIER YEARS AND MOST OF THE CONT RACTS HAPPENED TO BE ON- GOING PROJECTS CARRIED OVER FROM THE PRECEDING ASSESSMENT YEAR 2003-04 AND THERE IS NO JUSTIFIABLE REASON FOR SUCH HUGE VARIATION BETWEEN LAST YEARS AND THIS YEAR AND THE SAME WAS NOT EXAMINED B Y THE AO. III) THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.15,80,256/ - FOR QUALITY CONTROL CHARGES CLAIMED TO HAVE BEEN DEDUCTED FROM GROSS BILLS. TDS CERTIFICATE PRODUCE D REVEALS DEDUCTION OF QUALITY CONTROL CHARGES. THE AO HAS ALLOWED DEDUCTION WITHOUT CALLING ANY EVIDENCE IN SUPPORT OF THE SAME. SIMILAR DEDUCTION TOWARDS OTHE R RECOVERIES AND SALES-TAX WITHOUT BRINGING ON RECORD ANY DOCUMENTARY EVIDENCE/PROOF IN SUPPORT OF SUCH CLAIM . IV) AN AMOUNT OF RS.50,62,282/- HAS BEEN DEBITED TO PR OFIT & LOSS A/C TOWARDS SUB-CONTRACT. DURING THE ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED A BREAK-UP ACCORDING TO WHICH AN AMOUNT OF RS.45,36,282/- HAD BEEN DISBURSED TO KRISHNAM RAJU. THOUGH THERE ARE SEVERAL DEBITS STARTING FROM 2-5-2003 AND ENDING ON 31- 3-2004 AND THERE IS ABSOLUTELY NO CREDIT ENTRY. HA D THE SUB-CONTRACTOR I.E., SRI KRISHNAM RAJU EXECUTED ANY WORK, THE VALUE OF SUCH WORK OUGHT TO HAVE BEEN ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 5 CREDITED IN THIS ACCOUNT AND THIS FACT HAS NOT BEEN EXAMINED BY THE AO. V) DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED DETAILS OF WORK-IN-PROGRESS AND AS PER THI S STATEMENT, THE TOTAL WORK-IN-PROGRESS WAS RS.52,05,886/- AND AS AGAINST THIS IN THE BALANCE-S HEET IT WAS DISCLOSED AT A LESSER FIGURE OF RS.51,45,706 /- THEREBY UNDERSTATEMENT OF RS.60,180/- WHICH HAS NO T BEEN BROUGHT TO TAX. 6. THE VALIDITY OF THE ORDER PASSED U/S 263 OF THE ACT HAS TO BE CONSIDERED VIS-A-VIS THE ISSUES ON THE BASIS OF WHICH THE CIT SET ASIDE THE ASSESSMENT ORDER AND WHICH WERE C HALLENGED BY THE ASSESSEE BY RAISING SPECIFIC GROUNDS. WE TH EREFORE PROPOSE TO DEAL WITH THE GROUNDS RAISED BY THE ASSE SSEE ON THE AFORESAID SPECIFIC ISSUES. THE CIT HAS INVOKED HIS JURISDICTION U/S 263 AND SET ASIDE THE ASSESSMENT O N THE GROUND THAT THE AO HAS NOT MADE PROPER ENQUIRY AND HAS PASSED ORDERS WITHOUT APPLICATION OF MIND ON THE SP ECIFIC ISSUES WHICH DISCUSSED IN THE ORDER OF THE CIT. 7. IN GROUND NO.3, THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT DIRECTING THE AO TO RE-EXAMINE THE OUTST ANDING LIABILITY IN THE NAMES OF HPCL AND IOCL. AS IS EVID ENT FROM THE ORDER OF THE CIT IN THE BALANCE-SHEET AN OUTSTANDIN G LIABILITY OF RS.1,61,35,587/- IN THE NAME OF HPCL AND AN AMOUNT OF RS.38,14,269 IN THE NAME OF IOCL WAS SHOWN. THE A SSESSEE EXPLAINED THAT IT HAS PURCHASED BITUMEN AND LUBRICA NTS FROM THE AFORESAID TWO COMPANIES WITHOUT MAKING ANY PAYM ENT DURING THE RELEVANT FINANCIAL YEAR. THE ASSESSEE F URTHER SUBMITTED BEFORE THE CIT THAT THE SAID COMPANIES HA VE ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 6 PROVIDED CREDIT TO THE ASSESSEE LOOKING AT ITS PAST RECORDS. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT THE OUTS TANDING LIABILITY WAS MADE IN THE SUCCEEDING YEAR. WHEN TH E CIT ASKED THE ASSESSEE TO RECONCILE THE FIGURES OF OUTS TANDING LIABILITY APPEARING IN ITS BALANCE-SHEET WITH THE A CCOUNTS OF HPCL AND IOCL AS APPEARING IN THEIR BOOKS, THE ASSE SSEE EXPRESSED ITS INABILITY TO PRODUCE ANY SUCH EVIDENC E. IT IS STANDARD PRACTICE WITH THE PUBLIC SECTOR UNDERTAKIN G LIKE HPCL AND IOCL THAT THEY SELL THEIR PRODUCTS ONLY AGAINST ADVANCE PAYMENT IN THE SHAPE OF DEMAND DRAFTS. IN THE AFOR ESAID CIRCUMSTANCES, THE DOUBT ENTERTAINED BY THE CIT IS QUITE JUSTIFIED. THESE FACTS ARE NOT AT ALL EXAMINED BY THE AO WHILE COMPLETING THE ASSESSMENT WHICH IS VERY MUCH EVIDEN T FROM ASSESSMENT ORDER ITSELF. THE CIT HAS THEREFORE SIM PLY DIRECTED THE AO TO CALL FOR INFORMATION FROM THE CONCERNED C OMPANIES I.E., HPCL AND IOCL AND ASCERTAIN THE ACTUAL PAYMEN TS MADE BY THE ASSESSEE RELATING TO PURCHASES MADE BY IT DU RING THE RELEVANT FINANCIAL YEAR. WE THEREFORE FIND NO INF IRMITY IN THE ORDER OF THE CIT ON THIS ISSUE AND ACCORDINGLY THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 8. FOURTH GROUND OF THE APPEAL RELATES TO THE EXCES S CLAIM OF EXPENDITURE UNDER PURCHASES OF BITUMEN. AS SEEN FROM THE ORDER OF THE CIT, THERE IS A CONSIDERABLE INCREASE IN EXPENDITURE TOWARDS PURCHASE AND CONSUMPTION OF BIT UMEN DURING THE ASSESSMENT YEAR UNDER DISPUTE COMPARED T O THE EARLIER ASSESSMENT YEAR. THE CIT AFTER EXAMINING TH E RECORDS FOUND THAT THE ASSESSEE HAD MAINLY EXECUTED ROAD WO RK UNDER CENTRAL AND STATE GOVERNMENTS AUTHORITIES. ALL THE PROJECTS ARE ON-GOING PROJECTS CARRIED OVER FROM THE PRECEDI NG ASSESSMENT YEAR 2003-04. WHEN COMPARED TO THE GROS S ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 7 RECEIPTS AND PROPORTIONATE EXPENDITURE ON BITUMEN B ETWEEN THE ASSESSMENT YEAR 2003-04 AND 2004-05, THE CIT FO UND HUGE DIFFERENCE OF RS.82 LAKHS. AFTER CONSIDERING THE TDS CERTIFICATE THE CIT FOUND THAT THE LENGTH OF ROAD C OMPLETED FOR ASSESSMENT YEAR 2003-04 IS MORE THAN THE LENGTH OF ROAD COMPLETED IN ASSESSMENT YEAR 2004-05. THEREFORE, T HE EXPLANATION SUBMITTED BY THE ASSESSEE FOR MORE CONS UMPTION OF BITUMEN IS FOUND TO BE DOUBTFUL. THESE FACTORS HAVE NOT BEEN EXAMINED BY THE AO WHILE COMPLETING THE ASSESS MENT. THE CIT AFTER CONSIDERING ALL THESE ASPECTS OF THE MATTER HAS DIRECTED THE AO TO MAKE DETAILED ENQUIRY AND FIND O UT THE ACTUAL CONSUMPTION OF BITUMEN. SINCE THE AO HAS NO T MADE ANY ENQUIRY INTO THIS ASPECT AND CIT HAS SIMPLY DIR ECTED THE AO TO MAKE PROPER ENQUIRY TO FINDING OUT THE CLAIM OF THE ASSESSEE WITH REGARD TO EXPENDITURE INCURRED ON PUR CHASE OF BITUMEN, WE FIND NO INFIRMITY IN THE ORDER OF THE C IT ON THIS ISSUE. HENCE THIS GROUND RAISED BY THE ASSESSEE IS REJECTED. 9. GROUND NO.5 RELATES TO THE DIRECTION OF CIT FOR ADDITION OF AN AMOUNT OF RS.15,80,256/- TOWARDS QUALITY CONT ROL CHARGES. IN COURSE OF PROCEEDINGS BEFORE THE CIT, THE ASSESSEE CONTENDED THAT IN THE PROCESS OF EXECUTIO N OF WORK, THE CONCERNED DEPARTMENTAL AUTHORITIES VERIFY THE ROAD WORK IN DIFFERENT PLACES AND RECOVERS QUALITY CONTROL CH ARGES FROM THE GROSS BILL. THE CIT FOUND FROM THE ASSESSMENT R ECORDS ON EXAMINING THE TDS CERTIFICATE THAT THERE WAS NO EVI DENCE OF ANY DEDUCTION OF QUALITY CONTROL. THE CIT THEREFOR E DIRECTED THE AO TO ADD AN AMOUNT OF RS.15,80,256/-. IT IS A FACT THAT WHILE EXECUTING CONTRACT WORKS WITH THE GOVERNMENT DEPARTMENTS, RECOVERIES ARE MADE TOWARDS QUALITY CO NTROL FROM THE CONTRACTOR EXECUTING SUCH WORK. SINCE THE ASSESSEE ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 8 HAS EXECUTED WORK UNDER CENTRAL AND STATE GOVERNMEN TS AUTHORITIES ONLY, THE FACT OF DEDUCTION TOWARDS QUA LITY CONTROL CAN BE EASILY ASCERTAINED FROM THE CONCERNED DEPART MENT UNDER WHICH THE ASSESSEE EXECUTED THE WORK. IN THE CIRCUMSTANCES, THEREFORE, ADDITION CAN BE MADE ONLY AFTER VERIFYING FACTS FROM THE CONCERNED DEPARTMENT. IF T HE ASSESSEES CLAIM TOWARDS DEDUCTION UNDER THE HEAD QUALITY CONTROL IS FOUND TO BE CORRECT, THEN THERE SHOULD NOT BE ANY ADDITION ON THIS ACCOUNT. WE THEREFORE MODIFY THE ORDER OF THE CIT TO THIS EXTENT AND DIRECT THE AO TO VERIFY THE CLAIM OF THE ASSESSEE REGARDING RECOVERIES TOWARDS QUALITY CONTR OL BY MAKING NECESSARY ENQUIRY AND ALLOW DEDUCTION IF TH E CLAIM OF THE ASSESSEE IS FOUND TO BE CORRECT. HENCE THIS GR OUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 10. GROUND NOS. 6 AND 7 RELATE TO THE DIRECTION OF THE CIT TO ADD AN AMOUNT OF RS.45,36,282/- CLAIMED AS EXPENDIT URE TOWARDS SUB-CONTRACT PAYMENT TO KRISHNA KUMAR RAJU. FROM THE ACCOUNTS OF THE ASSESSEE, THE CIT FOUND THAT TH E ASSESSEE HAS CLAIMED DEDUCTION OF RS.50,62,282/- TOWARDS SUB -CONTRACT EXPENDITURE IN THE NAME OF KRISHNA KUMAR RAJU. TH E ASSESSEE DURING THE PROCEEDINGS U/S 263 SUBMITTED B EFORE THE CIT THAT SUB-CONTRACT AGREEMENT WITH KRISHNA KUMAR RAJU FOR EXECUTION OF EARTH WORK EXCAVATION AND EXPLAINED TH AT THE SUB-CONTRACT AMOUNT IS CREDITED TO THE ACCOUNT OF S RI KRISHNA KUMAR RAJU AND IS DEBITED TO SUB-CONTRACT ACCOUNT. THE CIT HOWEVER AFTER EXAMINING THE LEDGER ACCOUNT FOUND TH AT PAYMENT TO KRISHNA KUMAR RAJU HAD STARTED FROM 2-5- 2003 AND ENDED ON 31-3-2004 AND ALL ENTRIES ARE DEBIT EN TRIES EVIDENCING ONLY PAYMENT. ON THE AFORESAID BASIS, TH E CIT CAME TO A CONCLUSION THAT KRISHNA KUMAR RAJU HAD NO T ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 9 EXECUTED ANY WORK UNDER SUB-CONTRACT AGREEMENT DURI NG H THE ASSESSMENT YEAR AND THE PAYMENT MADE TO HIM BEING I N THE NATURE OF ADVANCE CANNOT BE ALLOWED AS EXPENDITURE. HE THEREFORE DIRECTED THE AO TO BRING TO TAX THE AMOUN T OF RS.45,36,282/-. IT IS SEEN FROM THE DOCUMENTS AVAI LABLE BEFORE US THAT THE ASSESSEE HAS ENTERED INTO SUB-CO NTRACT AGREEMENT WITH KRISHNA KUMAR RAJU IN PURSUANCE TO S UCH AN AGREEMENT. CERTAIN AMOUNT HAS ALSO BEEN PAID TOWARD S SUB- CONTRACT WORK. IT IS THEREFORE NECESSARY TO ASCERT AIN WHETHER IN FACT ANY WORK HAS BEEN EXECUTED BY SUB-CONTRACTO R FOR WHICH PAYMENT WAS MADE TO HIM BY THE ASSESSEE. THE SE FACTS HAVE NOT BEEN PROPERLY BROUGHT ON RECORD. IN THIS VIEW OF THE MATTER, IT WILL NOT BE PROPER TO DIRECT ADDITION OF RS.45,36,282/- ON THIS COUNT WITHOUT ASCERTAINING FACTS AS TO WHETHER THE PAYMENT TO KRISHNA KUMAR RAJU IS TOWARD S ANY WORK EXECUTED BY HIM UNDER SUB-CONTRACT AGREEMENT. WE THEREFORE DIRECT THE AO TO MAKE NECESSARY ENQUIRY I N THIS REGARD BEFORE MAKING ANY ADDITION IN THIS COUNT. HE NCE, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSE. 11. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.1204/HYD/2011- REVENUES APPEAL 12. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLL OWING GROUNDS:- I) THE LD. CIT (A) ORDER IS ERRONEOUS BOTH IN LAW A ND ON FACTS. II) THE LD. CIT (A) HAS ERRED IN DELETING THE ADDIT ION MADE TOWARDS OUTSTANDING LIABILITY WITH IOCL. ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 10 III) THE LD. CIT (A) HAS ERRED IN DELETING THE ADDI TION MADE TOWARDS EXCESS CLAIM OF CONSUMPTION OF BITUMEN. IV) THE LD. CIT (A) IS NOT JUSTIFIED IN DELETING TH E ADDITION MADE TOWARDS EXPENDITURE UNDER QUALITY CONTROL. VI) THE LD. CIT (A) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE TOWARDS TEMPORARY STAFF QUARTERS. VII) ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 13. GROUND NOS.1 AND 6 ARE GENERAL IN NATURE AND TH EY DO NOT REQUIRE ANY ADJUDICATION. 14. GROUND NO.2 RELATES TO DELETION OF AN AMOUNT OF RS.38,14,269. BRIEFLY STATED FACTS ARE THE CIT FRO M THE BALANCE-SHEET OF THE ASSESSEE AS ON 31-3-2004, FOU ND AN OUTSTANDING LIABILITY OF RS.38,14,269/- TOWARDS IOC L. CIT FINDING THAT THE AO HAS NOT MADE PROPER ENQUIRY REG ARDING THE CLAIM OF OUTSTANDING LIABILITY, SET ASIDE THE ASSES SMENT BY DIRECTING THE AO TO MAKE NECESSARY ENQUIRY WITH IOC L FOR FINDING OUT THE REAL FACTS ON THE CLAIM OF OUTSTAND ING LIABILITY OF RS.38,14,269/-, THE CIT SPECIFICALLY DIRECTED THE AO TO OBTAIN NECESSARY INFORMATION FROM IOCL WITH REGARD TO THE PAYMENT MADE BY THE ASSESSEE TO IOCL. AS IT APPEARS FROM T HE ASSESSMENT ORDER, THE AO WITHOUT HIMSELF MAKING ANY ENQUIRY WITH IOCL, AS DIRECTED BY THE CIT, ASKED THE ASSESS EE TO FURNISH DETAILS OF OUTSTANDING LIABILITY OF IOCL. THE ASSESSEE IN COURSE OF ASSESSMENT PROCEEDINGS SUBMITTED A COPY O F LETTER DATED 11-1-2005 RECEIVED FROM IOCL WHEREIN THE IOCL HAD REQUESTED THE ASSESSEE TO MAKE PAYMENT OF THE OUTST ANDING ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 11 LIABILITY OF RS.38,54,072 WITHIN IN A PERIOD OF 30 DAYS. THE AO FROM THE LETTER FINDING THAT THE OUTSTANDING LIABIL ITY OF RS.38,54,072/- WAS AS ON 11-1-2005 AND NOT ON 31-3 -2004 DISALLOWED THE CLAIM OF THE ASSESSEE AND ADDED IT T O THE TOTAL INCOME. THE ASSESSEE BEING AGGRIEVED FILED AN APPE AL BEFORE THE CIT (A). THE CIT (A) DELETED THE AMOUNT SIMPL Y OBSERVING THAT THE AO DID NOT HAVE ANY DATA TO SHOW THAT THE AMOUNT OF RS.38,14,269/- WAS NOT PAID TO THE IOCL B EFORE THE END OF THE PREVIOUS YEAR. AS IS EVIDENT FROM THE A SSESSMENT ORDER AS WELL AS THE ORDER PASSED BY THE CIT (A) NO PROPER ENQUIRY HAS BEEN MADE TO FIND OUT THE CORRECTNESS O F THE CLAIM OF OUTSTANDING LIABILITY EVEN THOUGH THE CIT HAS SP ECIFICALLY DIRECTED THE AO TO OBTAIN NECESSARY INFORMATION FRO M IOCL REGARDING THE PAYMENT MADE BY THE ASSESSEE. THE CI T (A) HAS ALSO NOT MADE ANY ATTEMPT TO FINDING OUT WHETHE R THE ASSESSEE HAS ACTUALLY MADE ANY PAYMENT TOWARDS OUTS TANDING LIABILITY TO IOCL. WE THEREFORE SET ASIDE THE ORD ER OF THE CIT (A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FIL E OF THE AO AND DIRECT HIM TO CONDUCT NECESSARY ENQUIRY WITH IO CL AND FIND OUT THE ACTUAL LIABILITY AS ON 31-3-2004 AND T HE PAYMENTS MADE BY THE ASSESSEE TOWARDS OUTSTANDING LIABILITY TO IOCL AS PER THE DIRECTIONS OF THE CIT IN THE ORDER PASSED U/S 263. 15. GROUND NO.3 RELATES TO DELETION OF AN AMOUNT OF RS.83,49,434/-. BRIEF FACTS ARE DURING THE RELEVAN T PREVIOUS YEAR, THE ASSESSEE CLAIMED EXPENDITURE TOWARDS PURC HASES AND CONSUMPTION OF BITUMEN AT RS.83,49,434/- WHICH WAS ACCEPTED IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT. THE CIT SET ASIDE THE ASSESSMENT IN HIS ORDER PASSED U/S 263 AND DIRECTED THE AO TO EXAMINE THE CLAIM OF EXP ENDITURE ON BITUMEN BY TAKING INTO CONSIDERATION THE CONTRAC TUAL NORMS ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 12 AND OTHER ASPECTS. PURSUANT TO THE ORDER OF THE CIT , ASSESSMENT PROCEEDINGS WERE TAKEN UP BY THE AO. TH E AO IN COURSE OF ASSESSMENT PROCEEDINGS, ASKED THE ASSESSE E TO EXPLAIN THE REASONS FOR VARIATION BETWEEN THE PROPO RTIONATE EXPENDITURE IN CONSUMPTION OF BITUMEN FOR ASSTT. YE ARS 2003- 04 AND 2004-05. THE ASSESSEE EXPLAINED THAT VARIAT ION IN EXPENDITURE BETWEEN THESE YEARS WAS DUE TO HIKE IN RATES FROM YEAR TO YEAR. THE AO OBSERVING THAT THE ASSES SEE HAS FAILED TO SUBSTANTIATE ITS CLAIM BY PRODUCING CONTR ACTUAL NORMS TOWARDS CONSUMPTION OF BITUMEN, ADDED THE AMOUNT OF RS.83,49,434/-.THE ASSESSEE DURING THE APPELLATE PR OCEEDINGS BEFORE THE CIT (A) CONTENDED THAT BITUMEN IS PURCH ASED EITHER FROM IOCL OR FROM HPCL AND BOTH THESE ORGANI SATIONS ARE GOVERNMENT COMPANIES. THE ENTIRE PAYMENT IS MA DE THROUGH CROSSED CHEQUES OR DDS. IT WAS CONTENDED B Y THE ASSESSEE THAT BITUMEN IS USED IN THE FINAL PROCESS OF LAYING OF ROADS. IT WAS FURTHER CONTENDED ON BEHALF OF THE AS SESSEE THAT THE AO HAVING NOT FOUND ANY DEFICIENCY IN THE BOOKS OF ACCOUNT, THERE SHOULD NOT HAVE BEEN ANY ADDITION ON THIS ACCOUNT. THE ASSESSEE ALSO CONTENDED THAT THERE BE ING INCREASE IN RATES OF BITUMEN AND ASSESSEE HAVING US ED BEST QUALITY OF BITUMEN DURING THE YEAR, NO ADDITION WAS CALLED FOR. THE CIT(A) AFTER CONSIDERING THE CONTENTIONS RAISED BY THE ASSESSEE FOUND THAT THE AO HAS NOT REJECTED THE BOO KS OF ACCOUNT OF THE ASSESSEE. THERE IS ALSO NO FINDING B Y THE AO THAT THE PURCHASES OF BITUMEN HAVE NOT BEEN RECORDE D IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HE THEREFORE DELE TED THE AMOUNT OF RS.83,49,434/-. 16. WE HAVE HEARD RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIAL FROM RECORD. IT IS SEEN FROM T HE ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 13 ASSESSMENT ORDER THAT THE AO HAS MADE ADDITION OF RS.83,49,434/- SIMPLY BY OBSERVING THAT THE ASSESSE E HAS FAILED TO PRODUCE CONTRACTUAL NORMS TOWARDS CONSUMP TION OF BITUMEN. THE AO DOES NOT DENY THE FACT THAT THE ASS ESSEE IS ENGAGED IN CONTRACT FOR EXECUTING THE ROAD PROJECTS UNDER CENTRAL AND STATE GOVERNMENTS AUTHORITIES. THEREF ORE, CONSUMPTION OF BITUMEN IS A NECESSARY INGREDIENT IN ROAD CONSTRUCTION WORK. WHEN THE ASSESSEE HAS EXPLAINED THE REASON FOR INCREASE IN EXPENDITURE TOWARDS CONSUMPT ION OF BITUMEN, THE AO WAS NOT JUSTIFIED IN REJECTING THE SAME WITHOUT BRINGING SUFFICIENT MATERIAL ON RECORD. WE THEREFORE ARE OF THE VIEW THAT THE CIT WAS JUSTIFIED IN DELET ING THE ADDITION OF RS.83,49,434/-. HENCE, THIS GROUND RAI SED BY THE REVENUE IS REJECTED. 17. GROUND NO.4 RELATES TO DELETION OF AN AMOUNT OF RS.18,87,924/- CLAIMED UNDER THE HEAD QUALITY CONTR OL. AT THE OUTSET, WE MUST POINT OUT THAT RS.18,87,924 COMPRIS ES OF TWO ITEMS WHICH ARE QUALITY CONTROL CHARGES OF RS.15,80 ,625/- EXCESS CLAIM OF SALES TAX PAYMENT FOR RS.3,07,668/- . AS CAN BE SEEN FROM THE ASSESSMENT ORDER, THE AO HAS DISAL LOWED THE CLAIM OF QUALITY CONTROL AMOUNT OF RS.15,80,256/- O N THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE ANY EVID ENCE REGARDING DEDUCTION TOWARDS QUALITY CONTROL EITHER IN TDS CERTIFICATE OR ANY OTHER EVIDENCE. FURTHER, THE AO FOUND THAT OUT OF THE CLAIM OF RS.9,56,372/- TOWARDS PAYMENT O F SALES TAX, THE ASSESSEE WAS ABLE TO PRODUCE PROOF REGARD ING PAYMENT OF SALES-TAX OF RS.4,05,718/-,RS.20,744/-, RS.66,308/- AND RS.1,56,204 ONLY. BEFORE THE CIT (A ), THE ASSESSEE WHILE CHALLENGING THE ADDITION, CONTENDED THAT THE AMOUNT TOWARDS QUALITY CONTROL IS DEDUCTED BY GOVER NMENT ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 14 FROM THE RUNNING BILLS WHILE MAKING PAYMENTS. BEFO RE THE CIT (A), THE ASSESSEE SUBMITTED THE DETAILS OF BILLS RE CEIVED DURING THE RELEVANT PREVIOUS YEAR AND THE AMOUNT DEDUCTED TOWARDS QUALITY CONTROL AGAINST EACH OF THE BILL. THE CIT (A) AFTER EXAMINING MATERIALS AVAILABLE BEFORE HIM, FOUND THA T AN AMOUNT OF RS.15,80,256/- HAS ACTUALLY BEEN RECOVER ED BY THE GOVERNMENT DEPARTMENTS FROM THE BILLS OF THE ASSESS EE TOWARDS QUALITY CONTROL. THE CIT (A) THEREFORE ALL OWED THE EXPENDITURE ON THE GROUND THAT ANY DEDUCTION MADE B Y THE GOVERNMENT FROM THE BILLS OF CONTRACTOR IS AN ALLOW ABLE DEDUCTION UNLESS THE DEDUCTION IS TOWARDS CAPITAL EXPENDITURE. WE FIND FROM THE ORDER OF THE CIT (A) THAT THE CIT (A) HAS ALLOWED THE CLAIM OF THE ASSESSEE AFTER TAKING INTO CONSIDERATION THE NECESSARY EVIDENCE PRODUCED BEFOR E HIM. WE THEREFORE FIND NO INFIRMITY IN THE ORDER PASSED BY THE CIT (A) AND THE SAME IS UPHELD. HOWEVER, THE EXPENDITUR E CLAIMED UNDER THIS HEAD SHOULD BE RESTRICTED TO RS.15,80,25 6/-. THE DISALLOWANCE OF RS.3,07,668/- TOWARDS EXCESS CLAIM FOR SALES TAX PAYMENT HAS TO BE SUSTAINED SINCE THE ASSESSEE HAS FAILED TO OFFER ANY EXPLANATION IN THIS REGARD. 18. GROUND NO.5 RELATES TO THE ALLOWANCE OF DEPRECI ATION ON THE TEMPORARY STAFF QUARTERS OF RS.7,50,540/-. IN THE ORIGINAL ASSESSMENT MADE U/S 143(3), THE AO HAD DISALLOWED T HE CLAIM OF EXPENDITURE TOWARDS TEMPORARY STAFF QUARTERS AMO UNTING TO RS.7,50,540/- BY HOLDING IT AS A CAPITAL EXPENDITUR E. INITIALLY, THE ASSESSEE DID NOT CHALLENGE THE ASSESSMENT ORDER AS WAS PASSED U/S 143(3). IN THE ASSESSMENT ORDER PASSED IN CONSEQUENCE TO THE ORDER U/S 263, THE AO AGAIN MADE THE SAME ADDITION OF RS.7,50,540/-. THE ASSESSEE CHALL ENGED THE ADDITION BEFORE THE CIT (A). THE CIT (A) FOUND FRO M THE ORDER ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 15 OF ASSESSMENT THAT THE AO HAS DISALLOWED THE CLAIM OF EXPENDITURE INCURRED ON TEMPORARY STAFF QUARTERS ON THE GROUND THAT IT IS IN THE NATURE OF CAPITAL EXPENDIT URE. THE CIT (A) HAS THEREFORE HELD THAT ONCE THE AO HAS DISALLO WED THE EXPENDITURE CLAIMED BY HOLDING IT AS A CAPITAL EXPE NDITURE THEN THE ASSESSEE IS ENTITLED TO AVAIL DEPRECIATION ON S UCH CAPITAL EXPENDITURE. HE THEREFORE DIRECTED THE AO TO ALLOW DEPRECIATION AT THE APPROPRIATE RATES AS PRESCRIBED UNDER RULES. WE HAVE PERUSED THE ORDERS OF THE REVENUE A UTHORITIES. AS HAS BEEN OBSERVED BY THE CIT (A) THAT THE AO H AS DISALLOWED THE EXPENDITURE CLAIMED ON TEMPORARY ST AFF QUARTERS AT RS.7,50,540/- BY HOLDING IT AS A CAPIT AL EXPENDITURE WHEN THE AO IS HOLDING AN EXPENDITURE TO BE OF CAPITAL EXPENDITURE, THEN THE ASSESSEE IS ENTITLED TO GET DEPRECIATION ON THE SAME. WE THEREFORE FIND THE DI RECTION OF THE CIT TO BE CORRECT AND NO INTERFERENCE IS CALLED FOR. HENCE, THIS GROUND OF THE REVENUE IS REJECTED. 19. IN THE RESULT, THE APPEAL OF THE REVENUE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.957/HYD/2011- ASSESSEES APPEAL :- 20. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS:- I) THE ORDER OF THE LD. CIT (A) IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. II) THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.45.36,282/- MADE BY THE AO WITHOUT ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 16 CONSIDERING THE EXPLANATION SUBMITTED IN THIS REGARD. III) THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE FOLLOWING ADDITIONS MADE AND OUGHT TO HAVE DECIDED THE SAME ON MERITS WITHOUT REJECTING THE CLAIM ON THE GROUND THAT SUCH ADDITIONS WERE MADE IN THE REGULAR ASSESSMENT AND WERE ACCEPTED BY THE ASSESSEE. A)DISALLOWANCE OF COMMISSION ON SUB CONTRACT WORKS RS.1,01,245/- B)DISALLOWANCE OF EXPENSES ON ACCOUNT OF METAL PURCHASES RS.3,73,957/- C)DISALLOWANCE ON ACCOUNT OF LABOUR CHARGES RS.14,61,479/- D)DISALLOWANCE ON ACCOUNT OF STAFF TEMPORARY QUARTERS RS.7,50,540/- E)DISALLOWANCE U/S 40A(3) OF THE IT ACT RS.1,60,000/- IV) ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 21. GROUND NOS. (I) AND (IV) ARE GENERAL IN NATURE AND THEY DO NOT REQUIRE ANY ADJUDICATION. 22. GROUND NO.(II) RELATES TO ADDITION OF RS.45,36, 282/- BEING THE SUB-CONTRACT AMOUNT SAID TO HAVE BEEN PAI D TO SRI KRISHNA KUMAR RAJU TOWARDS SUB-CONTRACT WORK EXECUT ED BY HIM. THE CIT IN THE ORDER PASSED U/S 263 HAD DIREC TED THE AO TO ADD THIS AMOUNT OF RS.45,36,282/- SINCE THE CIT HELD THAT THE PAYMENT WAS IN THE NATURE OF ADVANCE AS THE SAI D KRISHNA KUMAR RAJU HAS NOT EXECUTED ANY SUB-CONTRACT WORK D URING THE RELEVANT FINANCIAL YEAR. THE AO WHILE COMPLETI NG THE ASSESSMENT IN CONSEQUENCE TO THE ORDER PASSED U/S 2 63 BY ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 17 THE CIT ADDED THE AMOUNT OF RS.45,36,282/-. THE AS SESSEE FILED AN APPEAL BEFORE THE CIT (A) CHALLENGING THE ADDITION MADE. THE CIT (A) IN PARA 11.1 OF HIS ORDER CONFIR MED THE ADDITION ON THE GROUND THAT SINCE A SPECIFIC DIRECT ION WAS GIVEN TO THE AO BY THE CIT TO MAKE ADDITION, IT CANNOT BE SUBJECT MATTER OF APPEAL. IN GROUND NO.5 OF THE ASSESSEE S APPEAL IN ITA NO.779/HYD/2009 (SUPRA), WE HAVE DEALT WITH THI S ISSUE AND SET ASIDE THE MATTER TO THE FILE OF THE AO FOR RE- EXAMINATION BY MODIFYING THE ORDER OF THE CIT AND H OLDING THAT THE AO SHALL RE-EXAMINE THE ISSUE TO FIND OUT WHETHER ANY SUB-CONTRACT WORK HAS BEEN EXECUTED BY SRI KRISHNA KUMAR RAJU FOR WHICH THE AMOUNT WAS PAID TO HIM. IN VIEW OF OUR AFORESAID DIRECTION, WE RESTORE THIS ISSUE ALSO BAC K TO THE FILE OF THE AO WHO SHALL DECIDE THE ISSUE AFRESH IN ACCO RDANCE WITH LAW AS PER DIRECTIONS GIVEN BY US IN ITA NO.779/HY D/2009 (SUPRA). THEREFORE, THIS GROUND OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 23. THE THIRD GROUND RELATES TO THE DISALLOWANCES MADE BY THE AO ON DIFFERENT DATES ENUMERATED IN THE SAID OR DER ON THE FOLLOWING ADDITIONS:- I.DISALLOWANCE OF COMMISSION ON SUB CONTRACT WORKS RS.1,01,245/- II.DISALLOWANCE OF EXPENSES ON ACCOUNT OF METAL PUR CHASES RS.3,73,957/- III.DISALLOWANCE ON ACCOUNT OF LABOUR CHARGES RS.14 ,61,479/- IV.DISALLOWANCE ON ACCOUNT OF STAFF TEMPORARY QUART ERS RS.7,50,540/- V. DISALLOWANCE U/S 40A(3) OF THE IT ACT RS.1,60,0 00/- ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 18 THE AFORESAID DISALLOWANCES WERE MADE BY THE AO IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) WHILE DETERMINING THE TOTAL INCOME OF RS.77,85,027/-. IN THE ORDER PASSED IN CONSEQUENCE TO THE CITS DIRECTION U/S 26 3, THE AO RETAINED DISALLOWANCES MADE IN THE ORIGINAL ASSESSM ENT ORDER APART FROM MAKING OTHER ADDITIONS AS PER DIRECTIONS OF THE CIT U/S 263. THE ASSESSEE CHALLENGED THE DISALLOWANCE S MADE BEFORE THE CIT(A) BY CONTENDING THAT THE ADDITIONS AS WERE MADE IN THE ORIGINAL ASSESSMENT HAVING BEEN SET ASI DE BY THE CIT U/S 263, THE ADDITIONS MADE THEREIN NO MORE SUR VIVE UNLESS THE AO SPECIFICALLY DEALT WITH THE ADDITIONS IN THE ASSESSMENT ORDER. THE CIT (A) REJECTED THE CONTENTI ON OF THE ASSESSEE ON THE GROUND THAT THE ADDITIONS MADE IN T HE ORIGINAL ASSESSMENT WERE ACCEPTED BY THE APPELLANT AND IT DI D NOT FILE ANY APPEAL AGAINST THE ORIGINAL ASSESSMENT ORDER. 24. WE HAVE HEARD THE CONTENTIONS OF THE RIVAL PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS CAN B E SEEN FROM THE ORDER PASSED U/S 263, THE CIT HAS NOT DIRECTED THE AO TO MAKE A DE NOVO ASSESSMENT. THE CIT HAS DIRECTED TH E AO TO CONSIDER SPECIFIC ISSUES AS POINTED OUT BY THE CIT. THEREFORE, THE ASSESSEES CONTENTIONS THAT THE ADDITION MADE I N THE ORIGINAL ASSESSMENT DOES NOT SURVIVE AS THE ASSESSM ENT HAS BEEN SET ASIDE, DOES NOT HOLD GOOD. WE ARE OF THE VIEW THAT THE CIT (A) WAS CORRECT IN HOLDING THAT THE ASSESSE E HAVING ACCEPTED THE ADDITIONS MADE IN THE ORIGINAL ASSESSM ENT CANNOT RAISE THE ISSUE AGAIN. THE GROUND RAISED BY THE AS SESSEE IN THIS REGARD IS DISMISSED. HENCE, THE ASSESSEES AP PEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NOS. 779 OF 2009,957 & 1204 OF 2011 M/S. S. LALAIAH & SONS, NALGONDA. =============================== 19 25. IN THE RESULT, ALL APPEALS FILED BY THE ASSESSE E AS WELL AS REVENUE ARE TREATED AS PARTLY ALLOWED FOR STATISTIC AL PURPOSE. ORDER WAS PRONOUNCED IN THE COURT ON 22-6-2012. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER DATED THE 22 ND JUNE, 2012 COPY FORWARDED TO: I) C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIY AS RESIDENCY, ROAD NO.9, HIMAYATNAGAR, HYDERABAD. II) ACIT/ADDL. CIT, RANGE-9, HYDERABAD.ITO, WARD-5(2), HYDERABAD. III) THE CIT (A)-VI, HYDERABAD. IV) THE CIT, HYDERABAD V) THE DR, ITAT, HYDERABAD JMR*