K. Srinivas Rao, Nizamabad, Hyderabad V. Addl.CIT, Cir-1, Nizamabad

ITA 1237/HYD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53672 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PHANI KISHORE
• Assessee Lawyers: CHAITANYA KUMAR
• Keywords: Depreciation
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I .T.A. NO. 1237/HYD/2011 ASSESSMENT YEAR : 2007-08 SHRI K. SRINIVAS RAO NIZAMABAD PAN: AJAPK4065A VS. ADDL. COMMISSIONER OF INCOME-TAX, NIZAMABAD RANGE, NIZAMABAD APPELLANT RESPONDENT APPELLANT BY: SHRI CHAITANYA KUMAR RESPONDENT BY: SHRI PHANI KISHORE DATE OF HEARING: 11.10.2011 DATE OF PRONOUNCEMENT: 11.10.2011 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 9.3.2011 FOR THE ASSESSM ENT YEARS 2007-08. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APP EAL: I) THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. II) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION O F THE ASSESSING OFFICER IN ESTIMATING THE INCOME AT 10% O F THE CONTRACT RECEIPTS. III) THE LEARNED CIT(A) ERRED IN ESTIMATING THE INCOME F ROM SUB CONTRACTS AT 5% OF THE GROSS CONTRACT RECEIPTS. TH E LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ESTIMATION CAN BE MADE ON NET CONTRACT RECEIPTS AND NOT ON GROSS CONT RACT RECEIPTS. IV) THE LEARNED CIT(A) OUGHT TO HAVE DIRECTED ALLOWANCE OF DEPRECIATION AFTER ESTIMATION OF INCOME. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND DERIVES INCOME FROM CIVIL CONTRACT WORKS. HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 2.11.2007 ADMITT ING A TOTAL INCOME OF RS. 11,35,230. THE CASE WAS PROCESSED U/S. 143( 1) AND SUBSEQUENTLY WAS SELECTED FOR SCRUTINY. ACCORDINGL Y, NOTICE U/S. 143(2) I.T.A. NOS. 1237/HYD/2011 MR. K. SRINIVAS RAO, NIZAMABAD ========================= 2 OF THE ACT WAS ISSUED. SEVERAL OPPORTUNITIES WERE ACCORDED TO THE ASSESSEE BY ISSUING NOTICES U/S. 143(2), 142(1) AND SHOW-CAUSE LETTERS. IN RESPONSE TO THE SAID NOTICES AND SHOW CAUSE LETTER, THE ASSESSEE PRODUCED THE BOOKS OF ACCOUNTS AND OTHER R ELEVANT MATERIAL. AFTER EXAMINING THE SAME, THE ASSESSING OFFICER FOU ND THAT MOST OF THE VOUCHERS WERE SELF MADE AND SINCE THE ASSESSEE'S EX PLANATION WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER HE REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED THE INCOME AT 10% OF GROSS RECEIPTS OF RS. 3,85,73,964 AND ADDED AN AMOUNT OF RS. 38,57,394 TO THE INCOME RETURNED VIDE ORDER DATED 31.12.2009. AG AINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. I N THIS CASE THE DEPARTMENT CAME ON APPEAL BEFORE THIS TRIBUNAL IN I .T.A. NO. 1114/HYD/2011 VIDE ORDER DATED 29 TH SEPTEMBER, 2011, THE TRIBUNAL HELD AS FOLLOWS: WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. IN OUR OPINION, THERE IS NO G ENERAL RULE WITH REGARD TO ESTIMATION OF PROFIT ON CONTRACT REC EIPTS. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRES ENT CASE, WE DIRECT THE ASSESSING OFFICER TO ESTIMATE THE INCOME AT 10% IN CASE OF MAIN CONTRACT CARRIED ON BY THE ASSESSEE AN D 8% IN CASE OF SUB CONTRACTS CARRIED BY THE ASSESSEE AND 4 % IN CASE OF SUB CONTRACTS GIVEN IF ANY BY THE ASSESSEE TO 3 RD PARTY. THE ASSESSEE THEREAFTER ENTITLED FOR NO DEDUCTIONS TOWA RDS DEPRECIATION AND ANY OTHER DEDUCTION ALLOWABLE UNDE R THE PROVISIONS OF SECTION 30 TO 38 OF THE IT ACT, WHICH SHALL BE DEEMED TO HAVE BEEN ALREADY GIVEN FULL EFFECT AND N O FURTHER DEDUCTION IS TO BE ALLOWABLE.' 5. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL, THE APPEAL OF THE ASSESSEE BECOMES INFRUCTUOUS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH OCTOBER, 2011. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 11 TH OCTOBER, 2011 TPRAO I.T.A. NOS. 1237/HYD/2011 MR. K. SRINIVAS RAO, NIZAMABAD ========================= 3 COPY FORWARDED TO: 1. SHRI K. SRINIVAS RAO, C/O. SHRI S. RAMA RAO, ADV OCATE, 3- 6-643, SHRIYA'S ELEGANCE, FLAT NO. 102, ST. NO. 9, HIMAYATHNAGAR, HYDERABAD-29. 2. THE ADDL. COMMISSIONER OF INCOME-TAX, NIAZAMBAD RANGE, NIZAMABAD. 3. THE CIT(A)-VI, HYDERABAD. 4. THE CIT-V, HYDERABAD. 5. THE DR A BENCH, ITAT, HYDERABAD