ITO, Hyderabad V. M/s Teja Power Controls, Hyderabad

ITA 1387/HYD/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5841 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 26-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Assessee Lawyers: NEERAJA
• Keywords: Assessment record
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMERAND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.1387/HYD/2008 : ASSTT. YEAR 2002 -03 INCOME-TAX OFFICER, WARD-3, HYDERABAD. (APPELLANT) VS M/S. TEJA POWER CONTROLS, HYDERABAD. (PAN:AABFT 4282E) (RESPONDENT) APPELLANT BY : SRI E.S. NAGENDRA PRASAD RESPONDENT BY : SMT. NEERAJA O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER THE APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 24-6-2008 BY THE CIT (A)-III, HYDERABAD FOR ASSESSMENT YEAR 2002-03. 2. THE FOLLOWING GROUNDS WERE RAISED BY THE REVENU E IN THIS APPEAL. I) THE ORDER OF THE CIT (A) IS ERRONEOUS IN LAW AND ON T HE FACTS OF THE CASE. II) THE CIT (A) ERRED IN DELETING THE ADDITION OF R S.8,53,396 MADE IN THE ASSESSMENT. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM OF CIVIL & ELECTRICAL CONTRACTORS AND HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 31-10-2002.THE ORI GINAL ASSESSMENT WAS COMPLETED IN THIS CASE FOR THE ASSESSMENT YEAR 2 002- 03 ON 8-3-2004 ON A TOTAL INCOME OF RS.7,27,780. SUB SEQUENTLY, THE AUDIT PARTY POINTED OUT THAT AS PER THE CERTIFICATE IN FORM NO.16A ISSUED BY THE EXECUTIVE ENGINEER, MUNICIPAL CORPORATION, RAJ AHMUNDRY, THE TDS DEDUCTED WAS AT RS.1,59,185, THE CORRESPONDING GROSS B ILLS WORKED OUT TO RS.69,21,087. HOWEVER, THE ASSESSEE HAD ADMITTED ONLY RS.60,67,691 AND THE DIFFERENCE OF RS.8,53,396 WAS ESCAPE D INCOME OF THE ASSESSEE FOR THIS YEAR AND ON THIS BASIS, THE ASSESSING OF FICER ISSUED A NOTICE UNDER SECTION 148 ON 12-3-2007 TO THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE SOUGHT FOR FURTHER ADJOURNMENT ON WHICH THE ASSESSING OFFICER ADJOUR NED THE CASE TO 15-11-2007 AND THERE WAS NO COMPLIANCE ON THIS DATE ALSO FROM THE ASSESSEE. IN VIEW OF THIS, THE ASSESSING OFFICER COMPLETED T HE ASSESSMENT EX- PARTE IN WHICH HE MADE AN ADDITION OF RS. 8,53,396 ON THE BASIS OF ESCAPEMENT OF INCOME POINTED OUT BY THE RE VENUE AUDIT PARTY. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A). 4. THE CIT(A) NOTICED FROM A PERUSAL OF THE RECORDS, W ITH REGARD TO THE ISSUE OF RECONCILIATION OF TURNOVER WITH MUNICIPAL CORPORATION FOR ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED A COPY OF LETTER FROM THE EXECUTIVE ENGINEER, MUNICIPAL CORPORA TION OF RAJAHMUNDRY ALONG WITH ENCLOSURES BEFORE THE ASSESSING OF FICER WHICH ARE AVAILABLE ON THE ASSESSMENT RECORDS AND IT IS EVIDENT FROM THESE DOCUMENTS, THAT THE TOTAL WORK DONE FOR THE RELEVANT ASSESSMENT WAS 3 RS.67,71,940 AND OUT OF THIS RS.7,04,249 WAS WITH HEL D AS AMOUNT DETAINED FOR NON COMPLETION OF WORK. THEREFORE, TH E TOTAL AMOUNT PAID BY RAJAHMUNDRY MUNICIPAL CORPORATION TO THE ASSESSEE FO R THE YEAR 2001-02 WORKED OUT TO RS.60,67,691 WHICH WAS REFLECTED IN THE BOOKS OF ACCOUNTS BY THE ASSESSEE. THE CIT(A) FURTHER HELD THAT T HE ONLY GROUND ON WHICH THE ASSESSING OFFICER HAS ESTIMATED THE TURNOVER A T A HIGHER FIGURE OF RS.69,21,087 IS THAT THE AMOUNT OF TDS DEDU CTED BY THE MUNICIPAL CORPORATION OF RAJAHMUNDRY WAS RS.1,59,185 AND ON APPLYING THE TDS RATE OF 2.3% REVERSELY, THE GROSS T URNOVER WOULD COME TO RS.69,21,087 AND THIS LOGIC ADOPTED BY THE ASSESSI NG OFFICER FOR MAKING THE ADDITION TO TURNOVER IS NOT SOUND AND IN H IS OPINION BECAUSE THE LETTER ISSUED BY THE EXECUTIVE ENGINEER OR RAJAHMU NDRY MUNICIPAL CORPORATION CLEARLY INDICATES THE VALUE OF WORK DONE AND THE TOTAL AMOUNT PAID TO THE CONTRACTOR FOR THE FINANCIAL YEAR 2001-02. AFTER CONSIDERING THE FACTS AND THE CIRCUMSTANCES OF THE CASE, TH E CIT(A) HELD THAT THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING HIG HER TURNOVER IN RESPECT OF THE WORK DONE BY THE ASSESSEE FOR RAJAHMUNDRY MUNICIPAL CORPORATION DURING THE YEAR UNDER CONSIDERATION WAS WI THOUT PROPER BASIS, AND COULD NOT BE SUSTAINED. IN VIEW OF THE ABOV E, HE DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.8, 53, 396 MADE IN THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE CIT, HYDERABAD, THE REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE BY SUPPORTING THE ORDER OF THE FIRST APPELLATE AUTHORITY SUBMITTED THAT HE IS P ERFECTLY JUSTIFIED TO GIVE DIRECTION TO THE ASSESSING OFFICER TO DELETE THE ADD ITION OF RS.8,53,396 MADE IN THE ASSESSMENT. IN SUPPORT OF THE SAM E, SHE FILED 4 A PAPER BOOK CONTAINING LEDGER COPY IN THE ASSESSEE'S BOOK , COPY OF FORM 16A, COPY OF LETTER FROM EXECUTIVE ENGINEER, MC, RAJAHMUNDRI. 7. ON THE OTHER HAND, THE LEARNED DR WHILE SUPPORTIN G THE ORDER OF ASSESSING OFFICER SUBMITTED THAT THE CIT (A) IS NOT JUSTIFI ED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE ASSESSING OFF ICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CIT(A ) HELD THAT THE ONLY GROUND ON WHICH THE ASSESSING OFFICER HAS ESTIMATED THE TUR NOVER AT A HIGHER FIGURE OF RS.69,21,087 IS THAT THE AMOUNT OF T DS DEDUCTED BY THE MUNICIPAL CORPORATION OF RAJAHMUNDRY WAS RS.1,59,185 AND ON APPLYING THE TDS RATE OF 2.3% REVERSELY, THE GROSS T URNOVER WOULD COME TO RS.69,21,087 AND THIS LOGIC ADOPTED BY THE ASSESSI NG OFFICER FOR MAKING THE ADDITION TO TURNOVER IS NOT SOUND AND IN H IS OPINION BECAUSE THE LETTER ISSUED BY THE EXECUTIVE ENGINEER OR RAJAHMU NDRY MUNICIPAL CORPORATION CLEARLY INDICATES THE VALUE OF WORK DONE AND THE TOTAL AMOUNT PAID TO THE CONTRACTOR FOR THE FINANCIAL YEAR 2001-02. AFTER CONSIDERING TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING HIG HER TURNOVER IN RESPECT OF THE WORK DONE BY THE ASSESSEE FOR RAJAHMUNDRY MUNICIPAL CORPORATION DURING THE YEAR UNDER CONSIDERATION WAS WI THOUT PROPER BASIS, AND COULD NOT BE SUSTAINED. IN VIEW OF THE ABOV E, WE ARE OF THE CONSIDERED OPINION THAT THE CIT (A) IS PERFECTLY JUSTIF IED IN HIS ACTION IN DELETING THE ADDITION OF RS.8,53,396 MADE BY THE ASSESSI NG OFFICER AND HENCE NO INTERFERENCE IS CALLED FOR. ACCORDINGLY, THE O RDER OF THE CIT (A) IS CONFIRMED AND THE GROUNDS RAISED BY THE REVENUE STAND REJECTED. 5 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26- 3--2010 SD/- (N.R.S. GANESAN) SD/- (AKBER BASHA) JUDICIAL MEMBER ACCOUNTANT MEMBER. DT/-26TH MAR. 2010. COPY FORWARDED TO: 1. ITO, WATRD-8(3), 8TH FLOOR, IT TOWERS, MASAB TANK, HYDERABAD. 2. M/S. TEJA POWER CONTROLS, PLOT NO.13, MIE HAFEEZPET , MIYAPUR, HYDERABAD. 3. CIT, AP, HYDERABAD. 4. CIT(A) III, HYDERABAD. 5. THE D.R., ITAT, HYDERABAD. JMR