M/s My Home Raghuram Constructions, Hyderabad V. Asst. CIT, Circle -10(1), Hyderabad

ITA 1443/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1418 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MAYA MAHESWARI
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, J.M. AND SHRI B.R.BASKARAN, A.M. ITA NO.1443/HYD/2012 (ASSESSMENT YEAR 20 09-10) M/S. MY HOME RAGHURAM CONSTRUCTIONS, HYDERABAD ( PAN - AABFT 3021 H ) V/S. ASSTT. COMMISSIONER OF INCOME - TAX CIRCLE 10(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI P.MURALI MOHAN RAO RESPONDENT BY : MS. MAYA MAHESWARI DATE OF HEARING 3.1 .201 3 DATE OF PRONOUNCEMENT 4.1.2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 20- 07-2012 PASSED BY LEARNED CIT(A)-VI, HYDERABAD AND IT RELATES TO THE ASSESSMENT YEAR 2009-10. THE ASSESSEE IS ASSAILING THE DECISION OF LEARNED CIT(A) IN CONFIRMING THE INCOME ESTIMATED BY THE AS SESSING OFFICER @ 8% OF THE GROSS CONTRACT RECEIPTS. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND HE MAINTAINS BOOKS OF ACC OUNTS REGULARLY. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER REJECTED THE B OOK RESULTS AND ESTIMATED THE INCOME @ 8% OF THE GROSS CONTRACT RECEIPTS. HE SUBM ITTED THAT THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR THE EARLIER YEARS HAVE BEEN COMPLETED U/S 143(3) ITA NO.1443/HYD/2012 M/S. MY HOME RAGHURAM CONSTRUCTIONS, HYDERABAD 2 OF THE ACT AND HENCE THE ASSESSING OFFICER WOULD HA VE BEEN JUSTIFIED IN ADOPTING THE AVERAGE RATE OF PROFIT DETERMINED IN THE ASSESS EES OWN CASE FOR THE EARLIER YEARS FOR THE PURPOSE OF DETERMINING THE INCOME OF THE INSTANT YEAR, INSTEAD OF ADOPTING THE RATE OF 8%. HE PLACED RELIANCE ON THE DECISION DATED 04-05-2012 PASSED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S ECI ENGINEERING & CONSTRUCTION CO. LTD IN ITA NO.2048/H YD/2011 AND SUBMITTED THAT THE TRIBUNAL IN THAT CASE, HAS HELD THAT THE PAST H ISTORY OF THE ASSESSEE IS THE BEST YARD STICK TO ASSESS THE INCOME OF THE ASSESSEE INS TEAD OF APPLYING THE RATE OF 8%. 3. ON THE OTHER HAND, THE LEARNED D.R SUBMITT ED THAT THE ASSESSEE HAS SHOWN PROFIT ONLY IN THE ASSESSMENT YEARS 2007- 08 AND 2008-09. THE ASSESSEE DID NOT HAVE ANY INCOME FOR THE ASSESSMENT YEAR 2006-07. ACCORDINGLY SHE SUBMITTED THAT THE RECENT RESULTS OF THE ASSESS EE CANNOT BE CONSIDERED AS THE CONSISTENT RESULTS. ACCORDINGLY SHE SUBMITTED THAT THE TAX AUTHORITIES WERE RIGHT IN DETERMINING THE INCOME @ 8% OF THE GROSS CONTRAC T RECEIPTS, WHICH RATE IS CONSISTENTLY FOLLOWED BY THE TRIBUNAL ALSO. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. ACCO RDING TO LEARNED A.R, THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2007-08 AN D 2008-09 HAVE BEEN COMPLETED U/S 143(3) OF THE ACT. HOWEVER, HE DID N OT FILE COPY OF THE ASSESSMENT ORDERS TO SUBSTANTIATE HIS CLAIM. THE LEARNED D.R ALSO RIGHTLY OBSERVED THAT THE SAID CLAIM OF THE ASSESSEE NEEDS VERIFICATION. FUR THER THE ASSESSEE HAS DECLARED A NET PROFIT OF 2.5% FOR THE ASSESSMENT YEAR 2007-08 A ND A NET PROFIT OF 5.81% IN THE ASSESSMENT YEAR 2008-09. THUS, THERE IS AN INC REASE IN THE RATE OF PROFIT. IF THE CLAIM OF THE ASSESSEE THAT THE EARLIER TWO ASSE SSMENTS HAVE BEEN COMPLETED U/S 143(3) OF THE ACT, AS HELD BY THE CO-ORDINATE B ENCH IN THE CASE REFERRED (SUPRA), IN OUR VIEW, THE ASSESSING OFFICER SHOULD HAVE ALSO CONSIDERED THE PAST RECORDS OF THE ASSESSEE WHILE DETERMINING THE RATE OF PROFIT. HENCE, AS PRAYED BY ITA NO.1443/HYD/2012 M/S. MY HOME RAGHURAM CONSTRUCTIONS, HYDERABAD 3 LEARNED A.R, THIS ISSUE REQUIRES FRESH CONSIDERATIO N AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LE ARNED CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH TH E DIRECTION TO RE-EXAMINE THE ISSUE OF RATE OF PROFIT TO BE ADOPTED FOR DETERMINI NG THE INCOME OF THE INSTANT YEAR BY CONSIDERING THE PAST RECORDS AND ALSO OTHER RELEVANT FACTORS AND DECIDE THE ISSUE IN ACCORDANCE WITH THE LAW. THE ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 04.01.2013 SD/- SD/- ( ASHA VIJAYARAGHAVAN ) ( B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED/- 04 TH JANUARY, 2013 COPY FORWARDED TO: 1. M/S. MY HOME RAGHURAM CONSTRUCTIONS, C/O. M/S.P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-6755/2/3, 1ST FLOOR, SOMAJIGUDA, HYDERABAD-82 2. 3. 4. 5. ASSTT. COMMISSIONER OF INCOME - TAX CRICLE 10(1), HYDERABAD COMMISSIONER OF INCOME-TAX VI, HYDERABAD COMMISSIONER OF INCOME-TAX V, HYDERABAD DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.