ACIT, Hyderabad V. Sri Neeraj Kumar Agarwal, Hyderabad

ITA 150/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9702 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASREE ANANTA KRISHNAN
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Business income; TDS
• Section: 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT & SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A. NO. 150/HYD/2010 (ASSESSMENT YEAR 2006-07) ASST. CIT CIRCLE 10(1), HYDERABAD VS. SRI NEERAJ KUMAR AGARWAL, HYDERABAD PAN: AELPA3982N APPELLANT RESPONDENT I.T.A. NO. 210/HYD/2010 (ASSESSMENT YEAR 2006-07) SRI NEERAJ KUMAR AGARWAL, HYDERABAD PAN: AELPA3982N VS. ADDL. CIT RANGE 10, HYDERABAD APPELLANT RESPONDENT REVENUE BY: SMT. SUBHASREE ANANTA KRISHNAN ASSESSEE BY: SHRI P. MURALI MOHAN RAO O R D E R PER CHANDRA POOJARI, AM: THESE ARE CROSS APPEALS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 4.11.2009 AND PERTAI NS TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEES GRIEVANCE IN HIS APPEAL IS WITH REGA RD TO ESTIMATION OF INCOME AT 8% OF THE SALES IN SPITE OF DECLARATION OF LOSS AT RS. 2,36,33,284. THE REVENU E IS AGGRIEVED AGAINST THE ACTIONS OF THE CIT(A) WITH RE FERENCE TO REJECTING THE BOOKS OF ACCOUNT BY PLACING RELIANCE ON THE EARLIER YEARS ORDER OF THIS TRIBUNAL FOR A.Y. 2005 -06 THOUGH I.T.A. NOS. 150&210/HYD/2010 SRI NEERAJ KUMAR AGARWAL ======================= 2 THE ASSESSING OFFICER MADE SPECIFIC DISALLOWANCE ON ACCOUNT OF AMOUNT WITHDRAWN FROM PROFIT AND LOSS A/ C. AT RS. 6,05,37,274 AND 40(A)(IA) DISALLOWANCE AT RS. 3,14,73,033 AND DISALLOWANCE OF LEGAL EXPENSES AT R S. 16,42,500. 3. BRIEF FACTS OF THE ISSUE ARE THAT CONSEQUENT TO SUR VEY CONDUCTED AT THE ASSESSEES PLACE, THE ASSESSEE FIL ED A RETURN OF INCOME ON 31.10.2006 DECLARING INCOME AT RS. 3,68,04,000 AND LATER THE ASSESSEE REVISED THE RETU RN ON 11.1.2008 AND SHOWN LOSS OF RS. 2,36,33,284. THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE INCOME- TAX ACT, 1961. THE ASSESSEE FAILED TO FURNISH NECESSAR Y DETAILS IN SPITE OF GIVING ADEQUATE OPPORTUNITY OF HEARING. LATER ON THE ASSESSMENT WAS COMPLETED AS FOLLOWS: I. BUSINESS INCOME DECLARED BY THE ASSESSEE (-) RS. 2,36,33,284 ADDITION U/S. 40(A)(IA) I) ON TRANSPORTATION OF IRON ORE RS. 2,41,92,701 II) ON TRANSPORTATION OF COAL RS. 72,80,332 RS. 3,14,73,033 DISALLOWANCE OF LEGAL EXPENSES RS. 16,42,500 TOTAL INCOME -------------------- RS. 7,00,19,522 -------------------- 4. THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A). THE CIT(A) ESTIMATED THE INCOME OF THE ASSESSEE AT 8% O F THE SALE AFTER REJECTING THE BOOKS OF ACCOUNT BY PLACIN G RELIANCE ON THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CAS E DATED I.T.A. NOS. 150&210/HYD/2010 SRI NEERAJ KUMAR AGARWAL ======================= 3 27 TH FEBRUARY, 2009 IN I.T.A. NO. 1103/HYD/07 FOR A.Y. 2005-06. AGAINST THIS ORDER OF THE CIT(A) BOTH THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE THE CIT(A) ESTIMATED THE INCOME OF THE ASSESSEE AT 8% OF THE S ALES. THE LEARNED CIT(A) PLACED RELIANCE ON THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) WHEREIN THE TRIBUNAL CONSIDERED SIMILAR ISSUE AND HELD THAT THE ASSESSEES INCOME HAS TO BE ESTIMATED AT 8% OF SALE S AND THEREAFTER THERE CANNOT BE ANY DISALLOWANCE TOWARDS ANY ADDITION EVEN U/S. 40(A)(IA) OF THE ACT. WHILE HOL DING SO, THE TRIBUNAL PLACED RELIANCE ON THE JUDGEMENT OF TH E JURISDICTIONAL HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS VS. CIT, REPORTED IN 232 ITR 776 AND ALSO ON THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN I.T.O. VS. KENARAM SAH AND SUBHASH SAH, 301 ITR (AT) 171. SINCE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CA SE ARE SIMILAR THAT THAT ONE CONSIDERED BY THE TRIBUNAL FO R A.Y. 2005-06 IN ASSESSEES OWN CASE, WE FIND NO REASON T O INTERFERE WITH THE ORDER OF THE CIT(A) FOR THE ASSE SSMENT YEAR UNDER CONSIDERATION. ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT(A) IN ESTIMATING THE INCOME OF THE ASSESSEE AT 8% OF SALES AFTER REJECTING THE BOOK RESULTS. N O FURTHER I.T.A. NOS. 150&210/HYD/2010 SRI NEERAJ KUMAR AGARWAL ======================= 4 DISALLOWANCE OF ANY EXPENSES IS CALLED FOR AND, THE REFORE, THE DISALLOWANCE MADE U/S. 40(A)(IA) FOR NON DEDUCT ION OF TDS ON PAYMENT MADE ON TRANSPORTATION OF ORE, TRANSPORTATION OF COAL AND LEGAL EXPENSES IS TO BE DELETED. THE GROUND RAISED BY THE REVENUE IS DISMISSED. 6. SINCE WE HAVE ALREADY DISMISSED THE REVENUES APPEAL AND UPHELD THE ORDER OF THE CIT(A), THE GROU ND RAISED BY THE ASSESSEE BECOMES INFRUCTUOUS. 7. IN THE RESULT, BOTH REVENUES APPEAL AND THE ASSESSEES APPEAL ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2011. SD/ - (G.C. GUPTA) VICE PRESIDENT SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 31 ST MARCH, 2011 TPRAO COPY FORWARDED TO: 1. THE ASST. CIT, CIRCLE 10(1), ROOM NO. 515, I.T. TOW ERS, A.C. GUARDS, HYDERABAD. 2. THE ADDL. CIT, RANGE 10, HYDERABAD. 2. SRI NEERAJ KUMAR AGARWAL, C/O. M/S. P. MURALI & CO. , CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 3. THE CIT(A)-VI, HYDERABAD 4 THE CIT-V, HYDERABAD 5. THE DR B BENCH, ITAT, HYDERABAD