The Income Tax Officer, Ward 6(3), Hyderabad V. M/s Gautami Constructions, Hyderabad

ITA 1585/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74720 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 27-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1585/HYD/2013 ASSESSMENT YEAR 2004-2005 ITO, WARD 6 (3) HYDERABAD VS. M/S. GAUTAMI CONSTRUCTIONS HYDERABAD PAN AABFG 6614P (APPELLANT (RESPONDENT) FOR REVENUE : MR. P. SOMA SEKHAR REDDY FOR ASSESSEE : MR. K.C. DEVDAS DATE OF HEARING : 24.03.2014 DATE OF PRONOUNCEMENT : 26.03.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS A REVENUE APPEAL AGAINST THE ORDER OF THE CIT(A)-IV, HYDERABAD DATED 20.09.2013 ALLOWI NG RELIEF OF RS. 6,00,000/- BROUGHT TO TAX BY THE ASSE SSING OFFICER FOR THE ASSESSMENT YEAR 2004-2005. 2. BRIEFLY STATED, SEARCH AND SEIZURE OPERATIONS HAVE BEEN CONDUCTED IN THE CASE OF SRI RAO SUBBARAO , PARTNER OF THE ASSESSEE FIRM AND OTHERS ON 24.08.20 05. EVEN THOUGH ASSESSMENT HAS BEEN COMPLETED IN THIS CASE CONSEQUENT TO THE SEARCH AND SEIZURE PROCEEDIN GS, THE LEARNED CIT INITIATED PROCEEDINGS UNDER SECTION 263 AND IN HIS ORDER DATED 29.03.2010 HELD THAT ASSESSI NG 2 ITA.NO.1585/HYD/2013 M/S. GOUTHAMI CONSTRUCTIONS, HYDERABAD OFFICER PASSED ASSESSMENT ORDER WITHOUT MAKING PROP ER ENQUIRY AND ACCORDINGLY, SET ASIDE THE SAME FOR REFRAMING THE ASSESSMENT ORDER AFRESH. IN THE COURS E OF CONSEQUENTIAL SCRUTINY PROCEEDINGS, ASSESSEE SUBMIT TED THAT IT HAD BEEN AWARDED CONTRACT FOR COMPLETION OF WORK OF CONSTRUCTION OF 30 FLATS BY BOWENPALLY SAI DARSHINI FLAT OWNERS ASSOCIATION BY AN MOU DATED 24.01.2003, WHICH HAS BEEN SEIZED VIDE ANNEXURE NO.RSR/PO-1/1 AT PAGES 73 TO 75, AND THIS WORK HAD BEEN IN-TURN ASSIGNED TO M/S. MULTI TECH FOR A SUM OF RS.52,00,000/- ON SUB-CONTRACT, AS A RESULT OF WHIC H, THERE IS NO ALLEGED SUPPRESSION OF PROFIT OF RS.6,00,000/-. ASSESSEE SUBMITTED THAT IT HAD RECEI VED SUM OF RS.64,06,580/- WHICH HAD BEEN DULY REFLECTED IN THE RETURNS OF INCOME FOR ASSESSMENT YEARS 2003-200 4 TO 2005-2006. ASSESSEE FURTHER SUBMITTED THAT IT HA D MERELY UNDERTAKEN THE CONSTRUCTION WORK AS PART OF THE CONTRACT AND THAT IT HAD NOT UNDERTAKEN ANY SALES O F FLATS. ASSESSING OFFICER DID NOT ACCEPT THE PLEA AN D HELD THAT ASSESSEE HAD ENTERED INTO MOU FOR A SUM OF RS. 58,00,000/- AND HAS IN TURN, ENTRUSTED THE WORK FOR RS.52,00,000/- AND DIFFERENCE OF RS.6,00,000/- WAS BROUGHT TO TAX AS UNDISCLOSED INCOME FOR ASSESSMENT YEAR 2004-2005. 3. LD. CIT(A) ON EXAMINATION OF THE GROSS RECE IPTS OVER A PERIOD OF 3 YEARS TO THE TUNE OF RS.64,06,58 0/- ON WHICH INCOME WAS ASSESSED AT 10% EXTRACTED DETAILS IN PARA 4.1 AND DELETED THE ADDITION BY STATING AS UNDER: 3 ITA.NO.1585/HYD/2013 M/S. GOUTHAMI CONSTRUCTIONS, HYDERABAD 4.2. I HAVE EXAMINED THE FACTS ON RECORD AND THE SUBMISSIONS OF THE APPELLANT. THE REFERENCE TO THE SUM OF RS.58,00,000/- UNDER THE CONTRACT WITH THE BOWENPALLI SAI DARSHAN FLAT OWNERS ASSOCIATIONW AS FIRST MADE IN THE ASSESSMENT ORDERS U/S 143(3) R.W.S. 153C, DATED 28.12.2007 FOR THE A.YS 2003- 04 & 2004-05 WHERE THE ASSESSING OFFICER OBSERVED THAT THE TOTAL CONTRACT AMOUNT UNDER THE MOU DATED 24.01.2003 WAS RS.58,00,000. THIS MOU FORMS PART OF THE SEIZED DOCUMENTS VIDE ANNEXURE RSR/PO-1/1, PAGES 73-75. THIS DOCUMENT STATES AS FOLLOWS : THE PARTY OF THE FIRST PART AGREED TO PAY RS.52,00,000 (RS. FIFTY TWO LAKHS ONLY) FOR COMPLETION OF THE ENTIRE COMPLEX CONSTRUCTION WORK. 4.3. THERE IS NO REFERENCE TO ANY OTHER DOCUMENT IN ANY OF THE ASSESSMENT ORDERS WHICH COULD BE SAID TO FORM THE BASIS FOR THE ALLEGED CONTRACT AMOUNT OF RS.58,00,000. EVEN IN THE ORDER APPEALED AGAINST, THE ASSESSING OFFICER HAS REFERRED TO THE MOU DATED 24.01.2003 AND NOT TO ANY OTHER DOCUMENT. IN VIEW OF THE NARRATION, AS QUOTED ABOVE, IN THE MOU DATED 24.01.2003, WHICH ALSO FORMS PART OF SEIZED DOCUMENTS, IT IS HELD THA T THE CONTRACT AMOUNT AS PER THE MOU WAS RS.52,00,000 AND NOT RS.58,00,000 AND THE ADDITION OF RS.6,00,000 IS DIRECTED TO BE DELETED. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF T HE LD. CIT(A) SINCE IT IS A FACTUAL ISSUE ON WHICH LD. CIT (A) HAS GIVEN RELIEF AFTER EXAMINING THE RECEIPTS BY TH E ASSESSEE. WE CONFIRM THE SAME AS NOTHING WAS BROUGH T ON RECORD TO COUNTER THE FINDINGS OF THE LD. CIT(A) . THEREFORE, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4 ITA.NO.1585/HYD/2013 M/S. GOUTHAMI CONSTRUCTIONS, HYDERABAD 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.03.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD DATED 26 TH MARCH, 2014 VBP/- COPY TO 1. THE ITO, WARD 6 (3), HYDERABAD 2. M/S. GAUTAMI CONSTRUCTIONS, PLOT NO.44, ROAD NO. 7/72, PRASHASHAN NAGAR, JUBILEE HILLS, HYDERABAD 96 . 3. CIT(A) - IV, HYDERABAD 4. CIT-III, HYDERABAD 5. D.R. ITAT, A BENCH, HYDERABAD.