Soma Srinivas Reddy, Hyderabad V. Addl. CIT, Range-9, Hyderabad

ITA 1691/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2966 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 20-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1691/HYD/2012 ASSESSMENT YEAR 2009-10 SRI SOMA SRINIVAS REDDY HYDERABAD PAN: AAIFS8971N VS. THE ADDL. CIT RANGE-9 HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI NONE RESPONDENT BY: SRI K.J. RAO DATE OF HEARING: 10.06.2013 DATE OF PRONOUNCEMENT: 10.06.2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-VI, HYDERABAD DATED 10.8.2012 FOR ASSESSM ENT YEAR 2009-10. 2. THE ASSESSEE RAISED THE FOLLOWING GROUND: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED COMMISSIONER ERRED IN LAW AND FACTS OF THE CASE IN DISMISSING THE APPEAL AND CONFIRMING TH E ORDER OF THE ASSESSING OFFICER ON REJECTION OF BOOK S OF ACCOUNT MAINTAINED BY THE APPELLANT AND RESORTING T O ESTIMATION OF INCOME CONTRARY TO FACTS AND CIRCUMSTANCES OF THE CASE. 3. EARLIER THIS CASE CAME FOR HEARING ON 4.3.2013. THE ASSESSEE'S COUNSEL MR. SAMUEL NAGADESI TAKEN ADJOUR NMENT AND THE CASE WAS POSTED FOR HEARING ON 10.6.2013. HOWEVER, ITA. NO. 1691/HYD/2012 SRI SOMA SRINIVAS REDDY =================== 2 NONE APPEARED FOR THE ASSESSEE ON 10.6.2013. HENCE , WE PROCEED TO DECIDE THE ISSUE AFTER HEARING THE LEARN ED DR. 4. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE'S OR IGINAL ASSESSMENT WAS COMPLETED U/S. 144 OF INCOME-TAX ACT , 1961 WHERE IN THE ASSESSING OFFICER DETERMINED INCOME OF THE ASSESSEE AT RS. 71,48,680 AS AGAINST THE INCOME RET URNED BY THE ASSESSEE AT RS. 42,10,491. THE ASSESSEE WAS ENGAG ED IN THE BUSINESS OF EXECUTING CIVIL CONTRACT WORKS. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER EXAMI NED THE BOOKS OF ACCOUNT AND NOTICED THE FOLLOWING DEFICIEN CIES: (A) PROPER BILLS/VOUCHERS FOR SEVERAL PURCHASES MADE HA VE NOT BEEN PRODUCED; THE ENTRIES IN THE ACCOUNT BOOKS COULD NOT BE VERIFIED; THAT CORRECT PROFITS COULD N OT BE DEDUCED FROM THE BOOKS PRODUCED BY THE ASSESSEE. (B) THERE WERE NO QUANTITATIVE DETAILS FOR THE MATERIAL PURCHASES BY THE ASSESSEE; IT WAS NOT POSSIBLE TO ACCEPT THE BOOKS OF ACCOUNT, WHERE THE TURNOVER WAS AS LARGE AS ABOUT RS. 10.67 CRORES WITHOUT A QUANTITATIVE TALLY. (C) A FAIRLY BIG SUM OF MONEY WAS ALLEGED TO HAVE BEEN PAID TOWARDS MATERIAL PURCHASES AND LABOUR CHARGES ETC.; THAT THE ASSESSEE CLAIMS TO BE SUPPORTED BY VOUCHERS; (D) THAT THE PURCHASES AND EXPENDITURES THOUGH VOUCHED, THE VOUCHERS DO NOT GIVE FULL DETAILS OF PURCHASES/ WORK DONE AND DO NOT CONTAIN THE ADDRESSES AND SIGNATURE S OF THE RECIPIENTS OF CASH; ITA. NO. 1691/HYD/2012 SRI SOMA SRINIVAS REDDY =================== 3 (E) THAT THERE ARE INSTANCES OF EXPENDITURE INCURRED UN DER VARIOUS HEADS WHERE IT IS IMPOSSIBLE TO ASCERTAIN T HE VERACITY OF THE ENTRIES AND EXPENDITURE CLAIMED; (F) THAT THERE WAS NO STOCK REGISTER MAINTAINED FOR PURCHASES MADE AND THE ENTIRE PURCHASES WERE DEBITE D TO THE PROFIT AND LOSS ACCOUNT AND THESE WERE NOT CAPABLE OF VERIFICATION. 5. THE ASSESSING OFFICER, THEREFORE, REJECTED THE BOOK S OF ACCOUNT AND ESTIMATED THE INCOME AT 9% OF THE GROSS RECEIPTS RELATING TO MAIN CONTRACTS AND 2% IN RESPECT OF WOR KS WHICH HAD BEEN SUB-CONTRACTED, RELYING ON THE FOLLOWING D ECISIONS: (A) KNR CONSTRUCTIONS (ITA NO. 443/HYD/2007) (B) AMLESHWARI CONSTRUCTION (ITA NO. 9, 1141, 548/HYD/ 2007, DT. 30.11.2009. (C) TEJA CONSTRUCTIONS (ITA NO. 308/HYD/2009, DT. 23.10.2009). 6. ON APPEAL, THE CIT(A) CONFIRMED ORDER OF THE ASSESS ING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL B EFORE US. 7. WE HAVE HEARD THE LEARNED DR. IN THE PRESENT CASE, THE ASSESSING OFFICER ESTIMATED INCOME OF THE ASSESSEE AT 9% ON GROSS RECEIPTS RELATING TO MAIN CONTRACT WORKS AND 2% ON SUB- CONTRACT WORKS. THE DR RELIED ON THE ORDER OF THE TRIBUNAL DATED 27.12.2011 IN ITA NO. 871/HYD/2011 IN THE CAS E OF SAHITYA BUILDERS FOR A.Y. 2006-07, WHEREIN THE TRIB UNAL CONFIRMED INCOME OF THE ASSESSEE AT 10% OF THE GROS S RECEIPTS. HOWEVER, WE FIND THAT THE TRIBUNAL IS CONSISTENTLY PLACING RELIANCE ON THE ORDER OF THE TRIBUNAL IN THE CASE O F TEJA CONSTRUCTIONS VS. DCIT (129 TTJ 57) (UO) AND 36 DTR 220 WHEREIN THE TRIBUNAL CONFIRMED REJECTION OF BOOKS O F ACCOUNT ITA. NO. 1691/HYD/2012 SRI SOMA SRINIVAS REDDY =================== 4 AND AS THEY WERE NOT RELIABLE AND INCOME OF THE ASS ESSEE WAS ESTIMATED AS FOLLOWS: (A) OWN CONTRACT WORKS - 9% (B) CONTRACT TAKEN FROM SUB-CONTRACTOR - 8% (C) CONTRACTS GIVEN TO SUB-CONTRACTOR - 4% 8. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO EST IMATE THE INCOME OF THE ASSESSEE AS HELD IN THE CASE OF T EJA CONSTRUCTIONS (CITED SUPRA). HOWEVER, WE MAKE IT CL EAR THAT WHILE ESTIMATING AS ABOVE, THERE CANNOT BE ENHANCEM ENT OF INCOME AS COMPARED TO THE INCOME DETERMINED BY THE ASSESSING OFFICER. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2013. SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH JUNE, 2013 TPRAO COPY FORWARDED TO: 1. SRI SOMA SRINIVAS REDDY, C/O. SRI SAMUEL NAGADESI, CHARTERED ACCOUNTANT, 302, GOLDEN GREEN APARTMENTS, ERRAM MANZIL COLONY, PUNJAGUTTA, HYDERABAD-500 082. 2. THE ADDL. CIT, RANGE - 9, 2 - D, IT TOWERS, MASAB TANK, HYDERABAD-500 004. 3. THE CIT(A) - VI, HYDERABAD. 4. THE CIT - VI, HYDERABAD 5. THE DR 'A' BENCH, ITAT, HYDERABAD