Datin Infrastructure Private Limited, Hyderabad, Hyderabad V. ITO, Ward-17(1), Hyderabad, Hyderabad

ITA 1725/HYD/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6068 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-05-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 23-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D PRASAD RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

ITA NO 1725 OF 2016 DATIN INFRASTRUCTURE P LTD HYDERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1725/HYD/2016 (ASSESSMENT YEAR: 2012-13) DATIN INFRASTRUCTURE PRIVATE LIMITED HYDERABAD PAN: AADCD2795B VS INCOME TAX OFFICER WARD 17(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO FOR REVENUE : SHRI D. PRASAD RAO, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2012-13 AGAIN ST THE ORDER OF THE CIT (A)-5, HYDERABAD, DATED 30.09. 2016. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1) THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS T O THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. 2) THE LEARNED CIT (A) ERRED IN CONFIRMING THE ACTI ON OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACC OUNT AND IN APPLICATION OF THE PROVISIONS OF SEC.145 OF THE I.T. ACT. 3) THE LEARNED CIT (A) ERRED IN DIRECTING THE ASSES SING OFFICER TO ESTIMATE THE NET INCOME AT 8% WITHOUT CONSIDERING THE FACT THAT THE APPELLANT IS IN THE B USINESS OF CONSTRUCTION INVOLVING ERECTION AND LAYING OF TRANSMISSION LINES ON SUB CONTRACT BASIS. THE LEARN ED CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE DATE OF HEARING: 31.05 . 201 8 DATE OF PRONOUNCEMENT: 08.06.2018 ITA NO 1725 OF 2016 DATIN INFRASTRUCTURE P LTD HYDERABAD. PAGE 2 OF 4 ACTIVITY CARRIED ON BY THE APPELLANT IS SUB CONTRAC T WORKS AND THAT THE PROFIT RATE OF 8% IS NOT REASONA BLE. 4) THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TION U/S 68 OF THE I.T. ACT OF RS.40,00,000/- BEING THE AMOUNT BORROWED ON SHORT TERM BASIS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY, ENGAGED IN THE BUSINESS OF UNDERTAKING CIVIL CONTRA CTS, HAD FILED ITS RETURN OF INCOME FOR THE A.Y 2012-13 ON 30.09.2 012 DECLARING AN INCOME OF RS.4,02,910. DURING THE ASSESSMENT PRO CEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT THE ASS ESSEE COMPANY HAS SHOWN GROSS RECEIPTS AT RS.5,72,67,014 AS AGAIN ST WHICH, THE NET PROFIT OF RS.45,87,089 HAS BEEN SHOWN. HOWEVER, HE NOTICED THAT IN FORM NO.26AS, THE GROSS RECEIPTS ARE SHOWN AS RS.5,82,63,409. THE ASSESSEE WAS THEREFORE, ASKED T O EXPLAIN THIS DISCREPANCY. SINCE THE ASSESSEE COULD NOT EXPLAIN THE DISCREPANCY, THE AO REJECTED THE BOOKS OF ACCOUNT A ND TREATED THE SUM OF RS.5,82,63,409 AS ASSESSEES GROSS RECEIPTS AND ESTIMATED THE PROFIT AT 12.5% OF THE GROSS RECEIPTS AND ALSO MADE AN ADDITION OF RS.75,92,353 TOWARDS UNEXPLAINED CREDIT S. AGAINST THE ADDITIONS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A), WHO GRANTED PARTIAL RELIEF BY REDUCING THE GROSS PR OFIT TO 8% OF THE GROSS RECEIPTS AND CONFIRMED THE ADDITION MADE U/S 68. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MAINTAINING PROPER BOOKS OF ACCOUNT AND THEREFORE, THE BOOKS OF ACCOUNT OUGH T NOT TO HAVE BEEN REJECTED. WITHOUT PREJUDICE TO THE ABOVE, HE A LSO SUBMITTED THAT THE ASSESSEE ITSELF HAS REPORTED LITTLE MORE T HAN 8% OF THE ITA NO 1725 OF 2016 DATIN INFRASTRUCTURE P LTD HYDERABAD. PAGE 3 OF 4 GROSS RECEIPTS AS ITS INCOME. AS REGARDS THE ADDITI ON OF UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT, HE RELI ED UPON THE CONTENTIONS MADE BY THE ASSESSEE BEFORE THE AUTHORI TIES BELOW. 4. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE CIT (A) HAS REDUCED THE GROSS PROFIT TO 8% OF THE GROSS RECEIPTS AND THE REVENUE IS IN APPE AL BEFORE US. AS FAIRLY ADMITTED BY THE LEARNED COUNSEL FOR THE A SSESSEE, THE INCOME RETURNED BY THE ASSESSEE IS A LITTLE MORE TH AN 8% OF THE GROSS RECEIPTS. THEREFORE, WE SEE NO REASON TO INTE RFERE WITH THE ORDER OF THE CIT (A). 6. AS REGARDS THE UNEXPLAINED CREDITS U/S 68, WE FI ND THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM WITH ANY EVIDENCE EITHER BEFORE THE AUTHORITIES BELOW OR BEFORE US. IN VIEW OF THE SAME, WE SEE NO REASON TO INTERFERE WIT H THE ORDER OF THE CIT (A) ON THIS ISSUE. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JUNE, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT ME MBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 8 TH JUNE 2018. VINODAN/SPS ITA NO 1725 OF 2016 DATIN INFRASTRUCTURE P LTD HYDERABAD. PAGE 4 OF 4 COPY TO: 1 SHRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA'S ELEGANCE, 3-6- 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 ITO WARD 17(1) SIG NATURE TOWERS, KONDAPUR, HYDERABAD 3 CIT (A)-5 HYDERABAD 4 PR. CIT 5, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER