Siva Ramakrishna Karuturu, Hyd, Hyderabad V. DCIT, Circle-6(1), Hyderabad, Hyderabad

ITA 179/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2340 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER I.T.A. NO. 179/HYD/2016 ASSESSMENT YEAR: 2010-11 SIVA RAMAKRISHNA KARUTURU, HYDERABAD [PAN: BHQPS9627D] VS DY. COMMISSIONER OF INCOME TAX, CIRCLE-6(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. RAGHAVENDRA RAO, AR FOR REVENUE : SHRI L. RAMJI RAO, DR DATE OF HEARING : 05-07-2017 DATE OF PRONOUNCEMENT : 12-07-2017 O R D E R PER V. DURGA RAO, J.M. : THIS APPEAL PREFERRED BY ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, HYDERABAD, DATED 22-12-2015 FOR THE AY. 2010-11. 2. THE FACTS IN BRIEF THAT ASSESSEE IS A CIVIL CONTRAC TOR, ENGAGED IN EXECUTION OF RAILWAY CONTRACTS WHICH ARE SUB-CONTR ACTED FROM M/S. VNR INFRASTRUCTURES LTD., HYDERABAD. DURING THE Y EAR, ASSESSEE HAS RECEIVED GROSS CONTRACT RECEIPTS OF RS. 3 2,52,83,880/- FROM M/S. VNR INFRASTRUCTURES LTD., HYDERABAD WHICH AR E TALLIED WITH THE TDS CERTIFICATE RECEIVED BY THE ASSESSEE. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASKED THE BOOKS OF ACCOUNT, VOUCHERS/BILLS FOR EXPENSES INCURRED. O N VERIFICATION OF THE MATERIAL PRODUCED BY THE ASSESSEE, AO HAS OBSERVE D THAT MANY OF THE BILLS/VOUCHERS ARE MADE IN CASH AND SELF-MADE . ACCORDINGLY, I.T.A. NO. 179/HYD/2016 :- 2 - : AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCO ME AT 6% SUB-CONTRACT RECEIPTS OF RS. 32,52,83,880/- AND WHICH WORKS OUT TO RS. 1,95,17,033/- AND ASSESSMENT WAS COMPLETED. AS SESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). LD.CI T(A) CONFIRMED THE ESTIMATION MADE BY THE AO. 3. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER BE FORE THE TRIBUNAL. 4. LD. COUNSEL FOR ASSESSEE HAS SUBMITTED THAT THE LD.CI T(A) WITHOUT GIVING FAIR OPPORTUNITY, ESTIMATED THE INCOME O F ASSESSEE AT 6% WHICH IS AT HIGHER SIDE. HE PRAYED THAT THE SAME MAY BE REDUCED TO 4%. LD. COUNSEL FOR ASSESSEE ALSO SUBMITT ED THAT THE LD.CIT(A) HAS FAILED TO ADJUDICATE THE GROUNDS RAISED BY THE ASSESSEE RELATING TO DEPRECIATION, CREDIT FOR THE TDS AMOUNTS PAID AND PRAYED THAT THE SAME MAY BE ADJUDICATED. 5. ON THE OTHER HAND, LD.DR HAS SUBMITTED THAT THE AO HAS RIGHTLY ESTIMATED THE INCOME OF ASSESSEE ON SUB-CONTRA CT RECEIPTS AT 6% AND SUBMITTED THAT THE SAME MAY BE UPHELD. SO FAR AS NON- ADJUDICATION OF GROUNDS RAISED BY ASSESSEE BEFORE TH E LD.CIT(A), THE DR HAS NOT RAISED ANY SERIOUS OBJECTION. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE RECOR DS AND ORDERS OF THE AUTHORITIES BELOW. ASSESSEE IS A SUB-CON TRACTOR EXECUTING RAILWAY CONTRACT WORKS. AO HAS ASKED ASSESSE E TO PRODUCE BOOKS OF ACCOUNT, VOUCHERS/BILLS FOR THE EXP ENSES INCURRED. ASSESSEE HAS FILED BOOKS OF ACCOUNT AND BI LLS AND VOUCHERS. THE AO AFTER EXAMINING THE SAME, CAME TO A CONCLUSION THAT THE BILLS/VOUCHERS SUBMITTED BY ASSESSEE ARE SELF-M ADE AND I.T.A. NO. 179/HYD/2016 :- 3 - : ASSESSEE HAS PAID CERTAIN AMOUNTS IN CASH. THEREFORE, THE AO REJECTED THE BOOKS OF ACCOUNT, ESTIMATED THE INCOME OF ASSESSEE AT 6% OF THE CONTRACT RECEIPTS. ON APPEAL BEFORE THE LD.CIT (A), ASSESSEE HAS NOT APPEARED. LD.CIT(A) CONFIRMED THE O RDER OF THE AO. WE FIND THAT ESTIMATION MADE BY THE AO IS ON HIGH ER SIDE. IN OUR OPINION, ESTIMATION OF INCOME FROM THE SUB-CONTRACT RECEIPTS AT 5% IS FAIR AND REASONABLE. ACCORDINGLY, WE DIRECT TH E AO TO ESTIMATE THE INCOME AT 5% NET OF ALL OTHER DEDUCTIONS. 7. ANOTHER ARGUMENT RAISED BY THE LD. COUNSEL FOR AS SESSEE IS THAT THE AO HAS NOT GRANTED CREDIT FOR TDS OF MAIN CONTRAC TS PAID BY ASSESSEE. WE FIND THAT THIS ASPECT NEITHER CONSIDE RED BY THE AO NOR BY CIT(A). THEREFORE, IN OUR OPINION, IT IS NECE SSARY TO BE ADJUDICATED BY THE AO. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD.CIT(A) AND DIRECT THE AO TO ADJUDICATE THE IS SUE RELATING TO GRANTING OF CREDIT FOR TDS IN ACCORDANCE WITH LAW. 8. SO FAR AS THE DEPRECIATION IS CONCERNED, WE HAVE ALREADY DIRECTED THE AO TO ESTIMATE THE INCOME AT 5% NET OF ALL O THER DEDUCTIONS. IN VIEW OF THE ABOVE, THE ISSUE OF DEPREC IATION, NO SEPARATE ADJUDICATION IS REQUIRED. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JULY, 2017 SD/- SD/- (D.S. SUNDER SINGH) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED 12 TH JULY, 2017 TNMM I.T.A. NO. 179/HYD/2016 :- 4 - : COPY TO : 1. SIVA RAMAKRISHNA KARUTURU, C-57, I.D.P.L. COLONY , BALANAGAR TOWNSHIP, HYDERABAD. 2. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-6(1), HYDERABAD. 3. CIT (APPEALS)-4, HYDERABAD. 4. PR.CIT-4, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.