Ashok Kumar Punjala, R.R.Dist, R.R.Dist V. ITO, Ward-8(2), Hyderabad, Hyderabad

ITA 187/HYD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2271 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-12-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit
• Section: 44AD; 143(3); 144

Judgement Text

9IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 187/HYD/2015 ASSESSMENT YEAR: 2009-10) SHRI ASHOK KUMAR PUNJALA, KATTEDAN, RR DIST. PAN AFKPP0948M VS. INCOME TAX OFFICER, WARD- 8(2), HYDERABAD. (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SMT N. SWAPNA DATE OF HEARING : 06-12-2017 DATE OF PRONOUNCEMENT : 22-12-2017 ORDER PER P. MADHAVI DEVI, J.M.: IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE ESTIMATION OF INCOME AT 12.50% OF THE RECEIPTS BY THE A.O 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE, AN INDIVIDUAL, ENGAGED IN EXECUTING CIVIL CONTRACTS, HE FILED HIS RETURN OF INCOME FOR THE A.Y 2009-10 ON 06-12-2010 ADMITTING A TOTAL INCOME OF RS. 15,98,330/-. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, VARIOUS DETAILS WERE CALLED FOR, BUT, THE ASSESSEE DID NOT FURNISH ANY INFORMATION. THEREFORE, THE ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT BY TREATING THE CASH DEPOSITS AS UNEXPLAINED CASH CREDITS AND ALSO NET PROFIT FROM THE CONTRACT WAS ESTIMATED @ 12.50% OF THE RECEIPTS. AGAINST 2 ITA .NO.187/HYD/2015, SHRI ASHOK KUMAR PUNJALA, RR DIST., THE ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO GRANTED RELIEF AS FAR AS UNEXPLAINED CASH CREDITS ARE CONCERNED BUT AS FAR AS THE ESTIMATION OF INCOME IS CONCERNED HE CONFIRMED THE ORDER OF THE A.O. THE ASSESSEE IS IN SECOND APPEAL BEFORE US AGAINST THE ESTIMATION OF INCOME. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN SIMILAR CASES OF CIVIL CONTRACTS, WHERE THE ASSESSEE IS A MAIN CONTRACTOR, THIS TRIBUNAL HAS BEEN ESTIMATING THE INCOME @ 8% OF RECEIPTS AS NET PROFIT AND PRAYED THAT SIMILAR RELIEF MAY BE GRANTED TO THE ASSESSEE. WE REQUIRED ASK THE ASSESSEE TO FILE THE COPIES OF THE RETURN OF INCOME FOR THE EARLIER ASSESSMENT YEAR, TO VERIFY THE NET PROFIT OFFERED BY THE ASSESSEE. ASSESSEE HAS FILED THE COPY OF THE SAME AND IT IS SEEN THAT THE ASSESSEE HAS OFFERED NET PROFIT OF 7.43% FOR THE A.Y 2008-09. 4. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS TO JUSTIFY AS TO WHY THE NET PROFIT SHOULD BE ESTIMATED AT LESS THAN 12.50%. THE LD. DR ALSO PLACED RELIANCE ON THE DECISIONS OF THE TRIBUNAL IN THE CASE OF M/S KNR CONSTRUCTIONS LTD., IN ITA NO. 1145/HYD/2005, WHEREIN THE INCOME HAS BEEN ESTIMATED @ 12.50% OF THE GROSS RECEIPTS. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL PLACED ON RECORD, WE FIND THAT THE DECISIONS ON WHICH THE LD. DR HAS PLACED RELIANCE UPON ARE FOR THE A.YS 2001-02 AND 2003-04, WHEREAS THE ASSESSMENT YEAR BEFORE US IS A.Y 2009-10. THE TRIBUNAL, IN RECENT CASES, HAS HELD 3 ITA .NO.187/HYD/2015, SHRI ASHOK KUMAR PUNJALA, RR DIST., THAT WHERE THE ASSESSEE IS THE MAIN CONTRACTOR, AND HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT, THE NET PROFIT HAS TO BE ESTIMATED AND TAKING GUIDANCE FROM THE PROVISIONS OF SEC. 44AD OF THE ACT, THE INCOME IS DIRECTED TO BE ESTIMATED @ 8% OF THE GROSS RECEIPTS. THEREFORE, WE DIRECT THE A.O TO RE-COMPUTE THE INCOME BY ESTIMATING THE NET PROFIT OF THE ASSESSEE @ 8% OF THE GROSS RECEIPTS. ACCORDINGLY, THE APPEAL IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2017. SD/- SD/- (S. RAFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 22 ND DECEMBER, 2017. KRK 1) SHRI ASHOK KUMAR PUNJALA, H. NO.4-104, SAIBABA NAGAR, KATT EDAN, RANGA REDDY DIST 2) ITO, WARD-8(2), HYDERABAD. 3) CIT(A) -2, HYDERABAD 4) THE CIT 2, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE.