P. Venkata Rami Reddy, Hyd, Hyderabad V. ITO, Ward-2, Nandyal

ITA 1920/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61945 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-06-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K VISWSANATHAM
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1920/HYD/2011 : ASSESSMENT YEAR 2008-09 SHRI P.V E NKATA RAMI REDDY, NANDYAL, KURNOOL DIST. ( PAN - AJQPP 1863 P ) V/S INCOME - TAX OFFICER, WARD - 2, NANDYAL. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.A.SAI PRASAD RESPONDENT BY : SHRI K.VISWSANATHAM DATE OF HEARING 27.6.2012 DATE OF PRONOUNCEMENT 28.6.2012 O R D E R PER D.KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IV, HYDERAB AD DATED 24.8.2011, FOR THE ASSESSMENT YEAR 2008-09. 2. THOUGH AS MANY AS 11 GROUNDS HAVE BEEN RAISED B Y THE ASSESSEE IN THIS APPEAL, GROUNDS NO.1 AND 11 ARE GE NERAL, AND AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE DID NO T PRESS FOR GROUNDS AGAINST SL.NOS.2 TO 7. HENCE THESE GROUNDS ARE REJ ECTED. REMAINING EFFECTIVE GROUNDS THAT SURVIVE FOR ADJUDICATION OF THE ASSESSEE IN THIS APPEAL READ AS FOLLOWS- 8. THE CIT(A) ERRED IN UPHOLDING THE RATE OF PROFI T ESTIMATED BY THE ASSESSING OFFICER AT 8% WHICH IS ARBITRARY A ND ON HIGH SIDE. 9. THE CIT(A) SHOULD HAVE CONSIDERED AND DELETED TH E INTEREST LEVIED U/S. 234A AND B OF THE IT ACT AS THE CASE DO ES NOT WARRANT LEVY OF INTEREST. ITA NO.1920/HYD/2011 SHRI P.VENKATA RAMI REDDY, NANDYAL, KURNOOL DIST. 2 10. THE CIT(A) SHOULD HAVE CONSIDERED AND DIRECTED THE ASSESSING OFFICER NOT TO LEVY PENALTY U/S. 271(1)(C ) OF THE ITA ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THUS, THE MAIN ISSUE THAT SURVIVES FOR CONSIDERATIO N IS REASONABLENESS OF THE G.P. RATE OF 8% ADOPTED BY THE ASSESSING OFFICE R AND CONFIRMED BY THE CIT(A) FOR ESTIMATING THE BUSINESS INCOME OF TH E ASSESSEE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE, REITERATI NG THE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES, SUB MITTED THAT ESTIMATION OF INCOME OF THE ASSESSEE ADOPTING A RATE OF 8% IS ON HIGHER SIDE AND THE SAME HAS TO BE SUBSTANTIALLY REDUCED. 4. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESE NTATIVE, STRONGLY RELIED ON THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES. 5. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF T HE LOWER AUTHORITIES AND OTHER MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS ENGAGED IN CARRYING ON CONTRACT WORKS, MOSTLY ROAD CONTRACT WORKS. THE ASSESSING OFFICER OBSERVING THAT THE AS SESSEE - (1) HAS NOT PRODUCED BOOKS OF ACCOUNT FOR VERIFICATION BY THE D EPARTMENT; (2) HAS NOT PRODUCED PROPER AND FULL VOUCHERS AND BILLS FOR VER IFICATION OF THE CORRECTNESS AND GENUINENESS OF THE EXPENDITURE CLAI MED; (3) HAS NOT PRODUCED PARTY-WISE PAYMENTS AS ASKED FOR; (4) HAS NOT CORRELATED THE EXPENDITURE CLAIMED UNDER VARIOUS HEADS, AS ANALYSE D WITH REFERENCE TO THE NATURE OF WORK CARRIED OUT AND WITH REFERENCE T O THE DAY TO DAY WORKS OR AT LEAST ON PERIODIC BASIS WORK CARRIED OUT; (5 ) HAS NOT FURNISHED BIFURCATION FOR THE EXPENDITURE CLAIMED UNDER MATER IAL, LABOUR AND OTHER ITEMS OF EXPENDITURE; AND (6) HAS NOT FURNISHED DET AILS OF SUNDRY CREDITORS, REJECTED THE BOOK RESULTS OF THE ASSESSE E UNDER S.145(3) AND ESTIMATED THE INCOME OF THE ASSESSEE AT 8% OF THE G ROSS BILLS RECEIVED OF RS.4,08,26,060, WHICH WORKED OUT TO RS.32,66,084. ON APPEAL, THE ITA NO.1920/HYD/2011 SHRI P.VENKATA RAMI REDDY, NANDYAL, KURNOOL DIST. 3 CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER I N REJECTING THE BOOK RESULTS AND ESTIMATING THE INCOME OF THE ASSESSEE F ORM CONTRACT WORKS AT 8% OF THE GROSS BILLS RECEIVED. 6. ON CAREFUL CONSIDERATION OF THE MATTER, WE FIN D THAT THE REASONS RECORDED BY THE LOWER AUTHORITIES FOR REJEC TING THE BOOK RESULTS OF THE ASSESSEE ARE REASONABLE AND THE CIT(A) HAS PASS ED A WELL-REASONED ORDER FOR UPHOLDING THE INCOME OF THE ASSESSEE ESTI MATED BY THE ASSESSING OFFICER APPLYING A RATE OF 8% OF THE GROS S BILLS RECEIVED. SINCE THE RATE OF 8% ADOPTED IS REASONABLE AND IN CONSONA NCE WITH THE VIEW TAKEN BY THE VARIOUS BENCHES OF THIS TRIBUNAL IN SI MILAR MATTERS, AS IN THE CASE OF ARIHANT BIILDERS, DEVELOPERS AND INVESTORS P. LTD. V/S. ACIT (106 ITD 10), NOTED BY THE CIT(A) IN THE IMPUGNED ORDER, WE FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CI T(A) ON THIS ISSUE. WE ACCORDINGLY CONFIRM THE SAME AND DISMISS THE GROUND NO.8 OF THE ASSESSEE. 7. GROUND NO.10 RELATING TO CHARGING OF INTEREST U NDER S.234A AND B IS CONSEQUENTIAL; AND GROUND NO.11 RELATING T O PENALTY UNDER S.271(1)(C) DOES NOT ARISE FOR CONSIDERATION IN TH ESE PROCEEDINGS ARISING OUT OF THE QUANTUM OF ASSESSMENT, AND CONSEQUENTLY, THESE GROUNDS ARE ALSO LIABLE TO BE DISMISSED. WE DISMISS THE SAME A CCORDINGLY. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 28.6.2012 SD/- SD /- (SAKTIJIT DEY) (D.KARUNAKARA RAO) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 28TH JUNE 2012 ITA NO.1920/HYD/2011 SHRI P.VENKATA RAMI REDDY, NANDYAL, KURNOOL DIST. 4 COPY FORWARDED TO: 1. 2. 3 4. 5. SHRI P.VENKATA RAMI REDDY (NANDYAL, KURNOOL DIST) C/O. M/S. B.NARSING RAO & CO., CHARTERED ACCOUNTANT PLOT NO.554, ROAD NO.92, JUBILEE HILLS, HYDERABAD 9 6. INCOME TAX OFFICER, WARD-2, NANDYAL COMMISSIONER OF INCOME-TAX(APPEALS) IV HYDERABAD COMMISSIONER OF INCOME-TAX III, HYDERABAD DEP ARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S. 1. DATE OF DICTATION 27.6.2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SENIOR P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER AND OTHER MEMBER 27.6.2012 5. DATE ON WHICH THE FAIR ORDER GOES TO THE SR. P.S. 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8. DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR 9. DATE OF THE DESPATCH OF THE TRIBUNAL ORDER