Asst. Commissioner of Income Taxl, Circle-1, Kurnool V. Sri Subrahmaneswara Transport Contractors, Kurnool

ITA 1962/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7399 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 08-06-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 27-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT MUZUMDAR
• Assessee Lawyers: S RAMA RAO
• Section: 40(b); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES : BENCH B HYDERABAD (THROUGH VIDEO CONFERENCE ) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1 96 2 /HYD./201 8 A .Y : 201 0 - 11 A CIT, CIRCLE 1 VS. M/S SRI SUBRAHMANESWARA TRANSPORT CONTRACTORS KURNOOL KOILAKUNTLA [PAN: AAC FV1439L ] (APPELLANT) (RESPONDENT) FOR REVENUE: SHRI ROHIT MUZUMDAR, D.R. FOR ASSESSEE: SHRI S. RAMA RAO, ADV. DATE OF HEARING : 0 8 /06/ 2021 DATE OF PRONOUNCEMENT : 17 /0 8 /2021 O R D E R PER S.S. GODARA, J.M. TH IS REVENUES APPEAL FOR A.Y. 201 0 - 11 A RISE S AGAINST THE CIT(A) , KURNOOL S ORDER DATED 03.08.2018 PASSED IN CASE NO. 0 033 /2015 - 16, INVOLVING PROCEEDINGS U/S 143 (3) RWS 147 OF THE INCOME TAX ACT, 1961 [ IN SHORT THE ACT ]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUE HAS PLEADED THE FOLLOWING TWIN SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL ITA NO. 1962/HYD/2018 AY 2010 - 11 M/S SRI SUBRAMAESWARA TRANSPORT CONTRACTORS 2 2. THE LD.CIT(A) ERRED IN RESTRICTING THE ESTIMATION OF INCOME @ 3% OF GROSS RECEIPTS IN THE ABSENCE OF VOUCHERS AND BILLS FOR EXPENDITURE INCURRED. THE HONBLE ITAT , A BENCH, HYDERABAD IN THE CASE OF M/S SRI SAI RAM TRANSPORT VS DEPT OF INCOME TAX VIDE ITA NO 102/HYD/2013 WHEREIN IT WAS UPHELD TO ESTIMATE INCOME FROM TRANSPORT BUSINESS @ 5%. 3. WHETHER THE LDCIT(A) IS CORRECT IN ALLOWING THE PAYMENTS OF INTEREST AND SALARY TO THE PARTNER AS PER SEC. 40(B) OF THE ACT WHEN IT WAS HELD IN THE CASE OF INDWELL CONSTRUCTIONS VS CIT 232 ITR 776 (AP) THAT WHEN AN ESTIMATION OF INCOME IS MADE IT IS SUBSTITUTION OF INCOME COMPUTED IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SEC30 TO 4 3D OF THE ACT AND NO ADDITION/DELETION CAN BE MADE TO ESTIMATION OF INCOME. 3. COMING TO THE FORMER SUBSTANTIVE GROUND, THE REVENUES ONLY CASE IS THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING ASSESSEES ESTIMATION OF INCOME @ 3% ONLY THAN THAT @ 12.5% IN THE COURSE OF ASSESSMENT DATED 29.3.2015. IT QUOTES THIS TRIBUN ALS ORDER (SUPRA) THAT THE IMPUGNED ESTIMATION OUGHT TO HAVE BEEN UPHELD TO THE EXTENT OF 5%. WE FIND NO MERIT IN REVENUES INSTANT FIRST SUBSTANTIVE GRIEVANCE SINCE AN ESTIMATION OF PROFIT COMPONENT IS BASED ON PECULIAR FACTS OF THE CASE WHICH IS N OT A BINDING JUDICIAL PRECEDENT AS PER HONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT VS BR CONSTRUCTIONS (1993) 202 ITR 222 (AP). W E THUS DECLINE REVENUES INSTANT FIRST AND FOREMOST GRIEVANCE . 4. NEXT COMES THE REVENUES LATTER ARGUMENT THAT ASS ESSEE IS NOT ENTITLED FOR SEC . 40 ( B ) INTEREST AND SALAR Y TO PARTNER ( S ) ONCE ITS BOOKS HAVE BEEN REJECTED AS PER HONBLE JURISDICTIONAL HIGH COURTS DECISION (SUPRA). THE SAME IS ALSO F OUND CARRYING NO SUBSTANCE AS THEIR LORDSHIPS HAVE NEVER DEALT W ITH AN INSTANCE OF A STATUTORY DEDUCTION U/S 40(B) OF THE ACT. WE RATHER FIND THAT THE CASE LAW CIT VS. VIJAY CONSTRUCTIONS 213 CTR 105 (ALLA) HOLDS THAT A STATUTORY DEDUCTION NOT TO BE DISALLOWED MERELY BECAUSE THE ASSESSEES BOOKS ITA NO. 1962/HYD/2018 AY 2010 - 11 M/S SRI SUBRAMAESWARA TRANSPORT CONTRACTORS 3 HAVE BEEN REJECTED . WE THUS REFLECT REVENUES INSTANT LATTER SUBSTANTIVE GROUND AS WELL. 5. NO OTHER ARGUMENT HAS BEEN RAISED BEFORE US. THIS REVENUES APPEAL IS ACCORDINGLY DISMISSED . PRONOUNCED IN OPEN COURT ON 17 TH AUGUST, 2021 . SD/ - SD/ - (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 17 TH A UGUST, 2021. * GMV COPY OF THE ORDER FORWARDED TO: 1. A CIT, CIRCLE 1, KURNOOL . 2. M/S SRI SUBRAMANESWARA TRANSPORT CONTRACTORS, 10 - 62 - 1, BUS STAND ROAD, KOILAKUNTLA 518 134. 3. ACIT, RANGE 1 , KURNOOL . 4. CIT(A) , KURNOOL 5. PR . CIT , KURNOOL 6. DR, ITAT, HYDERABAD. 7. GUARD FILE.