TBPR Infra Projects Private Limited , Nirmal V. Asst. Commissioner of Income Tax, Circle-2(2), Hyderabad

ITA 2014/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5262 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 25-03-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 08-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MOHD FAZAL
• Keywords: Depreciation
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. 2014 /HYD/2018 (ASSESSMENT YEAR : 201 3 - 14 ) M/S. T BPR INFRA PROJECTS PVT. LTD., # 205, INDRAPRASTHA APARTMENTS, OPP. ESI HOSPITAL, NEAR AG COLONY WATER TANK, ERRAGADDA, HYDERABAD. PAN AACCT 6542K VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(2), HYDERABAD. APPELLANT RESPONDENT APPELLANT BY : SHRI MOHD. FAZAL. RESPONDENT BY : SHRI SUNIL KUMAR PANDEY (D.R) DATE OF HEARING : 25.03.2021 . DATE OF PRONOUNCEMENT : 03.05 .2021. O R D E R PER SHRI S.S. GODARA, J.M. : THIS ASSESSEES APPEAL FOR THE ASST. YEAR 2014 - 15 ARISES FROM THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , HYDERABAD S ORDER DT. 13.12.2017 PASSED IN THE CASE OF APPEAL 2 ITA NO. 2014 / HYD / 2018 NO. 0013/CIT(A) - 2/HYD/2016 - 17 IN THE PROCEEDINGS UNDER SECTION 143(3) OF INCOME TAX ACT, 1961 (THE ACT) . HEARD BOTH THE PARTIES . C ASE FILE PERUSED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS AGAINST THE LAW, WEIGHT OF EVIDENCE A ND PROBABILITIES OF CASE. 2. THE LEARNED COMMISSIONER ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER, WHEREIN, INCOME WAS ESTIMATED AT RS.5,17,89,991/ - BEING 8% OF THE GROSS RECEIPTS OF RS.5,50,92,786/ - . 3. THE LEARNED COMMISSIONER OUGHT TO HAVE APPRECIATED OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE HAS ALLOTTED MOST OF THE WORK TO THE SUBCONTRACTORS, THEREFORE, THERE IS NO SCOPE OF EARNING INCOME AT 8% OF GROSS RECEIPTS. 4. THE LEARNED COMMISSIONER OUGHT TO HAVE APPRECIATED IN THE EARLIER YEARS WHICH ARE ACCEPTED BY THE DEPARTMENT, THE PROFIT RATE NEVER TOUCHED THE RATE OF 8%, THEREFORE, THE SAME RATE SHOULD HAVE BEEN ACCEPTED AS ACCEPTED IN THE EARLIER YEARS. 5. THE LEARNED COMMISSIONER ERRED IN NOT FOLLOWING THE RATIONALE OF THE JURISDICTIONA L ITAT DECISION IN THE CASE OF M/S. TEJA CONSTRUCTIONS VS ACIT, 129 TTJ 0057 (HYD - TRIB). 6. THE LEARNED COMMISSIONER IN NOT ALLOWING THE DEPRECIATION AS CLAIMED BY THE ASSESSEE AT RS.67,89,938/ - WHICH IS ALLOWABLE EVEN WHEN THE PROFIT IS ESTIMATED AS PER THE BOARD CIRCULAR NO.29D DT: 31.08.1965. 3 ITA NO. 2014 / HYD / 2018 7. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR MODIFY THE ABOVE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL, IF IT IS CONSIDERED NECESSARY. 3. COMING TO THE FORMER ISSUE OF ESTIMATION OF ASSESSEE'S PROFIT @ 8% QUA GR OSS RECEIPTS OF RS.64.73 CRORES IN CIVIL CONSTRUCTION BUSINESSES, THE CIT(APPEALS) LOWER APPELLATE DISCUSSION CONFIRMING THE A.OS ACTION TO THIS EFFECT READ AS UNDER : 2. THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF EXECUTING CIVIL CONTRACT WO RKS FROM THE STATE GOVERNMENT (PRIMARILY OF MODERNIZATION OF CANALS AND RELATED IRRIGATION WORKS). THE APPELLANT DECLARED TOTAL INCOME OF RS. 3.30 CRORES IN THE RETURN OF INCOME FILED ON A TURNOVER OF RS. 64.73 CRORES. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE AO SOUGHT VARIOUS DETAILS INCLUDING THE PRODUCTION OF BOOKS OF ACCOUNTS, BILLS AND VOUCHERS, ETC. SINCE THE APPELLANT FAILED TO PRODUCE THE SPACE LEFT INTENTIONALLY.. 4 ITA NO. 2014 / HYD / 2018 5 ITA NO. 2014 / HYD / 2018 6 ITA NO. 2014 / HYD / 2018 AT 8% OF THE RECEIPTS (INCLUDING ALLOWANCE OF DEPRECIATION) IS THEREFORE UPHELD AND THE GROUNDS OF APPEAL ARE DISMISSED. 4. L EARNED COUNSEL S FIRST ARGUMENT IS THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN ASSESSING THE ASSESSEE'S SUB - CONTRACT RECEIPTS AT UNIFORM RATE OF 8% A LIKE CONTRACTUAL RATES HAVING VERY HIGH PROFIT RATE AND THEREFORE, THE SAME IS NOT LIABLE TO BE UPHELD AS PER THE T RIBUNAL DECISION IN M/S. TEJA CONSTRUCTION (SUPRA). 5. LEARNED COUNSEL NEXT INVITED OUR ATTENTION TO THE ASSESSEE'S DETAILED PAPER BOOK IN PAGES 49 TO 75 INTER ALIA CONTAINING THE DETAILS OF BILLS RECEIVED AND WORK ALLOTTED TO THE SUB - CONTRACTOR, PERCENT AGE OF COMMISSION, COPIES OF THE CORRESPONDING LEDGER ACCOUNTS AND STATEMENT SHOWING PARTY - WISE SUB - CONTRACTS; RESPECTIVELY. LEARNED DEPARTMENT REPRESENTATIVE FAILED TO DISPUTE THAT ALL THESE CLINCHING ASPECTS HAVE NOWHERE BEEN CONSIDERED EITHER IN THE AS SESSMENT OR IN THE CIT(APPEALS) DETAILED DISCUSSION. WE, THEREFORE, UPHOLD THE LEARNED LOWER AUTHORITIES ACTION TO THE LIMITED EXTENT OF ASSESSM ENT OF 8% OF ASSESSEE'S RECEIPTS FROM CIVIL CONSTRUCTION 7 ITA NO. 2014 / HYD / 2018 CONTRACTS AND REMIT THE REMAINING SUB - CONTRACT COMPON ENT RECEIPTS AS PER FACTUAL VERIFICATION TO BE FOLLOWED BY 5% ESTIMATION THEREUPON IN CONSEQUENTIAL PROCEEDINGS TO THE ASSESSING OFFICER. IT IS MADE CLEAR THAT THE ASSESSEE OR ITS AUTHORIZED REPRESENTATIVE SHALL APPEAR BEFORE THE ASSESSING OFFICER ON OR B EFORE 1.9.2021 WITH ALL THE RELEVANT DETAILS OF ITS SUB - CONTRACTS TO BE FOLLOWED BY THREE EFFECTIVE OPPORTUNITIES OF HEARING AT ITS OWN RISK AND RESPONSIBILITY. THE ASSESSEE'S FIRST TO FIFTH SUBSTANTIVE GROUNDS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. 6. THE ASSESSEE'S SIXTH SUBSTANTIVE GROUND SEEKS TO RAISE DEPRECIATION OF RS.67,89,938 ALLEGEDLY DECLINED IN THE COURSE OF ASSESSMENT FOR THE REASON THAT THE SAME DOES NOT APPLY IN THE CASE OF REJECTION OF BOOKS FOLLOWED BY ESTIMATI ON OF PROFITS. WE, PRIMA FACIE, NOTICE IN THIS FACTUAL BACKDROP THAT CBDT CIRCULAR NO.29D DT.31.08.1965 HAS ALREADY ISSUED NECESSARY DIRECTION S TO THE FIELD AUTHORITIES IN TAXPAYER S FAVOUR QUA THE SAME. WE THEREFORE DIRECT THE ASSESSING OFFICER TO CONSI DER THE ASSESSEE'S INSTANT LATTER ISSUE AFRESH AS PER LAW IN THE LIGHT OF FOREGOING 8 ITA NO. 2014 / HYD / 2018 CBDTS CIRCULAR . THE ASSESSEE'S SIXTH SUBSTANTIVE GROUND IS ACCEPTED FOR STATISTICAL PURPOSES. 7. THIS ASSESSEE'S APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MAY , 2021. SD/ - SD/ - (LAXMI PRASAD SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 03.05 .2021. * REDDY GP COPY TO : 1. M/S. TBPR INFRA PROJECTS PVT. LTD., # 205, INDRAPRASTHA APARTMENTS, OPP. ESI HOSPITAL, NEAR AG COLONY WATER TANK, ERRAGADDA, HYDERABAD. 2. ACIT, CIR.2(2), HYDERABAD. 3. PR. C I T - 2 , HYDERABAD. 4. CIT(APPEALS) - 2 , HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD. P