KNR Contractors Private Limited, Hyderabad V. Income Tax Officer, Ward-2(1), Hyderabad

ITA 2253/Hyd/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9311 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 30-12-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 28-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Agreed addition; TDS
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER I.T.A. NOS.2252 & 2253/HYD/2017 ASSESSMENT YEARS: 2012-13 & 2013-14 KNR CONTRACTORS PRIVATE LIMITED, HYDERABAD [PAN: AADCK7749J] VS THE INCOME TAX OFFICER, WARD-2(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : NONE FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 30-12-2020 DATE OF PRONOUNCEMENT : 04-01-2021 O R D E R PER S.S.GODARA, J.M. : THESE TWO ASSESSEES APPEALS FOR AYS.2012-13 & 2013 -14 ARISE FROM THE CIT(A), HYDERABADS ORDERS DATED 26-06 -2017 & 31-03-2017 PASSED IN CASE NO.0143/ITO, WARD-2(1)/20 16-17 & 0144/ITO, WARD-2(1)/2016-17 RESPECTIVELY IN PROCE EDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. CASES CALLED TWICE. NOBODY APPEARED AT ASSESSEES BEHEST. THESE TWO APPEALS ARE TAKEN UP FOR ADJUDICATIO N EX-PARTE THEREFORE . 2. FOR THE REASONS STATED IN THE ASSESSEES CONDONATION PETITIONS/AFFIDAVITS FILED ON 6-07-2018 ATTRIBUTING DELA Y OF 68 DAYS AND 165 DAYS (APPEAL-WISE); RESPECTIVELY, TO HE ALTH ISSUES ITA NOS. 2252 & 2253/H/17 :- 2 -: OF THE DELIQUENT PERSON IN AUDITORS OFFICE, WE QUOTE HON'BLE APEX COURTS DECISION OF COLLECTOR, LAND ACQUISITION VS. MST.KATIJI & ORS [167 ITR 471] (SC) THAT THE CAUSE OF SUBSTANTIVE JUSTICE MUST PREVAIL OVER ALL TECHNICAL ASP ECTS AND ACCEPT THE ASSESSEES TWIN PETITIONS HEREIN-ABOVE. BOTH THESE APPEALS ARE TAKEN UP FOR ADJUDICATION ON MERITS. 3. COMING TO THE SOLE ISSUE WE RAISED IN ASSESSEES F ORMER APPEAL ITA NO.2252/HYD/2017 (AY.2012-13), CHALLENGI NG THE LOWER AUTHORITIES ACTION ESTIMATING ITS INCOME @8% AN D 7% IN CASE OF CONTRACT AND SUB-CONTRACT RECEIPTS; RESPECTIVELY IN CIVIL CONTRACTOR BUSINESS; RESULTING IN COMPUTATION OF TOTAL IN COME AS RS.2,58,93,067/- AS AGAINST THAT DECLARED OF RS.1,98,02,080/-, THE CIT(A)S DETAILED DISCUSSION, F OLLOWING THE TRIBUNALS ORDER ITSELF FOR THE AY.2009-10 READS AS UNDER: 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY, ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, FILED ITS RETUR N OF INCOME FOR AY 2012-13 ON 29.09.2012 ADMITTING TOTAL INCOME OF RS. 1,98,02,080/-. DURING THE ASSESSMENT PROCEEDINGS IT WAS NOTICED TH AT INVOICES RELATING TO THE EXPENSES WERE NOT PROPERLY VOUCHED AND HENCE THE EXPENDITURE WAS NOT VERIFIABLE. WHEN QUESTIONED, IT WAS EXPLAINED THAT DUE TO EXECUTION OF WORKS IN REMOTE AREAS PROP ER BILLS COULD NOT BE OBTAINED AND HENCE THE EXPENDITURE WAS LATER REG ULARIZED BY RAISING SELF VOUCHERS. AFTER CONSIDERING THE EXPLAN ATION OF THE ASSESSEE AND AFTER TAKING INTO THE ORDER OF HON'BLE ITAT IN THE ASSESSEE'S OWN CASE FOR A.Y. 2009-10, WHEREIN ESTIM ATION OF INCOME AT 8% ON DIRECT CONTRACTS AND 7% ON SUB-CONTRACTS W AS UPHELD. ASSESSING OFFICER WENT ON TO ESTIMATE THE INCOME AT 8% ON CONTRACT AND 7% ON SUB-CONTRACTS. THUS THE TOTAL INCOME WAS ASSESSED AT RS.2,58,93,067/- AS AGAINST RS.1,98,02,080/- RETURN ED BY THE ASSESSEE. AS PER THE ASSESSING OFFICER, ASSESSEE A LSO AGREED TO THIS ESTIMATION. IT IS AGAINST THIS ASSESSMENT THAT THE PRESENT APPEAL IS FILED. ITA NOS. 2252 & 2253/H/17 :- 3 -: 4. DURING THE APPELLATE PROCEEDINGS IT IS CONTENDED THAT THE ASSESSEE NEVER AGREED TO THE SAID ESTIMATION AS POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT IS FURTHER ARGU ED THAT THE FACTS DURING THE YEAR UNDER CONSIDERATION ARE DIFFERENT F ROM THAT OF A.Y.2009-10 AS THERE IS INCREASE IN THE PRICE OF ST EEL AND CEMENT. THEREFORE, IT IS SUBMITTED THAT THE DECISION OF HON 'BLE ITAT FOR A.Y.2009-10 CANNOT BE APPLIED IN TOTO FOR THE PRESE NT ASSESSMENT YEAR. I HAVE CONSIDERED THE ARGUMENTS OF THE ASSESS EE AND HAVE GONE THROUGH THE FACTS OF THE CASE. IT IS NOT DISPUTED T HAT MAJORITY OF THE WORKS WHICH WERE UNDERTAKEN IN A.Y.2009-10 ARE STIL L CONTINUING. THEREFORE, THE DECISION OF THE HON'BLE ITAT FOR A.Y .2009-10 STILL HOLDS GOOD. FURTHER, FROM THE PERUSAL OF ASSESSMENT RECO RDS IT IS SEEN THAT THE ASSESSEE AGREED TO THE ADDITION DURING THE ASSE SSMENT PROCEEDINGS. IT ALSO NEEDS TO BE NOTED THAT THE ASS ESSEE IS NOT DISPUTING REJECTION OF BOOK RESULTS. EVEN DURING TH E APPELLATE PROCEEDINGS IT IS NOT THE PLEA OF THE ASSESSEE THAT HE CAN SUBSTANTIATE THE EXPENDITURE BY PRODUCING COMPLETE BILLS AND VOU CHERS. ASSESSEE IS ONLY ASKING FOR THE PERCENTAGE OF ESTIMATION TO BE RECONSIDERED AND REDUCED. HOWEVER, IT IS SEEN THAT THE ASSESSING OFF ICER HAS BASED HIS ESTIMATE ON THE FINDINGS OF HON'BLE ITAT IN THE ASS ESSEES OWN CASE AND THE ASSESSEE HAS AGREED TO THE ADDITION DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, I DO NOT SEE ANY REASON TO INTERFERE WITH THE ESTIMATION MADE BY THE ASSESSING OFFICER AND HENCE THE SAME IS UPHELD. THERE IS NO DISTINCTION ON FACTS OR LAW POINTED OUT IN ALL THESE ASSESSMENT YEARS IN ASSESSEES FOUR SUBSTANTIVE GROUN DS IN THE INSTANT APPEAL. WE FOLLOW JUDICIAL CONSISTENCY TO AF FIRM THE IMPUGNED ESTIMATION(S) UNDER CHALLENGE. THE ASSESSEE S SOLE SUBSTANTIVE GRIEVANCE AS WELL AS HIS CORRESPONDING M AIN APPEAL ITA NO.2252/HYD/2017 FAIL THEREFORE. 4. WE NOW COME TO THE ASSESSEES LATTER APPEAL ITA NO.2253/HYD/2017 (AY.2013-14). ITS TWIN SUBSTANTIVE GROUNDS INTER ALIA PLEAD THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCE OF RS.6,22,460/- U/S.40(A)(IA) OF THE ACT ON ACCOUNT OF N ON- DEDUCTION OF TDS & MISCELLANEOUS EXPENSES OF RS.35,2 5,000/- ; RESPECTIVELY. ITA NOS. 2252 & 2253/H/17 :- 4 -: 5. WE ADVERT TO SECTION 40(A)(IA) ISSUE AND NOTICE THAT T HE CIT(A) HAS NOT ADJUDICATED UPON THE FACTUAL MATRIX OF THE RELATION BETWEEN THE ASSESSEE-DEDUCTOR AND ITS PAYEE-D EDUCTEE AS PER LAW AS HE HAS ONLY GONE BY THE TRIBUNALS SPEC IAL BENCHS DECISION IN MERILYN SHIPPING AND TRANSPORT L TD., VS. ACIT [136 ITD 23] (SB) [16 ITR 1] (SB)(VISAKHA.)(T RIB.) DEALING WITH PAID/PAYABLE ISSUE. THE REVENUE FAILS TO DIS PUTE THAT THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF THE HON'BLE APEX COURTS JUDGMENT OF PALAM GAS SERVICE VS. CIT [394 IT R 300] (SC) THAT THE IMPUGNED STATUTORY PROVISION APPLIES IN CA SE OF PAID AS WELL AS EXPENSES REMAINING PAYABLE DURING T HE YEAR. THE LEGISLATURE HAS ALSO INSERTED SECTION 40(A)(IA) 2 ND PROVISO IN THE ACT; VIDE FINANCE ACT, 2012 W.E.F.01-04-2013, STIP ULATING THAT THE IMPUGNED STATUTORY PROVISION WOULD NOT APPLY IN C ASE THE ASSESSEE/DEDUCTOR IS NOT THE ASSESSEE IN DEFAULT U/S.201(1) 1 ST PROVISO OF THE ACT IN VIEW OF THE FACT THAT THE DEDUCTEE HAS ALREADY BEEN ASSESSED QUA THE SUM IN QUESTION. THE CIT(A) IS THEREFORE DIRECTED TO EXAMINE THE ABOVE FORMER ISSUE IN LIGHT OF THIS AMENDED PROVISIONS AS WELL. THE FACTUAL PROVISION IS NO DIFFERENT QUA THE ALLEGED AGREED ADDITION OF RS.35,25,000/- WHEREIN THE CASE R ECORDS DO NOT INDICATE ANY CONCESSION COMING FROM THE TAXPAYERS SIDE. WE THUS RESTORE BOTH THESE ISSUES BACK TO THE CIT(A) FOR HIS AFRESH ADJUDICATION AS PER LAW WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING. ITA NOS. 2252 & 2253/H/17 :- 5 -: 6. THE ASSESSEES FORMER APPEAL ITA NO.2252/HYD/201 7 IS DISMISSED AND LATTER CASE ITA NO.2253/HYD/2017 IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. A COP Y OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH DAY OF JANUARY, 2021 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( S.S. GODAR A ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 04-01-2021 TNMM ITA NOS. 2252 & 2253/H/17 :- 6 -: COPY TO : 1.KNR CONTRACTORS PVT. LTD., C/O. SHRI SAMUEL NAGAD ESI, CHARTERED ACCOUNTANT, 408, SRI RAMAKRISHNA TOWERS, BESIDES IMAGE HOSPITALS, AMEERPET, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-2(1), HYDERABAD. 3.CIT(APPEALS)-9, HYDERABAD. 4.PR.CIT-2, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.