ACIT, Hyderabad V. M/s Nuzuveedu Swathi Coastal Consortium, Hyderabad

ITA 255/HYD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6058 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-11-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA SINHA
• Assessee Lawyers: A V RAGHURAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.255/HYD/2010 : ASSESSM ENT YEAR 2006-07 ITA NO.725/HYD/2010 : ASSESSM ENT YEAR 2007-08 ASST. COMMISSIONER OF INCOME- TAX CIRCLE 10(1), HYDERABAD. V/S. M/S. NUZIVEEDU SWATHI COASTAL CONSORTIUM, HYDERABAD . ( PAN - AAAAN 3839 R ) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. VASUNDHARA SINHA RESPONDENT BY : SHRI A.V.RAGHURAM O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAI NST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-VI HYDE RABAD DATED 8.12.2009 FOR THE ASSESSMENT YEAR 2006-07 AND DATED 8.3 .2010 FOR THE ASSESSMENT YEAR 2007-08. SINCE A COMMON ISSUE IS INVOLVED, BOTH THESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. THE ONLY DISPUTE INVOLVED IN THE GROUNDS OF THE REVENUE IN THESE APPEALS IS WITH REGARD TO ESTIMATION OF THE PROFIT OF THE ASSESSEE, AND JUSTIFICATION FOR THE RELIEF GRANTED BY THE CIT(A) BY ADOPTING A G.P. RATE OF 5% AS AGAINST 7% ADOPTED BY THE ASSESSING OFFICER. 3. LEARNED DEPARTMENTAL REPRESENTATIVE RELYING ON THE ORDERS OF ASSESSMENT SUBMITTED THAT THIS TRIBUNAL HAS BEEN CONSISTENTLY HOLDING THAT ITA NO.255 & 725/HYD/10 M/S. NUZIVEEDU SWATHI COASTAL CONSORTIUM,HYD . 2 THE G.P. RATE IN RESPECT OF SUB-CONTRACT WORKS OF AN ASSESSEE SHOULD BE ESTIMATED AT 8% INSTEAD OF 5% CONFIRMED BY THE CIT(A). SHE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASES OF M/S. K.N.R. CONSTR UCTIONS LTD., HYDERABAD DATED 30.11.2009 IN ITA NOS. 9/HYD/2007; 114 1/HYD/2005 AND ITA NO.5648/HYD/2005 FOR THE ASSESSMENT YEARS 2001-02 AND 2003-04 AND ALSO FURNISHED A COPY THEREOF BEFORE US. 4. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE, BESIDES STRONGLY RELYING THE ORDERS OF THE CIT(A), RELI ED ON THE ORDERS OF THE TRIBUNAL DATED 23.10.2008 IN ITA NO.1112/HYD/2007 FO R THE ASSESSMENT YEAR 2003-04 AND DATED 30.11.2009 IN ITA NO.461/HYD/ 2006 FOR THE ASSESSMENT YEAR 2004-05 IN THE CASES OF M/S. K.RAMAKRISHNA C ONTRACTORS PVT. LTD., HYDERABAD, WHEREIN THE TRIBUNAL CONFIRMED THE ESTIMATION OF PROFIT ON SUB-CONTRACT WORKS AT 5%, DULY FURNISHING COPIE S OF THOSE ORDERS OF THE TRIBUNAL BEFORE US. 5. WE HAVE HEARD THE PARTIES ON THIS ISSUE. IN THI S CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE IS A SUB-CONTRACTOR AND HE H AS TO PAY 7.2% OF THE GROSS RECEIPT AS ROYALTY TO THE MIN CONTRACTOR AND ALSO HE HAS TO PAY A SUM OF RS.1,45,000 PER MONTH ON THE STOCK DEPLOYED BY THE MAIN CONTRACTOR ALONGWITH EXPENDITURE INCURRED TOWARDS STATU TORY CLEARANCES AND PERFORMANCE GUARANTEE COST. BEING SO, FACTS AND CIRCUMSTANCE S OF THE PRESENT CASES OF THE ASSESSEE CANNOT BE COMPARED WITH THE FACT S AND CIRCUMSTANCES OF THE CASE RELIED UPON BY THE LEARNED DEPA RTMENTAL REPRESENTATIVE IN THE CASE OF M/S. K.N.R. CONSTRUCTIONS LTD. (SUPRA), AND AS SUCH THE RATIO OF DECISION OF THAT CASE CANNOT BE APPLIE D TO THE FACTS OF THE PRESENT CASE. IN OUR OPINION, THE ESTIMATION OF PR OFIT CONFIRMED BY THE CIT(A) AT 5% IS IN ORDER AND THE SAME IS ACCORDINGLY CON FIRMED. ITA NO.255 & 725/HYD/10 M/S. NUZIVEEDU SWATHI COASTAL CONSORTIUM,HYD . 3 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE COURT ON 26.11.2010 SD/- SD/- (G.C.GUPTA) (CHANDRA POOJARI) VICE PRESIDENT ACCOUNTANT MEMBER DT/- 26TH NOVEMBER, 2010 COPY FORWARDED TO: 1. M/S. NUZIVEEDU SWATHI COASTAL CONSORTIUM, PLOT NO.6 , KAVURI HILLS, MADHAPUR, HYDERABAD . 2. ASST. COMMISSIONER OF INCOME-TAX CIRCLE 10(1), HYDERAB AD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-VI, HYDERABAD. 4. COMMISSIONER OF INCOME-TAX V HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.