Sri Shakthi Constructions (AOP), Hyderabad V. ITO, Hyderabad

ITA 303/HYD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3374 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: S RAMA RAO
• Keywords: Business income; Corroborative evidences; Revised return
• Section: 143(3); 133A; 139(5); 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.303/H/2009 ASSESSMENT YEAR 2005-06 SHRI SAKTHI CONSTRUCTIONS (AOP), HYDERABAD ( PAN AACA 5278 0C) VS ITO WARD 9 (3), HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI K.E. SUNIL BABU ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) VIJAYAWADA DATED 26.11 .2008 AND PERTAINS TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 2. THE CIT(A) ERRED IN HOLDING THAT THE TOTAL TURN OVER OF THE ASSESSEE HEREIN IS RS.7,92,39,000/- AND NOT RS.1,86,50,000/- WHICH IS THE ACTUAL TURNOVER. 3. THE CIT(A) OUGHT TO HAVE HELD THAT THE ACTUAL TU RNOVER IS ONLY RS.1,86,50,000 WHEN THE ASSESSEE FILED A DETAILED E XPLANATION MENTIONING THE TURNOVER OF RS.1,86,50,000 AND NOT R S.7,92,39,000/- 4. THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE INCOME FROM BUSINESS AT 8% OF THE TU RNOVER OF RS.7,92,39,000 WITHOUT CONSIDERING THE FACT THAT TH E ASSESSEE DID NOT HAVE SO MUCH TURNOVER. 5. THE CIT(A) ERRED IN CONFIRMING THE ASSESSING OF FICER IN ASSESSING THE INCOME FROM HOUSE PROPERTY PARTICULARLY WHEN THERE IS NO RECEIPT OF RENT FROM THE PROPERTY. 6. THE CIT(A) ERRED IN CONFIRMING THE ASSESSMENT M ADE BY THE ASSESSING OFFICER. ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 2 3. BRIEF FACTS OF THE ISSUE ARE THAT THERE WAS A SURVEY OPERATIONS U/S 133A WAS CONDUCTED IN THE CASE OF M/S SRI SURYO DAYA CONSTRUCTIONS (FIRM) ON 25.1.2006 AND IN THE CASE OF M/S SRI SHAK THI CONSTRUCTIONS (FIRM) ON 15.2.2006. BOTH THE FIRMS WERE FLOATED BY THE S AME GROUP OF PERSONS. DURING THE COURSE OF POST SURVEY INVESTIGATIONS, T HE MANAGING PARTNER OF M/S SURYODAYA CONSTRUCTIONS (FIRM) MR. RAJENDRA KUM AR HAS FURNISHED A NOTARISED AFFIDAVIT DATED 6.3.2006. HE HAS SUBMITT ED ONE MORE NOTARISED AFFIDAVIT DURING THE COURSE OF ASSESSMENT PROCEEDIN GS FOR THE ASSESSMENT YEAR 2004-05. THE MANAGING PARTNER OF M.S SRI SHAK TI CONSTRUCTIONS MR. K. SURESH KUMAR HAS ALSO FURNISHED A NOTARISED AFFIDAV IT ON 4.12.2007 DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESS MENT YEAR 2005-06. IN ALL THE ABOVE SAID NOTARISED AFFIDAVITS THE MANAGIN G PARTNERS STATED THAT THE FIRMS M/S SURYODAYA CONSTRUCTIONS AND M/S SRI SHAKT HI CONSTRUCTIONS ARE NON-EXISTENT. FURTHER, THEY HAVE STATED THAT ALL T HE FIGURES SHOWN IN THE RETURNS OF INCOME OF THE FIRMS ARE BASELESS AND IN FACT, NO BUSINESS WAS CARRIED OUT BY THE FIRMS AT ALL. HOWEVER, THEY HAV E STATED THAT THEY HAVE DONE SOME CONSTRUCTIONS BUSINESS AS AN AOP AND TH E RETURNS OF INCOME WERE FILED UNDER THE NAME AND STYLE AS SRI SHAKT I CONSTRUCTIONS (AOP) FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 SHOWING GR OSS RECEIPTS AT RS.38,50,000 AND RS.1,86,50,000/- RESPECTIVELY. RE VISED RETURNS OF INCOME WERE ALSO FILED IN THE CASE OF BOTH THE FIRMS SHOWI NG INCOME TO BE NIL. AS SEEN FROM THE RETURNS OF INCOME FILED, THE TURNOVER SHOWN FOR THE PREVIOUS YEAR 2004-05 ARE AS FOLLOWS: SRI SURYODAYA CONSTRUCTIONS (FIRM) (ORIGINAL) RS .7,92,39,000 SRI SHAKTHI CONSTRUCTIONS (FIRM) (ORIGINAL) RS. 7,91,35,000 SHRI SHAKTHI CONSTRUCTIONS (AOP) RS.1,86,50,00 0 SRI SURYODAYA CONSTRUCTIONS (FIRM) (REVISED) RS.NIL SRI SHAKTHI CONSTRUCTIONS (FIRM) (REVISED) RS.NIL 4. THE ORIGINAL RETURNS OF INCOME FILED IN THE CA SE OF BOTH THE FIRMS WERE DULY ACCOMPANIED BY AUDIT REPORTS IN FORM NO. 3CD DULY CERTIFIED BY ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 3 THE CHARTERED ACCOUNTANTS AS REQUIRED U/S 44AB. HO WEVER, THE EXPENDITURE CLAIMED IN THE ORIGINAL RETURNS OF INCO ME IN THE FIRMS CASE WERE NOT SUBSTANTIATED BY ANY EVIDENCE, DURING THE ASSES SMENT PROCEEDINGS. 5. THE GROSS RECEIPTS SHOWN VIDE RETURN OF INCOME FOR M/S SRI SHAKTHI CONSTRUCTIONS (AOP) IS RS.1,86,50,000/-. T HOUGH THE TURNOVER IS MORE THAN RS.40 LAKHS THE ASSESSEE AOP HAS NOT GOT ITS ACCOUNTS AUDITED BY CHARTERED ACCOUNTANTS AS REQUIRED U/S 44AB OF THE I T ACT. FURTHER, THE ASSESSEE HAS STATED THAT DURING THE COURSE OF ASSES SMENT PROCEEDINGS THAT THE AOP HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS. BESIDES THIS, THE ASSESSEE COULD NOT FURNISH ANY SUPPORTING EVIDENCES FOR THE FIGURES FURNISHED IN THE RETURN OF INCOME FILED IN THE CAPA CITY OF AOP. THERE WAS NO EVIDENCE TO SUPPORT THE SALES TURNOVER OF RS.1,86,5 0,000/-. IN THE CIRCUMSTANCES, THE ASSESSING OFFICER HAS CONSIDERED THE TURNOVER DECLARED BY M/S SURYODHARA CONSTRUCTIONS (FIRM) BEING THE HI GHEST TURNOVER AMONG THE DIFFERENT RETURNS FILED BY THE ASSESSEE AS THE TURNOVER OF M/S SHAKTHI CONSTRUCTIONS AT RS.7,92,39,000/-.DISCLOSED BY THE ASSESSEE AND CONSIDERED THE INCOME AT 8% OF THE TURNOVER AND TREATED AS INC OME FROM BUSINESS AT RS.63,39,120/-. FURTHER, THE ASSESSEE HAS SHOWN RS. 20 LAKHS INCOME AS RENT IN THE CASH FLOW STATEMENT. HOWEVER, NO INCOM E WAS DISCLOSED UNDER INCOME FROM HOUSE PROPERTY. SINCE THE ASSESSEE HAS ADMITTED IN THE COURSE OF SURVEY OPERATION U/S 133A ON 25.1.2006 THAT THE ASSESSEE HAS LET OUT THEIR HOUSE PROPERTIES SITUATED AT NARAYAGUDA AND D ILSHUKNAGAR, THE ASSESSING OFFICER HAS BROUGHT THIS AMOUNT AS INCOME FROM PROPERTY. AGAINST THE DETERMINATION OF INCOME AT 8% ON TURNOVER OF RS .7,92,39,000/- AND INCOME FROM HOUSE PROPERTY AT RS.20 LAKHS (NET INCO ME FROM HOUSE PROPERTY RS.14 LAKH), THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE CONTENTION OF THE LEARNED AUTHORIZED REPRE SENTATIVE FOR THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS TO CONSI DER THE REVISED RETURN FILED BY THE ASSESSEE WHICH IS FILED U/S 139(5) AND WHICH IS A VALID RETURN AND AS PER WHICH THE INCOME OF THE ASSESSEE IS NIL ONLY. THE ORIGINAL RETURN IS NOT A CORRECT RETURN, THE INCOME DECLARED THEREIN OR TH E TURNOVER MENTIONED ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 4 THEREIN CANNOT BE CONSIDERED FOR THE PURPOSE OF DET ERMINATION OF INCOME. FURTHER, THE ASSESSEE IS HAVING NO HOUSE PROPERTY I NCOME AND IT CANNOT BE CONSIDERED AS INCOME UNDER HEAD INCOME FROM HOUSE P ROPERTY. THE ORIGINAL RETURN FILED CANNOT BE CONSIDERED IN VIEW OF THE RE VISED RETURN AND THE ASSESSING OFFICER SHOULD HAVE MADE PROPER EXAMINATI ON OF THE REVISED RETURN. THE ASSESSEE HAS NEITHER CARRIED ON ANY BU SINESS ACTIVITY NOR DID IT EVER EXIST. ACCORDING TO AR THE ASSESSING OFFICER IS REQUIRED TO CAST NECESSARY ENQUIRIES WITH HUDA AND VARIOUS OTHER GOV ERNMENT AUTHORITIES TO KNOW WHETHER THERE WERE ANY TRANSACTIONS WITH THE F IRM. ACTUALLY NO TRANSACTIONS TOOK PLACE WITH HUDA. ACCORDING TO AR THERE IS NO QUESTION OF MAINTENANCE OF ANY BOOKS OF ACCOUNTS AS THE ASSESSE E HAS NOT CARRIED ON ANY BUSINESS ACTIVITIES DURING THE YEAR UNDER CONSI DERATION. HE DREW OUR ATTENTION TO THE PAPER BOOK CONTAINING 1-52 PAGES. HE ALSO RELIED ON THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF G ODHRA ELECTRICITY COMPANY LTD. VS. CIT (225 ITR 746) (SC) FOR THE PRO POSITION THAT INCOME TAX IS A LEVY ON INCOME. NO DOUBT, THE INCOME TAX ACT TAKES INTO ACCOUNT TWO POINTS OF TIME AT WHICH THE LIABILITY TO TAX IS ATT RACTIVE VIZ., THE ACCRUAL OF THE INCOME OR ITS RECEIPT; BUT THE SUBSTANCES OF THE MA TTER IS THE INCOME. IF INCOME DOES NOT RESULT AT ALL, THERE CANNOT BE A TA X EVEN THOUGH IN BOOK KEEPING, AN ENTRY IS MADE ABOUT A HYPOTHETICAL INCO ME WHICH DOES NOT MATERIALISE. 7. ON THE OTHER HAND THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE HAS FILED ITS OR IGINAL RETURN OF INCOME ON 24.3.2006 ALONG WITH INCOME COMPUTATION STATEMENT D ISCLOSING TOTAL GROSS RECEIPTS OF RS.1,86,50,000/-. THE PROFIT WAS ESTIM ATED @ 8% OF RS. 1,86,50,000/- AND TAX LIABILITY THEREON WAS DET ERMINED AT RS.6,06,164/. THIS TAX LIABILITY WAS PAID AS EVIDENT FROM COUNTER FOIL OF THE CHALLAN ENCLOSED WITH THIS RETURN OF INCOME. THE CASH FLOW STATEMENT ENCLOSED WITH THIS RETURN OF INCOME, SHOWS GROSS RECEIPTS OF RS. 1,86,50,000/- FROM ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 5 CUSTOMERS. THIS CASH FLOW STATEMENT ALSO SHOWS RS. 15 LAKHS AND RS.5 LAKHS AS RENT/ADVANCE NARAYANAGUDA AND RENT/ADVA NCE P&T COLONY RESPECTIVELY. DURING THE ASSESSMENT PROCEEDINGS, A SSESSEE HAS FILED BIFURCATION OF THIS GROSS RECEIPTS OF RS. 1,86,50,0 00/- WHICH IS AS FOLLOWS: FLAT NO. FLOOR CONSIDERATION AS PER REGISTRATION CONSIDERATION OTHERS TOTAL 104 1 ST FLOOR PART PAYMENT 7,45,000 31,500 7,76,500 201 2 ND FLOOR 6,00,000 6,00,500 12,00,500 202 4,57,000 5,75,500 10,33,000 203 4,40,000 5,80,000 10,20,000 204 5,91,500 5,60,000 11,51,500 301 3 RD FLOOR 5,91,500 6,00,500 11,92,000 302 4,40,000 6,55,000 10,95,000 303 4,40,000 6,55,000 10,95,000 304 4,33,000 6,20,000 10,53,000 401 4 TH FLOOR 6,14,500 6,25,000 12,39,500 402 4,57,500 6,20,500 10,78,000 403 4,40,000 6,15,000 10,55,000 404 5,91,500 5,13,500 10,05,000 501 5 TH FLOOR 6,14,500 6,35,000 12,49,500 502 4,40,000 6,75,000 11,15,000 503 4,40,000 6,75,000 11,15,000 504 7,26,500 4,50,000 11,76,500 8.1. DURING THE POST SURVEY INVESTIGATION, SHRI K . SURESH KUMAR FILED AFFIDAVITS ON 6/3/2006 AND 4/12/2006 ADMITTIN G THAT THE PARTNERSHIP FIRM I.E. M/S SRI SHAKTHI CONSTRUCTION HAS NOT DONE ANY BUSINESS AND THE SAID FIRM SHOULD BE TREATED AS REDUNDANT AND THE FI GURES SHOWN IN THE RETURN OF THIS FIRM SHOULD NOT BE CONSIDERED SINCE NO TRANSACTIONS WERE CARRIED ON UNDER THE CAPACITY OF THIS FIRM. IT HAS FURTHER BEEN ADMITTED IN THESE AFFIDAVITS THAT WHATEVER THE TRANSACTIONS ARE TAKEN PLACE ARE IN THE STATUS OF AOP ONLY. ON 24.3.2006 SHRI SURESH KUMAR FILED A LETTER BEFORE THE ASSESSING OFFICER AND ANOTHER LETTER ON 17.12.2 007 TOTALLY DENYING THE ORIGINAL RETURN OF INCOME STATING THAT NO BUSINESS HAS BEEN CARRIED ON IN THE CAPACITY M/S SHAKTHI CONSTRUCTIONS (FIRM), HOWEVER BUSINESS IS CARRIED ON IN THE CAPACITY AS SHAKTHI CONSTRUCTIONS (AOP). F URTHER, M/S SHAKTHI ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 6 CONSTRUCTIONS FILED ITS RETURN OF INCOME DECLARING AT RS.1,19,150/- AND PAID TAX AT RS.2,43,600/- THE MANAGING PARTNER MR. SURE SH KUMAR HAS ALSO CERTIFIED THE INFORMATION GIVEN IN THE RETURN OF IT S SCHEDULE AND THE STATEMENTS ARE COMPLETE AND IN ACCORDANCE WITH PROV ISIONS OF INCOME TAX ACT. THE AUDITOR HAS ALSO CERTIFIED ALL THE TRANSA CTIONS. THE DETAILS OF PARTNERS AND THEIR PROFIT SHARING RATIO OF THIS FIR M ARE AS UNDER: I) SMT. K. BHARATI DEVI 30% II) SRI K. SASTRIRANI 30% III) SMT. K. SUNITA 30% IV) SRI K. SURESH KUMAR 10% THE CAPITAL ACCOUNTS OF THESE PARTNERS ARE CREDITED BY THEIR SHARE OF PROFITS. THEIR CAPITAL ACCOUNTS HAVE ALSO BEEN CREDITED BY I NTEREST EARNED ON THEIR RESPECTIVE CAPITALS. THIS INTEREST INCOME HAS ALSO BEEN OFFERED BY RESPECTIVE PARTNERS IN THEIR INDIVIDUAL CAPACITY. THUS, THE T RANSACTIONS (PROFIT AND INTEREST) CREDITED TO THEIR CAPITAL ACCOUNTS ARE TH E RESULT OF THE PROFIT EARNED ON THE TOTAL TURN OVER OF RS.7,92,39,000/-. THE AS SESSEE HAS FAILED TO PRODUCE EVIDENCES EITHER BEFORE THE ASSESSING OFFIC ER OR DURING THE APPELLATE PROCEEDINGS THAT THE TRANSACTIONS REFLECTED IN THE AUDITED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF M/S SHRI SHAKTHI CONST RUCTIONS (FIRM) HAVE NEVER TAKEN PLACE. M/S SRI SURYODHAYA CONSTRUCTIO NS (FIRM) ALSO FILED AUDITED PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND PARTNERS CAPITAL ACCOUNT. THE PROFIT AND LOSS ACCOUNT OF M/S SURYOD HAYA CONTRUCTIONS (FIRM) SHOWS TOTAL TURN OVER OF RS.7,92,39,000/-. SHRI K. RAJENDRA KUMAR, MANAGING PARTNER OF M/S SRI SURYODHAYA CONSTRUCTION S (FIRM) HAS DENIED THE EXISTENCE OF THIS PARTNERSHIP FIRM. HOWEVER, H E HAS ADMITTED IN HIS AFFIDAVIT THAT THE TRANSACTIONS OF M/S SURYODHAYA C ONSTRUCTIONS (FIRM) ARE IN FACT THE TRANSACTIONS OF M/S SHAKTHI CONSTRUCTIONS (AOP). HE HAS FURTHER ADMITTED THAT THE RETURNS FILED BY M/S SRI SURYODHA YA CONSTRUCTIONS FOR ASSESSMENT YEAR 2004-05 AND 2005-06 MAY BE TREATED AS REDUNDANT. THE ASSESSING OFFICER HAS ACCEPTED THIS REQUEST AS EVID ENT FROM ASSESSMENT ORDER MADE U/S 143(3) FOR THE ASSESSMENT YEAR 2004- 05 IN CASE OF SRI SURYODHAYA CONSTRUCTIONS (FIRM). IT IS ALSO CLEAR FROM THE ASSESSMENT ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 7 ORDERS OF M/S SRI SURYODHAYA CONSTRUCTIONS (FIRM), M/S SHAKTHI CONSTRUCTIONS (FIRM) AND M/S SHRI SHAKTHI CONSTRUCT IONS (AOP) THAT THE BUSINESS WAS ONE BUT BUSINESS RECEIPTS HAVE BEEN SH OWN SEPARATELY IN THE NAME OF THREE ENTITIES. IT IS ALSO EVIDENT FROM TH E ORDERS OF M/S SURYODHAYA CONSTRUCTIONS (FIRM) AND SHR SHAKTHI CONSTRUCTIONS (FIRM) FOR AY 2004-05 AND 2005-06 RESPECTIVELY THAT THESE ASSESSMENTS HAV E BEEN MADE ON PROTECTIVE BASIS WITH SPECIFIC FINDINGS THAT THIS I NCOME HAS TO BE ASSESSED IN THE HANDS OF M/S SHAKTHI CONSTRUCTIONS (AOP) ONLY. IT IS ALSO ON RECORD THAT SHRI K. SURESH KUMAR AND SHRI K. RAJENDRA KU MAR BOTH HAVE AFFIRMED IN THEIR AFFIDAVITS THAT M/S SHAKTHI CONST RUCTIONS (FIRM) AND SURYODHAYA CONSTRUCTIONS (FIRM) ARE NON EXISTENT AN D THEIR BUSINESS IN FACT BELONG TO M/S SRI SHAKTHI CONSTRUCTIONS (AOP). WHI LE ASSESSING THE TOTAL INCOME IN THE HANDS OF THE ASSESSEE, THE ASSESSING OFFICER HAS ADOPTED THE FIGURE OF TOTAL TURN OVER OF M/S SRI SURYODHAYA CON STRUCTIONS (FIRM) SINCE IT IS THE HIGHEST TURNOVER AMONG THESE THREE FIRMS. T HE BUSINESS TRANSACTION OF M/S SRI SUYODHAYA CONSTRUCTIONS (FIRM) AND M/S S HAKTHI CONSTRUCTIONS (FIRM) ARE IN FACT THE BUSINESS TRANSACTIONS OF M/S SHAKTHI CONSTRUCTIONS AS AFFIRMED BY SHRI K. SURESH KUMAR AND SRI K. RAJENDR A KUMAR IN THEIR AFFIDAVITS. SIMILARLY, IN THE CASH FLOW STATEMENT FILED ALONG WITH THE RETURN OF INCOME SHOWS RECEIPTS OF RENT AT RS.20 LAKHS FRO M PROPERTY AT NARAYANAGUDA AND P&T COLONY RESPECTIVELY OWNED BY T HE ASSESSEE. THE ONLY GRIEVANCE BEFORE US IS THAT THE REVISED RETURN OF THE ASSESSEE TO BE CONSIDERED FOR DETERMINING THE INCOME. WE HAVE CAR EFULLY GONE THROUGH THE ARGUMENT OF THE ASSESSEES COUNSEL. THE PROVISIONS OF SECTION 139(5) IS AS FOLLOWS: SECTION 139(5) IF ANY PERSON, HAVING FURNISHED A R ETURN UNDER SUB SECTION (1) OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB SECTION (1) OF SECTION 142, DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN, HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE R ELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASS ESSMENT, WHICHEVER IS EARLIER. PROVIDED THAT WHERE THE RET URN RELATES TO THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR C OMMENCING ON THE LST DAY OF APRIL, 1988, OR ANY EARLIER ASSES SMENT YEAR, THE REFERENCE TO ONE YEAR AFORESAID SHALL BE CONSIDERED AS A REFERENCE TO TWO YEARS FORM THE END OF THE RELEVANT ASSESSMEN T YEAR. ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 8 10. THE AFORESAID SECTION MAKES IT CLEAR THAT THE ASSESSEE MAY FILE A REVISED RETURN IF IT DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN. IN SO FAR AS THE PRESENT CASE IS CONCERNED, THERE I S NO OMISSION OR WRONG STATEMENT WHICH REQUIRED THE ASSESSEE TO FILE THE R EVISED RETURN. THE REASON FOR FILING THE REVISED RETURN ONLY THAT THERE WAS N O TRANSACTION BY M/S SHAKTHI CONSTRUCTIONS (FIRM), M/S SURYODHAYA CONSTR UCTIONS (FIRM) AND THEY ARE NON EXISTENT AND THEIR BUSINESS ACTIVITIES IN FACT BELONGS TO AOP. IT IS MEANT THAT THE INCOME OF M/S SHAKTHI CONSTRUCTIO NS (AOP) I.E. THE PRESENT ASSESSEE IS NIL. THE PROVISIONS OF SECTION 139 (5) CLEARLY MENTIONED TWO CONDITIONS UNDER WHICH THE REVISED RETURN CAN B E FILED AND NONE OF THESE ARE APPLICABLE TO THE FACTS OF THE PRESENT AS SESSEES CASE. IT IS FOR THIS REASON, THAT THE REVISED RETURN FILED BY THE ASSESS EE CANNOT BE ACCEPTED BY THE ASSESSING OFFICER. WHEN BOTH THE PARTNERS I.E. , MR. K. SURESH KUMAR AND MR. K. RAJENDRA KUMAR STATED THAT THE BUSINESS IS NON EXISTENCE IN THE NAME OF THOSE TWO FIRMS AND BUSINESS WAS CARRIED ON IN THE NAME OF M/S SHAKTHI CONSTRUCTIONS (AOP), THE ASSESSING OFFICER CONSIDERED THE TURNOVER DECLARED BY ONE CONCERN OF THE GROUP AS THE TURN OV ER OF THE ASSESSEE WHICH IS CORRECT IN THE PRESENT CIRCUMSTANCES. THE REASO N ADVANCED BY THE ASSESSEE FOR FILING THE REVISED RETURN IS NOT A LEG ALLY VALID REASON NOR IS NOT BONA FIDE. THE ASSESSING OFFICER HAS MADE USE OF T HE MATERIALS BEFORE HIM FOR THE PURPOSE OF COMPLETING THE ASSESSMENT. IT I S A SETTLED LAW POSITION THAT EVEN MATERIALS COLLECTED BY WAY OF ILLEGAL SEA RCH CAN ALSO BE USED FOR THE PURPOSE OF ASSESSMENT. IN THE PRESENT CASE, THE AS SESSEE DULY GOT THE BOOKS OF ACCOUNTS AUDITED BY THE CHARTERED ACCOUNTANTS U/ S 44AB AND THE FILED RETURN OF INCOME ALONG WITH THE AUDIT REPORT AND LA TER FILING AFFIDAVITS STATING THAT THIS IS NOT CORRECT RETURN AND FILING THE REVI SED RETURN THEREUPON, THIS PRACTICE HAS NEITHER BEEN SHOWN TO BE EXIST NOR REC OGNISED IN COMMERCIAL CIRCLES OR BY COURTS AND EVEN ASSUMING THAT SUCH A PRACTICE EXISTS, THE TRIBUNAL IS NOT EXPECTED TO TAKE JUDICIAL NOTICE OF SUCH SUB STANDARD MORALITY ON THE PART OF THE ASSESSEE SO AS TO ENABL E THEM TO GO BACK ON THEIR SWORN STATEMENTS GIVEN IN THE COURSE OF SURVEY OPER ATION AND RETURNS FILED BEFORE THE LOWER AUTHORITIES. A HEAVY BURDEN LIES ON THE ASSESSEE TO PROVE ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 9 THAT THE REVISED RETURN ALONE GIVES A CORRECT PICTU RE AND THE SWORN STATEMENTS GIVEN AT THE TIME OF SURVEY WERE MOTIVAT ED. THE ASSESSING OFFICER HAS NOT CONSIDERED THE REVISED RETURN ON TH E REASONS THAT THE PARTNERS OF THE ASSESSEE FIRM IN THEIR AFFIDAVITS S TATED THAT BUSINESS CARRIED ON BY M/S SHAKTHI CONSTRUCTIONS (FIRM) AND M/S SURY ODHAYA CONSTRUCTIONS (FIRM) WAS IN FACT BUSINESS OF AOP. THE ASSESSEE I S NOT EXPECTED TO CHANGE THE VERSION ONE AFTER ANOTHER AND TO GIVE CONTRARY STATEMENT AGAINST THE AUDITED BOOKS OF ACCOUNTS. CONSIDERING THE OVER AL L FACTS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE OPINION THAT THE LOWER AUTHORITIES IS JUSTIFIED IN CONSIDERING RS.7,92,39,000/- WHICH IS THE HIGHEST TURNOVER AMONG THE CONCERNS OWNED BY THE SAME GROUP AS THE T URNOVER OF THE ASSESSEE AND CONSIDERING THE SAME FOR DETERMINING T HE INCOME AT 8% OF IT. SIMILARLY, THE ASSESSEE HAS NOT GIVEN PROPER EXPLAN ATION NOT SHOWING INCOME FROM HOUSE PROPERTY THOUGH THE SAME WAS REFLECTED I N THE CASH FLOW STATEMENT AS RECEIPTS AT RS.20 LAKHS. IN OUR OPINI ON, THE ASSESSING OFFICER IS JUSTIFIED IN TREATING RS.20 LAKHS AS INCOME UNDE R HEAD INCOME FROM HOUSE PROPERTY. WHEN A RECEIPT IS TO BE TAXED AS INCOME OR NOT, THE BURDEN LIES ON THE ASSESSEE TO PROVE THAT SUCH RECEIPT IS NOT A IN COME UNDER THE IT ACT. IN THE PRESENT CASE, THE ASSESSEE HAS ITSELF SHOWN REC EIPT AS IN THE CASH FLOW STATEMENT AND BURDEN LIES ON THE ASSESSEE TO PROVE IT IS NOT THE NATURE OF INCOME. IN OUR OPINION, THE ASSESSEE HAS NOT DISCH ARGED THE BURDEN CAST UPON IT. IN THE PRESENT CASE, THE LOWER AUTHORITIE S HAVE TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUN T ANY IRRELEVANT MATERIAL IN BASING THEIR CONCLUSION, THE ORDER OF THE LOWER AUTHORITIES IS NOT LIABLE TO BE INTERFERED WITH, UNLESS THE CONCLUSIONS ARRIVED AT BY THE LOWER AUTHORITIES ARE PERVERSE. WE HAVE ALSO CAREFULLY GONE THROUGH T HE JUDGEMENT RELIED BY THE LEARNED COUNSEL OF THE ASSESSEE. THE APEX COUR T JUDGEMENT IN THE CASE OF GODHRA ELECTRICITY COMPANY LTD IS DELIVERED ON D IFFERENT SET OF FACTS WHICH IS OF NO ASSISTANCE TO THE ASSESSEE. IN VIEW OF T HIS, WE CONFIRM THE ORDER OF THE LOWER AUTHORITIES. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE STA NDS DISMISSED. ITA NO.303/H/2009 MS/ SRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 10 ORDER PRONOUNCED IN THE OPEN COURT O N: 21.4. 2011 SD/- SD/- G.C. GUPTA CHANDRA POOJA RI VICE PRESIDENT ACCOUNTANT MEMBE R DATED THE 21 ST APRIL, 2011 COPY FORWARDED TO: 1. SHRI S. RAMA RAO, 103, INDIRADEVI NILAYAM, 3-6-542 /4 ST.NO.7, HIMAYATNAGAR, HYDERABAD C/O SHRI SHAKTHI CONSTRUCTIONS (AOP), HYDERABAD 2. THE ITO WARD 9(3), HYDERABAD 3. THE CIT(A) VIJAYAWADA 4. THE CIT, VIJAYAWADA & CIT HYDERABAD 5. THE DR, ITAT, HYDERABAD. NP