Income Tax Officer, Ward-1, Proddatur V. Sri Peddireddy Venkata Ramana Reddy, Kadapa

ITA 304/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77920 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 26-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PHANI RAJU
• Keywords: Depreciation; Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA. NO.304/HYD/2014 ASSESSMENT YEAR 2010-2011 INCOME TAX OFFICER, WARD - 1 PRODDATUR. VS. SRI PEDDIREDDI VENKATA RAMANA REDDY, PEDDA CHEEPADU (V), CHAPADU (M), KADAPA DIST., PAN ADBPV-6584-C (APPELLANT) (RESPONDENT) FOR REVENUE MR. PHANI RAJU FOR ASSESSEE -NONE- DATE OF HEARING 05.06.2014 DATE OF PRONOUNCEMENT 13.06.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS REVENUE APPEAL AGAINST THE ORDERS OF THE CIT(A), GUNTUR DATED 19.11.2013. REVENUE IS AGGRIEV ED THAT THE CIT(A) HAS GIVEN RELIEF WITHOUT CALLING FOR A R EMAND REPORT AND ALLOWED THE APPEAL ON THE BASIS OF THE SUBMISSI ONS OF THE ASSESSEE. IT IS ALSO CONTENDED THAT ASSESSEE HAS NO T SUBMITTED ANY DETAILS AS CALLED FOR DURING THE ASSESSMENT PRO CEEDINGS LEADING TO COMPLETION OF ASSESSMENT EXPARTE UNDER S ECTION UNDER SECTION 144 OF THE INCOME TAX ACT, 1961. 2. WHEN THE CASE WAS TAKEN-UP FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH NOTI CE OF POSTING HAS BEEN SENT TO THE PARTIES. THEREFORE, AP PEAL IS HEARD EXPARTE QUA ASSESSEE AND DECIDED AFTER HEARING THE LEARNED D.R. 2 ITA.NO.304/HYD/2014 SRI PEDDIREDDY VENKATA RAMANA REDDY 3. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL DERIV ING INCOME FROM SUB-CONTRACT WORKS. HE FILED RETURN OF INCOME FOR A.Y. 2010-11 ADMITTING TOTAL INCOME OF RS.12,95,181 /- ON A TURNOVER OF RS.13,59,82,248/-. A.O. COMPLETED THE A SSESSMENT UNDER SECTION 144 ESTIMATING THE INCOME AT 5% OF TO TAL TURNOVER THEREBY, MAKING ADDITION. BEFORE THE LD. C IT(A) IT WAS SUBMITTED THAT ASSESSEE IS A PETTY SUB-CONTRACTOR A ND IS UNDERTAKING WORKS AT DIFFERENT PLACES. THERE WERE F INANCIAL CONSTRAINTS AND ASSESSEE HAS TO SUFFER LOSSES ALSO. THEREFORE, THE PROFIT SHOWN IN THE BOOKS OF ACCOUNTS IS TRUE A ND CORRECT. 4. LD. CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE FACTS OF THE CASE AS MENTIONED BY THE A.O. NOTICED THAT ASSESSEE IS ONLY A SUB-CONTRACTOR AND MARGIN OF PROFIT IS EXPECTED TO BE LOWER THAN WHAT A CONTRACT OR WOULD ACHIEVE. LD. CIT(A) NOTICED THAT THE PROFITS IN THE GIVEN LINE OF BUSINESS WILL VARY FROM ASSESSEE TO ASSESSEE AND NO FIXED RATE CAN BE LAID DOWN. CONSIDERING THE VARIOUS CASE LAW AND ALSO THE FACT THAT A HIGHER CLAIM OF DEPRECIATION ALSO H AS LEAD TO REDUCED PROFIT, ESTIMATED THE INCOME AT 3% OF THE G ROSS RECEIPTS AS AGAINST 5% ESTIMATED BY THE A.O. HE CON FIRMED THE ADDITION AT RS.40,79,467/- AS AGAINST RS.67,99,112/ - MADE BY AO. 5. AFTER HEARING THE LEARNED D.R. WE DO NOT SEE AN Y REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A ). IN FACT, THE GRIEVANCE OF THE REVENUE WAS NOT ABOUT REJECTION OF ESTIMATION FROM 5% TO 3% BUT LD. CIT(A) GAVE RELIEF WITHOUT CA LLING FOR ANY REMAND REPORT FROM THE A.O. SINCE THE ASSESSEE HAS NOT FURNISHED ANY ADDITIONAL EVIDENCE, RE-APPRAISING TH E EXISTING FACT ON THE BASIS OF THE SUBMISSIONS DOES NOT REQUI RE ANY REMAND REPORT. LD. CIT(A) BASED HIS JUDGMENT ON TH E BASIS OF 3 ITA.NO.304/HYD/2014 SRI PEDDIREDDY VENKATA RAMANA REDDY AVAILABLE FACTS ON RECORD AND ALSO CONSIDERING THE DIFFICULTIES EXPRESSED BY THE ASSESSEE IN NOT EARNING HIGHER PRO FIT. ESTIMATION OF PROFIT AT 3% OF TURNOVER IS REASONABL E. THEREFORE, GROUNDS OF THE REVENUE ARE REJECTED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 13.06.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH JUNE, 2014. VBP/- COPY TO 1. INCOME TAX OFFICER, WARD-1, PRODDATUR. 2. SRI PEDDIREDDY VENKATA RAMANA REDDY, PEDDA CHEEP ADU (V), CHAPADU (M), KADAPA DISTRICT. 3. CIT(A), GUNTUR 4. CIT, TIRUPATI 5. D.R. ITAT, A BENCH, HYDERABAD.