M/s. Shiva Balaji Constructions, Nizamabad, Hyderabad V. Addl.CIT, Ongole

ITA 368/HYD/2011

• Counselvise Citation: 36822514 RSA 2011
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 09-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S RAMA RAO
• Section: 145; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBE R BASHA, ACCOUNTANT MEMBER ITA NO.368/HYD/2011 : ASSTT. YEA R : 2007-08 M/S. SHIVA BALAJI CONSTRUCTIONS, NIZAMABAD. (PAN: AASFS 0409H) VS ADDL. CIT, NIZAMABAD RANGE, NIZAMABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. RAM A RAO RESPONDENT BY: SHRI B.V. PR ASAD REDDY DATE OF HEARING: 27-9-2011. DATE OF PRONOUNCEMENT: 14-10-2011. O R D E R PER AKBER BASHA, AM:- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE CIT (A), HYDERABAD DATED 10-11-2011. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDE R: 1. THE ORDER OF THE CIT (A) IS ERRONEOUS TO THE EX TENT JIT IS PREJUDICIAL TO THE APPELLANT. 2. THE CIT (A) ERRED IN CONFIRMING THE ACTION OF TH E ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT AND IN APPLYING THE PROVISIONS OF SEC. 145 OF THE IT AC T. ITA NO.368 OF 2011 SHIV BALAJI CONSTRUCTIONS, HYD. ====================== 2 3. THE CIT (A) ERRED IN CONFIRMING THE ACTION OF TH E ASSESSING OFFICER IN ESTIMATING THE INCOME AT 10% O F THE GROSS CONTRACT RECEIPTS. THE CIT (A) OUGHT TO HAV E CONSIDERED THE FACT THAT THERE ARE DEPARTMENTAL RECOVERIES TO HT EXTENT OF RS.99,72,274/- WHICH OUG HT TO HAVE BEEN DIRECTED TO BE REDUCED FROM THE GROSS RECEIPTS FOR THE PURPOSE OF ARRIVING AT THE PROFIT. 4. THE CIT (A) ERRED IN NOT CONSIDERING THE FACT TH AT WORKS TO AN EXTENT OF RS.1,72,19,354/- WAS SUB CONTRACTED AND THE APPELLANT RECEIVED ONLY COMMISSION OF 2% AN D THE SAME SHOULD HAVE BEEN EXCLUDED FROM THE GROSS RECEIPTS. 5. THE CIT (A) ERRED IN CONFIRMING LEVY OF INTEREST UNDER SECTION 234B OF THE IT ACT. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O OF HEARING. 3. AT THE OUTSET, WE FIND THAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED BY THE ORDER OF THE TRIBUNAL I N THE CASE OF M/S TRIVENI ENTERPRISES, HYDERABAD VS. INCOME-TAX OFFIC ER, WARD-6(1), HYDERABAD PASSED IN ITA NOS. 352 & 353/HYD/2011 DA TED 27 TH MAY, 2011 WHEREIN THE TRIBUNAL BY FOLLOWING THE DEC ISION IN THE CASE OF SHRI K. RAMAKRISHNA CONTRACTOR (P) LTD., H YDERABAD IN ITA NO. 461/HYD/2006 VIDE ITS ORDER DATED 4-12-2009 DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INCOME OF THE ASS ESSEE AT 8% ON MAIN CONTRACT RECEIPTS AND AT 5% OF THE SUB-CONTRAC T RECEIPTS. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL IN THE CASE ITA NO.368 OF 2011 SHIV BALAJI CONSTRUCTIONS, HYD. ====================== 3 OF M/S TRIVENI ENTERPRISES (SUPRA), WE ARE INCLINED TO DIRECT THE ASSESSING OFFICER TO ESTIMATE THE INCOME OF THE ASS ESSEE AT 8% ON MAIN CONTRACT RECEIPTS AND AT 5% OF THE SUB-CONTRAC T RECEIPTS. WHILE DOING SO, THE ASSESSING OFFICER IS DIRECTED T O REDUCE THE DEPARTMENTAL RECOVERIES OF RS.99,72,274 FROM THE GR OSS RECEIPTS FOR THE PURPOSE OF ARRIVING AT THE ESTIMATED PROFIT SINCE THERE IS NO PROFIT ELEMENT IN SO FAR AS THE SAID DEPARTMENTAL R ECOVERIES ARE CONCERNED. THE PAYMENT OF INTEREST AND SALARY TO THE PARTNERS SHALL BE ALLOWED SUBJECT TO THE LIMITATION SPECIFIE D IN SECTION 40[B] OF THE ACT FROM THE ESTIMATED INCOME. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ORDER WAS PRONOUNCED IN THE COURT ON 14- 10-2011. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER DT. 14 -10-2011. COPY FORWARDED TO: 1. 2. 3. 4. 5. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS RESIDENCY, ROAD NO.9, HIMAYATNAGAR, HYDERABAD. ADDL. CIT NIZAMABAD RANGE, NIZAMABAD. CIT (A)-VI, HYDERABAD. CIT, AP, HYDERABAD. THE DR, ITAT, HYDERABAD. JMR* ITA NO.368 OF 2011 SHIV BALAJI CONSTRUCTIONS, HYD. ====================== 4