Vinod Kumar Mukka, Hyderabad, Hyderabad V. ITO, Ward-8(2), Hyderabad, Hyderabad

ITA 472/HYD/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6998 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 24-03-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 13-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: N O N E
• Keywords: Business income
• Section: 44AD; 40A(3)

Judgement Text

ITA NO 472 OF 2017 VINOD KUMAR MUKKA HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO.472/HYD/2017 ASSESSMENT YEAR: 2012-13 SRI VINOD KUMAR MUKKA HYDERABAD PAN:ACIPM0999C VS. ITO WARD 8(2) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: N O N E REVENUE BY : SRI SUNIL KUMAR PANDEY,DR DATE OF HEARING: 24/03/2021 DATE OF PRONOUNCEMENT: 09/04/2021 ORDER PER S.S. GODARA, J.M. THIS ASSESSEES APPEAL FOR AY.2012-13 ARISES FROM T HE CIT(A)-2, HYDERABADS ORDER DATED 23.11.2016 PASSED IN APPEAL NO.0166/2015-16 IN PROCEEDINGS U/S.143(3) OF THE IN COME TAX ACT, 1961 [IN SHORT, THE ACT]. 2. HEARD BOTH THE PARTIES. CASE FILE PERUSED. NONE APPEARED AT THE ASSESSEES BEHEST. IT IS ACCORDINGL Y PROCEEDED EX- PARTE. IN VIEW OF THE FACT THIS IS AN OLD APPEAL F ILED WAY BACK IN THE YEAR 2017. 3. THE ASSESSEE HAS RAISED THE FOLLOWING THREE SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS)- 2, DT. 23.11.2016 IS CONTRARY TO LAW AND FACTS. ITA NO 472 OF 2017 VINOD KUMAR MUKKA HYDERABAD PAGE 2 OF 4 2. THE COMMISSIONER OF INCOME TAX (APPEALS)-2 (HERE INAFTER REFERRED TO AS CIT(A) ERRED IN CONFIRMING DISALLOWA NCE OF THE EXPENDITURE OF RS.1,12,62,155/- INCURRED FOR DEVELO PING AND MAINTAINING THE LAND FROM 2005 TO 2011. 2.1. THE CIT (A) OUGHT TO HAVE APPRECIATED THE FACT THAT IT IS COMMON TO INCUR EXPENDITURE IN CASH FOR EVICTING TH E ENCROACHERS, CLEARING HURDLES OVER THE LANDS AND OT HER EXPENDITURES AND THEY CANNOT BE DONE THROUGH BANKIN G CHANNELS. 3. THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.26,11,435 UNDER THE PROVISIONS OF SECTION 40 A(3 ) OF THE ACT. 3.1 THE APPELLANT CONTENDS THAT THE PROVISIONS OF S ECTION 40 A(3) ARE NOT APPLICABLE WHEREVER THE INCOME WAS OFF ERED UNDER SECTION 44 AD OF THE ACT. 4. THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST OF RS.1,25,492 AS AGAINST THE CORRECT AMOU NT OF RS.89,182. THE INTEREST SHOULD HAVE WORKED OUT ON PROPORTIONATE BASIS AND NOT FOR THE FULL YEAR. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE AFORESAID GROUNDS AS THE OCCASION MAY REQUIRE. 4. WE ADVERT TO THE FIRST ISSUE OF ASSESSEES DEVEL OPMENT AND MAINTENANCE EXPENDITURE OF RS.1,12,62,155/- INC URRED IN HIS LAND IN THE PERIOD BETWEEN 2005 TO 2011. WE NOTICE DURING THE COURSE OF HEARING AND FROM A PERUSAL OF THE ASSESSE ES STATEMENT OF FACTS FILED BEFORE THE CIT (A) IN PARA-3 THEREOF THAT HE HIMSELF COULD NOT FILE THE CORRESPONDING EVIDENCE DURING TH E COURSE OF ASSESSMENT. THE VERY FACTUAL POSITION CONTINUED BEF ORE THE CIT (A) AS WELL. WE THUS FIND NOT EVEN A PRIMA FACIE REASON TO INTERFERE WITH THE IMPUGNED DEVELOPMENT AND MAINTENANCE EXPEN SES DISALLOWANCE IN PRINCIPLE. THE FACT ALSO REMAINS TH AT SUCH AN EXPENDITURE OF LAND DEVELOPMENT IN THE NATURE OF LA ND LEVELLING, EARTH SOIL REMOVER, FENCING AND WATCH AND WARD ETC. , CANNOT BE ALTOGETHER RULED OUT. WE THEREFORE DEEM IT PROPER T HAT A LUMPSUM RELIEF OF RS.10 LAKHS OUT OF RS.1,12,62,155/- WOULD BE JUST AND PROPER WITH A RIDER THAT THE SAME SHALL NOT BE TREA TED AS A ITA NO 472 OF 2017 VINOD KUMAR MUKKA HYDERABAD PAGE 3 OF 4 PRECEDENT IN ANY OTHER CASE. THE ASSESSEE GETS PART RELIEF TO THE ABOVE EXTENT IN OTHER WORDS. 5. NEXT COMES SECTION 40A(3) DISALLOWANCE OF RS.26,11,435/- MADE IN BOTH THE LOWER PROCEEDINGS. LEARNED DR FAILED TO DISPUTE THAT THE ASSESSEE HAD OFFERED ITS BUSINESS INCOME UNDER THE PRESUMPTIVE TAX SCHEME U/S 44AD OF THE AC T. HON'BLE JURISDICTIONAL HIGH COURT IN INDWELL CONSTRUCTION V S. CIT (1998) 232 ITR 776 (AP) HOLDS THAT THE IMPUGNED DISALLOWAN CE PROVISION DO NOT APPLY IN CASE OF NON-MAINTENANCE OF BOOKS. W E ADOPT THE VERY REASONING AND DIRECT THE ASSESSING OFFICER TO DELETE THIS DISALLOWANCE. 6. LAST COMES INTEREST DISALLOWANCE ISSUE OF RS.1,25,492/- AGAINST ALLEGED CORRECT FIGURE OF RS. 89,182/-. LEARNED DR IS FAIR BY STATING THAT THE SAME REQUIRE D THE ASSESSING OFFICERS FRESH FACTUAL VERIFICATION. WE ORDER ACCO RDINGLY. 7. THIS ASSESSEES APPEAL IS TREATED AS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH APRIL, 2021. SD/- SD/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER HYDERABAD, DATED 9 TH APRIL, 2021. VINODAN/SPS ITA NO 472 OF 2017 VINOD KUMAR MUKKA HYDERABAD PAGE 4 OF 4 COPY TO: 1 VINOD KUMAR MUKKA C/O RAVINDRA CHENJI, ADVOCATE, C-308, 4-1- 970 AHUJA ESTATE, ABIDS, HYDERABAD 500001 2 ITO WARD 8(2) SIGNATURE TOWERS, HYDERABAD 3 CIT (A)-2, HYDERABAD 4 PR. CIT -2 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER