Sushee Infra & Mining Limited , Hyderabad V. Dy. Commissioner of Income Tax , Central Circle-2(2), Hyderabad

ITA 592/Hyd/2020

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The case involves Sushee Infra and Mining Ltd, which faced additions to its income assessments for the assessment years 2012-13 and 2013-14 following a search operation. During the search, the Managing Director (M.D) admitted to additional income on sub-contracts, which was later partially retracted. The Assessing Officer made additions based on the documents and statements made during the search. The CIT (A) reduced these additions after considering the income already shown in the books. The Tribunal upheld the CIT (A)'s decision, agreeing that the additional income admitted was not reflected in the books and that the additions were based on solid incriminating evidence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129544 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 05-06-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 01-11-2020
• Other Referred Cases: Kermex Microsystems (India) Ltd
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Retraction
• Section: 13

Judgement Text

ITA Nos 591 and 592 Sushee Infra and Mining Ltd Hyderabad Page 9 of 13 premises of the assessee and during the course of search, the M.D of the assessee had admitted and disclosed the income @ 6% on the sub-contract amount. The above said statement was reaffirmed by the M.D by filing an affidavit before the DDIT(Inv) where again the M.D admitted the declaration of the additional income of Rs.5,14,46,375/- for the year under consideration. The above stated fact stood to be retracted by the assessee after a time gap of 14 months by their retraction. However, the Assessing Officer in Para 11 of his order had elaborately dealt with the issue and has concluded that the retraction made by the assessee vide their communication dated 3.10.2017 is not sustainable and is an afterthought and is not supported by any documentary evidence. 10. Quite clearly, the learned Assessing Officer on the basis of the documents of sub-contractors agreements and the books of account and the return of income for the year under consideration had made addition of Rs.5,14,46,375/-, In appeal, the addition of Rs.5,14,46,375/- was reduced by the learned CIT (A) to an amount of Rs.2,93,89,147/-. The learned CIT (A) as mentioned in Para 5.5 (Supra), has given credit of the income already shown in the books of account to the amount of Rs.2,20,57,227/-. The learned AR during the course of submission has not disputed that the credit shown by the assessee in the books of account for the sub-contract amount was not exceeding the amount i.e. Rs.2,20,57,227/-for which credit has already been given by the CIT (A). Further, during the course of the argument, the learned AR was not able to demonstrate on the basis of the paper book filed before us that the credit or the income shown in this sub-contract was over and above the amount of Rs.2,20,57,227/- for the year under consideration. Admittedly, the assessee in the statement and in the affidavit filed ITA Nos 591 and 592 Sushee Infra and Mining Ltd Hyderabad Page 10 of 13 after the search had admitted and disclosed additional income of Rs.5,17,46,375/-. However, despite the above, the assessee was given the benefit of Rs.2,20,57,227/- by the learned CIT (A) and thereby restricting the addition to Rs.2,93,89,147/-. In our view, the admission of the additional income by the assessee was over and above the income already reflected in the books of account of the assessee. In the present case, the search has taken place at the office premises of the assessee in the year 2016 and the books of accounts and other documents were readily available with the M.D of the assessee, based on document the statement was made & recorded by the Revenue. In our considered opinion, once the assessee had given the statement based on the documents found and available during the course of search including the books of accounts, then the Assessing Officer was right within law to make the addition on the basis of the incriminating material (books of account, sub-contract agreement) and other material available with the Assessing Officer including the income declared in the return. Admittedly, the contract, sub-contract, return of income and the income declared were available with the Assessing Officer and the above said facts were confirmed during the course of search, furthermore assessee in the duly signed sworn statement and the affidavit had corroborated and admitted the income @ 6% on sub-contract. In our view, the view taken by the learned CIT (A) is already benevolent in nature and the CIT (A) had already reduced the income which was already disclosed by the assessee in its books of account, though in the statement, the assessee has agreed to offer additional income of Rs.5,14,36,375/- for the year under consideration. In our view, the additional income disclosed and admitted by the assessee during the search cannot be construed to include the income already shown in the books of account. But nonetheless, as the case may be, such assessee ITA Nos 591 and 592 Sushee Infra and Mining Ltd Hyderabad Page 11 of 13 cannot be worsen off by filing an appeal before the Tribunal and more particularly when the Revenue is not in appeal before the Tribunal, hence we are not withdrawing the relief already granted by the learned CIT (A) and sequitur to that is that we are upholding the order passed by the learned CIT (A) where he confirmed the addition of Rs.2,93,89,147/-. 10.1 There is one more reason to uphold the addition of Rs.2,93,89,147/- as the jurisdictional High Court in the case of Kermex Microsystems (India) Ltd (Supra) had held that in case the admissions were made during the course of search/survey, admitted the additional tax liability, than the assessee by doing so had thereby prevented the revenue to proceed further, hence addition made on the basis of such statement cannot be faulted with. 10.2 There is yet another reason to uphold the order passed by the Assessing Officer/CIT (A) for the year under consideration. As mentioned by the learned CIT (A) in Para 5.5 wherein the learned CIT (A) had reproduced the finding recorded in the case of the assessee for the immediately preceding year i.e. for A.Y 2011- 12. In that year, the total sub-contract amount was Rs.100,72,24,523/- and as against the said sub-contract amount, the assessee had admitted an income of Rs.975,33,607/-. Admittedly, the assessee was merely a sub-contractor and has not executed any work for the A.Ys 2011-12, 2012-13 & 2013-14 and had merely passed on the said contract to other parties. Similarly, during the year under consideration, the total sub-contract amount was aggregating to Rs.85,74,39,587/- to which the assessee had admitted the profit at Rs.514,46,375/- which is 6% of the sub-contract amount. If the profit ratio of the assessee for ITA Nos 591 and 592 Sushee Infra and Mining Ltd Hyderabad Page 12 of 13 the A.Y 2011-12 is compared with the profit ratio of the assessee declared and estimated by the Assessing Officer for A.Y 2012-13, then it is clear that the Assessing Officer has restricted the profit to 6% as against 9% which was for the A.Y 2011-12. For estimating the profit, the past history of the assessee was also considered and hence we do not find any error in the order passed by the learned CIT (A). In the light of the above we do not find any merit in the arguments advanced by the assessee. Accordingly, the appeal of the assessee is dismissed. 11. With respect to the appeal for the A.Y 2013-14 is concerned, all the facts are identical, save except in Para 5.5, the learned CIT (A) had only granted relief of Rs.19,53,558/- as the said amount was only shown by the assessee during the year under consideration in its books of account as income on a/c of sub-contract for Rs.86,16,22,921/-. Thus, the learned CIT (A) had sustained the addition of Rs.4,97,43,821/-. We do not find any reason to deviate from our view taken in the A.Y 2012-13 in ITA No.591/Hyd/2020. Therefore, following the reasonings given by us in ITA No.591/Hyd/2020 mutatis mutandis, we uphold the addition, and the appeal of the assessee is dismissed and therefore, the addition of Rs.4,97,43,821/- is upheld. 12. In the result, both the appeals filed by the assessee are dismissed. Order pronounced in the Open Court on 7 th June, 2023. Sd/- Sd/- (R.K. PANDA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 7 th June, 2023. Vinodan/sps