THE ACIT, Eluru V. M/s Boppudi Ravichandra, Eluru

ITA 595/VIZ/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1247 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M GANGA RAJU SARMA
• Keywords: Business income; Depreciation
• Section: 143(3)

Judgement Text

ITA NOS.12/VIZAG/2013 & 595/VIZAG/2014 C.O. NOS.37/VIZAG/2013 & 8/VIZAG/2015 BOPPUDI RAVICHANDRA, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.12/VIZAG/2013 & 595/VIZAG/2014 ( / ASSESSMENT YEARS: 2009-10 & 2010-11 RESPECTIVEL Y) ACIT, CIRCLE - 1, ELURU VS. BOPPUDI RAVICHANDRA ELURU [PAN: ACKPR1360C ] ( % / APPELLANT) ( &'% / RESPONDENT) C.O. NOS.37/VIZAG/2013 & 8/VIZAG/2015 (ARISING OUT OF I.T.A.NOS.12/VIZAG/2013 & 595/VIZAG /2014 RESPECTIVELY) ( / ASSESSMENT YEARS: 2009-10 & 2010-11 RESPECTIVEL Y) BOPPUDI RAVICHANDRA ELURU VS. ACIT, CIRCLE - 1, ELURU ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHR I M.N. MURTHY NAIK, DR / RESPONDENT BY : SHRI M. GANGA RAJU SARMA, AR / DATE OF HEARING : 24.03.2016 / DATE OF PRONOUNCEMENT : 07.04.2016 ITA NOS.12/VIZAG/2013 & 595/VIZAG/2014 C.O. NOS.37/VIZAG/2013 & 8/VIZAG/2015 BOPPUDI RAVICHANDRA, ELURU 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE APPEALS FILED BY THE REVENUE AND CROSS OBJEC TIONS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPA RATE, BUT IDENTICAL ORDERS OF CIT (APPEALS), GUNTUR DATED 10.10.2012 FO R THE ASST. YEAR 2009-10 AND CIT(A), VISAKHAPATNAM DATED 9.9.2014 FO R THE ASST. YEAR 2010-11. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED OFF, BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.595/VIZAG/2014: 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXECUTION OF CONTRACT WORK FROM THE GOV ERNMENT DEPARTMENTS LIKE PANCHAYATI RAJ, R & B, ETC. THE A SSESSEE HAD FILED A RETURN OF INCOME BY DECLARING TOTAL INCOME OF ` 37,03,430/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. AFTER D UE PROCESS, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME T AX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') AND THE A.O. HAS TAKEN GROSS CONTRACT RECEIPTS AT ` 7,95,85,207/- AND ESTIMATED THE INCOME AT 10% BY DISALLOWING THE DEPRECIATION. ON APPEAL, THE ASSES SEE HAS SUBMITTED BEFORE THE CIT(A) THAT THE ESTIMATION AT 10% WAS TO O HIGH AND ASKED ITA NOS.12/VIZAG/2013 & 595/VIZAG/2014 C.O. NOS.37/VIZAG/2013 & 8/VIZAG/2015 BOPPUDI RAVICHANDRA, ELURU 3 THAT REASONABLE ESTIMATION MAY BE MADE. THE LD. CI T(A) BY CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALS O CONSIDERING THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2009-10 , HE HAS ESTIMATED AT 8% OF THE CONTRACT RECEIPTS OF ` 7,95,85,207/-. 3. AGGRIEVED, REVENUE AS WELL AS ASSESSEE ARE IN AP PEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORDS. WE FIND THAT THE LD. CIT(A) AFTER CONSIDERING THE NATURE OF THE BUSINESS AND CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, ESTIMATED AT 8% OF THE CONTRACT RECEIPTS. WE FIND T HE ESTIMATION MADE BY THE CIT(A) IS FAIR AND REASONABLE AND NO INTERFE RENCE IS CALLED FOR. THEREFORE, THE GROUNDS OF APPEAL RAISED BY THE REVE NUE ARE DISMISSED. 5. IN VIEW OF THE DISMISSAL OF THE REVENUE APPEAL, THE C.O. NO.8/VIZAG/2015 FILED BY THE ASSESSEE BECOMES INFRU CTUOUS AND HENCE DISMISSED. ITA NO.12/VIZAG/2013: 6. IN SO FAR AS ASSESSMENT YEAR 2009-10 IS CONCERNE D, THE A.O. HAS ESTIMATED INCOME AT 8% OF THE GROSS RECEIPTS. ON A PPEAL, THE LD. CIT(A) REDUCED IT TO 6.5% BASED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF DCIT RAJAHMUNDRY VS. M. RAMA RAO VIDE ITS O RDER IN ITA ITA NOS.12/VIZAG/2013 & 595/VIZAG/2014 C.O. NOS.37/VIZAG/2013 & 8/VIZAG/2015 BOPPUDI RAVICHANDRA, ELURU 4 NO.184/VIZAG/2010 DATED 27.12.2010. WE HAVE GONE TH ROUGH THE ORDER OF THE CIT(A). THE CIT(A) HAS NOT GIVEN ANY REASON TO ADOPT 6.5% EXCEPT STATING THAT HE HAS ADOPTED A MIDDLE COURSE BY FOLLOWING THE JURISDICTIONAL TRIBUNAL ORDER IN THE CASE OF M. RAM A RAO (SUPRA). 7. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 8. WE FIND THAT FOR ASSESSMENT YEAR 2010-11, WE HAVE ALREADY ACCEPTED THE CIT(A)S ORDER IN RESPECT OF ESTIMATIO N OF INCOME AT 8% ON GROSS RECEIPTS. WE FIND THAT THE ORDER PASSED BY L D. CIT(A) IN THE ASSESSMENT YEAR 2010-11 IS FAIR AND REASONABLE. IN OUR OPINION, THE SAME MAY BE ADOPTED FOR THE ASSESSMENT YEAR 2009-10 ALSO. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER PASSED BY CIT(A) AND DIRECT THE A.O. TO ADOPT THE ESTIMATION OF INCOME AT 8% INSTEAD OF 6.5% ON THE GROSS BUSINESS RECEIPTS. THUS, THE GROUND OF APPEAL RAIS ED BY THE REVENUE IS PARTLY ALLOWED. 9. SO FAR AS INTEREST INCOME IS CONCERNED, IT WAS S UBMITTED BEFORE THE LD. CIT(A) THAT ASSESSEE HAS MADE A DEPOSIT FOR THE PURPOSE OF FURNISHING A BANK GUARANTEE AND THEREFORE, IT HAS T O BE TREATED AS A BUSINESS INCOME. THE LD. CIT(A) ACCEPTED THE SAME AND TREATED IT AS A BUSINESS INCOME. WE FIND THAT THE ASSESSEES BUSINE SS IS TO UNDERTAKE ITA NOS.12/VIZAG/2013 & 595/VIZAG/2014 C.O. NOS.37/VIZAG/2013 & 8/VIZAG/2015 BOPPUDI RAVICHANDRA, ELURU 5 THE CONTRACT WORKS FROM PANCHAYATI RAJ AND R & B DE PARTMENTS. ASSESSEE HAS KEPT SOME DEPOSITS IN THE BANK AND REC EIVED THE INTEREST INCOME. THERE IS NOTHING ON THE RECORD TO SHOW THA T DEPOSITS WERE MADE FOR THE PURPOSE OF BUSINESS. THE INTEREST INC OME RECEIVED BY THE ASSESSEE CANNOT BE TREATED AS AN INCOME FROM BUSINE SS. IT HAS TO BE TREATED ONLY AS AN INCOME FROM OTHER SOURCES. TH IS GROUND OF APPEAL RAISED BY THE REVENUE IS ALLOWED. 10. IN THE RESULT, THE REVENUE APPEAL IN ITA NO.12/ VIZAG/2013 IS PARTLY ALLOWED. 11. SO FAR AS CO NO.37/VIZAG/2013 IS CONCERNED, IN VIEW OF OUR ABOVE ORDER, THE C.O. BECOMES INFRUCTUOUS AND HENCE DISMI SSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7 TH APR16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 7.4.2016 VG/SPS ITA NOS.12/VIZAG/2013 & 595/VIZAG/2014 C.O. NOS.37/VIZAG/2013 & 8/VIZAG/2015 BOPPUDI RAVICHANDRA, ELURU 6 '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-1, ELURU 2. / THE RESPONDENT BOPPUDI RAVICHANDRA, 28-1-33/2, SANTHI NAGAR, 3 RD LANE, ELURU. 3. ) / THE CIT, GUNTUR 4. ) ( ) / THE CIT(A),GUNTUR 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM