The ACIT.,Cir-1, Warangal V. Sri Banda Prabhakar Reddy, Warangal

ITA 607/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69922 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: K V CHALAMAIAH
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 607/HYD/2013 ASSESSMENT YEAR: 2009-10 THE ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE 1, HYDERABAD. VS. SRI BANDA PRABHAKAR REDDY, WARANGAL. PAN ACEPB2998 N APPELLANT RESPONDENT APPELLANT BY: SHRI B. YADAGIRI RESPONDENT BY: SRI K.V. CHALAMAIAH DATE OF HEARING: 13.11.2013 DATE OF PRONOUNCEMENT: .11.2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD, DATED 30.01.2013 FOR THE ASSESSMENT YEAR 2009-10 WHEREIN THE REVENUE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) HAS ERRED BOTH IN FACTS AND IN LAW IN GIVING RELIEF INSTEAD OF APPRECIATING THE FACT THAT THE INCOME ESTIMATED AT 8% BY THE ASSESSING OFFICER WAS CORRECT. 2. WHETHER THE CIT(A) WAS CORRECT IN NOT CONSIDERIN G THE DECISION OF ITAT IN THE CASE OF M/S TEJA CONSTRUCTI ON, WHEREIN INCOME FROM SUB-CONTRACT WORK WAS ESTIMATED AT 8% OF THE NET RECEIPTS AFTER CONSIDERING THE DEDUCT IONS. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS ENGAGED IN THE BUSINESS OF EXECUTION OF CIVIL CONT RACTS WORKS. ON BEING ASKED BY THE ASSESSING OFFICER TO PRODUCE BOOKS OF ACCOUNT, THE ASSESSEE PRODUCED BILLS/VOUCHERS, WHIC H ACCORDING TO THE ASSESSING OFFICER, WERE NON VERIFI ABLE MANNER. AS ASSESSEE FAILED TO PRODUCE THE REQUIRED BOOKS OF ITA NO. 607/HYD/2013 SRI BANDA PRABHAKAR REDDY ============================= 2 ACCOUNT, THE ASSESSING OFFICER ESTIMATED THE INCOME ON A RATIONAL BASIS AS PER MATERIAL AVAILABLE ON RECORD AND COMPLETED THE ASSESSEE U/S 144 ESTIMATING THE INCOM E @ 8% OF GROSS RECEIPTS. THE GROSS RECEIPT OF ASSESSEE WE RE RS. 18,42,76,521/-, ON WHICH, ESTIMATED NET PROFIT @ 8% COMES TO RS. 1,47,42,122/-. 3. ON APPEAL, THE CIT(A) FOLLOWING THE DECISION OF THE COORDINATE BENCH OF TRIBUNAL, HYDERABAD, ESTIMATED THE PROFIT OF THE ASSESSEE AT 6% AS AGAINST 8% BY THE ASSESSIN G OFFICER. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US CONTENDING THAT INCOME ESTIMATED AT 8% BY THE ASSES SING OFFICER IS CORRECT. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. THE CONTENTION OF THE LEARNED DR BEFORE US IS THAT THE SUBMISSIONS OF THE ASSESSEE THAT IT CAR RIED ON SUB- CONTRACT WORKS WERE CONSIDERED BY THE CIT(A) AND DI RECTED THE ASSESSING OFFICER TO ESTIMATE THE PROFIT AT 6% ON C ONTRACT RECEIPTS. ACCORDING TO THE LEARNED DR, THERE IS NOT HING ON RECORD TO SHOW THAT THE ASSESSEE HAS CARRIED SUB-CO NTRACT WORKS AND THEREFORE THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THE ISS UE. WE ACCEPT THE SUBMISSIONS OF THE LEARNED DR AND RESTOR E THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECID E THE ISSUE CONSIDERING THE DECISION OF THE COORDINATE BENCH IN THE CASE C. ESWARA REDDY & CO. IN ITA NOS. 668 & 670/HYD/200 9 AND OTHERS FOR AYS 2003-04 AND 2004-05 VIDE ORDER DATED 31 ST JANUARY, 2011 WHEREIN THE COORDINATE BENCH HELD AS FOLLOWS: 10. WE HAVE ALSO CAREFULLY GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE CIT(A) AFTER REFERRING T O THE DECISION OF THIS TRIBUNAL IN THE CASE OF KRISHNAMOH AN ITA NO. 607/HYD/2013 SRI BANDA PRABHAKAR REDDY ============================= 3 CONSTRUCTIONS IN ITA NOS. 116 AND 117/HYD/2007 AND THE SPECIAL BENCH DECISION IN ARIHANT BUILDERS, 291 ITR 41 (SB) ESTIMATED THE PROFIT AT 8% FOR MAIN CONTRAC T AND FOR SUB-CONTRACT AT 5%. IT MAY NOT BE OUT OF PLACE TO MENTION THAT THIS TRIBUNAL UNIFORMLY ESTIMATING THE PROFIT FROM MAIN CONTRACT AT 8% TO 12.5% DEPENDING UPON TH E FACTUAL SITUATION AND 5% TO 7% ON THE SUB CONTRACT DEPENDING UPON THE FACTUAL SITUATION. THEREFORE, IN OUR OPINION, ESTIMATION OF PROFIT AT 8% BY THE CIT(A) O N MAIN CONTRACT AND AT 5% ON SUB-CONTRACT IS JUSTIFIED. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AU THORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 6. IN VIEW OF THE ABOVE, IF THE ASSESSEE HAS DONE S UB- CONTRACT WORKS, THE ASSESSING OFFICER IS DIRECTED T O APPLY THE NET PROFIT @ 6% ON THE GROSS RECEIPTS. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATI STICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2013 SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 13 TH NOVEMBER, 2013 KV COPY FORWARDED TO: 1. ACIT, CIRCLE 1, WARANGAL 2. SRI BANDA PRABHAKAR REDDY, H.NO. 5-11-37, NAYEEMNAGAR, HANMAKONDA, WARANGAL. 3. THE CIT(A)-VI, HYDERABAD. 4. THE CIT-VI, HYDERABAD 5. THE DR ITAT, HYDERABAD