Shivarama Contractors Private Limited, Kurnool, Kurnool V. ITO, Ward-1, Nandyal, Nandyal

ITA 628/HYD/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6013 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-05-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITHARAM
• Assessee Lawyers: K A SAI PRASAD
• Section: 143(3)

Judgement Text

ITA NO 628 OF 2017 SHI VARAMA CONTRACRTORS P LTD KURNOOL. PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.628/HYD/2017 (ASSESSMENT YEAR: 2010-11) M/S. SHIVARAMA CONTRACTORS PRIVATE LIMITED KURNOOL PAN: AAICS9565M VS INCOME TAX OFFICER WARD-1, NANDYAL (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.A. SAI PRASAD FOR REVENUE : SHRI M. SITHARAM, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2010-11. IN T HIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE LEARNED CIT (A)-KUNROOL, DATED 16.01.2017 AND HAS RAISED THE FO LLOWING REVISED GROUNDS OF APPEAL: THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTI FIED IN NOT DIRECTING THE AO TO ESTIMATE INCOME @8% ON T HE GROSS BILLS AFTER DEDUCTING THE DEPARTMENT RECOVERI ES. 2. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN NOT CONSIDERING THE CLAIM OF THE APPEL LANT THAT NO PROFIT ELEMENTS INCLUDED IN THE GROSS REC EIPTS SHOULD BE EXCLUDED IN THE ESTIMATION OF INCOME. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, DOING BUSINESS OF CIVIL CONTRACT WORKS, FILED ITS RETURN DATE OF HEARING: 24.05 . 201 8 DATE OF PRONOUNCEMENT: 31.05.2018 ITA NO 628 OF 2017 SHI VARAMA CONTRACRTORS P LTD KURNOOL. PAGE 2 OF 3 OF INCOME FOR THE A.Y 2010-11 ON14.10.2010. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE A O CALLED FOR VARIOUS DETAILS WHICH COULD NOT BE FURNISHED BY THE ASSESSEE. THEREFORE, THE AO HELD THAT THE ASSESSEE HAS WILLFU LLY NOT FURNISHED THE BOOKS OF ACCOUNT AND ESTIMATED THE IN COME @8% OF THE GROSS RECEIPTS AND BROUGHT IT TO TAX. AGGRIEVED , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRME D THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE, THOUGH IS NOT CHALLENGING THE ESTIMAT ION OF INCOME @8% OF THE GROSS RECEIPTS, IS ONLY SEEKING EXCLUSIO N OF THE NON- PROFIT ELEMENT RECEIPTS FROM THE GROSS RECEIPTS BEF ORE ESTIMATION OF INCOME. HE HAS DRAWN OUR ATTENTION TO THE STATEMENT OF FACTS FILED BEFORE THE TRIBUNAL WHEREIN THE DETAILS OF THE DEPA RTMENT RECOVERIES SUCH AS SALES TAX, CESS TO THE EXTENT OF RS.1,03,97,856 ARE GIVEN AND SUBMITTED THAT THEY HAVE ALSO BEEN I NCLUDED IN THE GROSS RECEIPTS OF RS.14,18,364. HE SUBMITTED THAT I N SUCH RECEIPTS, THERE IS NO PROFIT ELEMENT AND THEREFORE, THEY SHOULD BE EXCLUDED. THE LEARNED DR ALSO WAS HEARD. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE AGREE THAT THE CONTENTIONS OF THE ASS ESSEE THAT THE RECEIPTS WHICH DO NOT HAVE ANY PROFIT ELEMENT HAVE TO BE EXCLUDED FROM THE GROSS TURNOVER BEFORE ESTIMATING THE INCOM E ON THE BASIS OF PERCENTAGE OF THE TURNOVER. THIS VIEW WAS ALSO T AKEN BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S . C. ESWARA REDDY & CO. VS. ASSTT. CIT IN ITA NOS.668 & 670/HYD /2009 DATED ITA NO 628 OF 2017 SHI VARAMA CONTRACRTORS P LTD KURNOOL. PAGE 3 OF 3 31.01.2011 WHEREIN THE INCOME FROM THE CONTRACTS WA S ESTIMATED AT 8% AND A SIMILAR OBSERVATION HAS BEEN MADE. RESP ECTFULLY FOLLOWING THE SAME, WE DIRECT THE AO TO RE-COMPUTE THE TAXABLE INCOME BY ESTIMATING 8% OF THE TURNOVER AFTER EXCLU DING THE RECEIPTS WHICH DO NOT HAVE ANY PROFIT ELEMENT IN TH EM. 5. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2018. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST MAY 2018. VINODAN/SPS COPY TO: 1 C/O. CH. PARTHASARATHY & CO. 1-1-298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST.NO.1, ASHOKNAGAR, HYDERABAD 50 0020 2 ITO WARD - 1, SANJEEV NAGAR, NANDYAL, KURNOOL 518001 3 CIT (A)-KURNOOL 4 PR. CIT - KURNOOL 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER