Gowthami Builders, Ravulapalem V. Income Tax Officer, Ward-2, Amalapuram

ITA 64/VIZ/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4952 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 16-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 64 / VIZ /201 8 (ASST. YEAR : 20 04 - 0 5 ) M/S. GOWTHAMI BUILDERS, 8 - 509, MAIN ROAD, RAVULAPALEM, E.G. DISTRICT. V S . IT O , WARD - 2 , AMALAPURAM . PAN NO. AABFG 0928 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 22 / 0 1 /201 9 . DATE OF PRONOUNCEMENT : 13 / 0 2 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , TIRUPATI , DATED 29 / 12 /201 7 FOR THE ASSESSMENT YEAR 200 4 - 0 5 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS A FIRM CARRYING ON BUSINESS IN CIVIL CONTRACTS, FILED ITS RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 4,23,990/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) , AND AFTER FOLLOWING DUE PROCEDURE, ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT'). IN 2 ITA NO. 64 /VIZ/2018 ( M/S. GOWTHAMI BUILDERS ) THE ASSESSMENT ORDER, THE ASSESSIN G OFFICER HAS NOTED TH A T ON EXAMINATION OF THE BOOKS OF ACCOUNT S , IT IS OBSERVED THAT THE ASSESSEE - FIRM INCURRED EXPENDITURE OF RS. 1,84,43,078/ - UNDER VARIOUS HEADS INCLUDING MATERIAL AND LABOUR PAYMENTS . OU T OF THIS EXPENDITURE , A MAJOR PART OF THE EXPENDITURE IS SUPPORTED BY SELF - MADE VOUCHERS AND MOST OF THESE VOUCHERS ARE CONSIDERED TO BE DEFECTIVE AND DO NOT CONTAIN FULL ADDRESSE S OF THE CLAIMANTS . ACCORDINGLY, THE ASSESSING OFFICER PROPOSED TO DISALLOW RS. 2.00 LAKHS OUT OF THE TOTAL EXPENDITURE CLAIMED AND THE SAME IS ADDED TO THE RETURNED INCOME. 3 . ON APPEAL, LD. CIT(A) ENHANCED THE DISALLOWANCE TO RS.3,16,912 BY ESTIMATING NET PROFIT AT 8%. 4 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 6 . THE ASSESSEE HAS INCURRED EXPENDITURE ON VARIOUS HEADS. WHEN THE ASSESSING OFFICER ASKED , ASSESSEE FILED ALL THE DETAILS , HOWEVER, THE ASSESSING OFFICER IS OF THE VIEW THAT SOME OF THE EXPENDITURE INCURRED BY THE ASSESSEE ARE SELF - MADE VOUCHERS. THEREFORE, HE HAS DISALLOWED AN AMOUNT OF RS. 2.00 LAKHS OUT OF THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE. TH E LD. CIT(A) 3 ITA NO. 64 /VIZ/2018 ( M/S. GOWTHAMI BUILDERS ) ENHANCED THE SAME TO RS. 3,16,912/ - WITHOUT GIVING ANY REASON FOR ENHANCEMENT AS AGAINST THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS. 2.00 LAKHS. I N OUR OPIN I ON, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED AN AMOUNT OF RS. 2.00 LAKHS BY CONSIDERING THE TOTAL FACTS AND CIRCUMSTANCES OF THE CASE . IN OUR OPINION, IN THE INTEREST OF JUSTICE, THE DISALLOWANCE TO THE EXTENT OF RS. 2.00 LAKHS IS JUSTIFIED AND THEREFORE WE REVERSE THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 3 T H DAY OF FEB . , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 3 T H FEB . , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. GOWTHAMI BUILDERS, 8 - 509, MAIN ROAD, RAVULAPALEM, E.G. DISTRICT . 2. THE REVENUE ITO, WARD - 2, AMALAPURAM. 3. THE PR. CIT , RAJAHMUNDRY. 4. THE CIT(A) , TIRUPATI. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.