Sri Hanuman Constructions, Hyderabad V. Income Tax Officer, Ward-11(1), Hyderabad

ITA 643/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0860 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 44AD; 143(3); 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 643 /HYD/20 19 ASSESSMENT YEAR: 20 14 - 15 M/S. SRI HANUMAN CONSTRUCTIONS, HYDERABAD 500 033. PAN: ABDFS 0570 M VS. THE INCOME TAX OFFICER, WARD - 11(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K.C. DEVDAS REVENUE BY: SRI ROHIT MUJUMDAR, DR DATE OF HEARING: 28/04/2021 DATE OF PRONOUNCEMENT: 13 /07/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 1, HYDERABAD IN APPEAL NO.0512/2016 - 17/ITO, WARD - 11(1)/CIT(A) - 1/HYD/2018 - 19, DATED 15/3/20 - 19 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE AY 2014 - 15. 2. THE ASSESSEE HAS RAISED SIX GROUNDS IN HIS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT (A) HAS ERRED IN DIRECTING THE LD. AO TO ESTIMATE THE INCOME OF THE ASSESSEE AT 4% OF THE TURNOVER AR ISING OUT OF SUB - CONTRACT AS AGAINST THE ESTIMATE MADE BY THE LD. AO AT 6% OF THE TURNOVER. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF UNDERTAKING SUB - CONTRACTS FILED HIS RETURN OF INCOME ON 30/11/201 4 ADMITTING HIS INCOME AT RS. 40,33,570/ - . THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY UNDER CASS BECAUSE OF THE HUGE INCREASE IN SUNDRY CREDITORS AND LOW INCOME. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO PRODUCE THE REQUIRED DOCUMENTS WHICH ARE NECESSARY TO ASSESS THE INCOME OF THE ASSESSEE. THEREFORE, THE LD. AO ESTIMATED THE INCOME OF THE ASSESSEE AT 6% OF HIS TURNOVER OF RS. 50,39,40,733/ - WHICH WORKS OUT TO RS. 3,01,76,443/ - . S INCE THE ASSESSEE HAD ALREADY DECLARED HIS INCOME AS RS. 40,33,570/ - THE DIFFERENCE AMOUNT OF RS. 2,61,42,873/ - [ RS. 3,01,76,443 - RS. 40,33,570] WAS ADDED TO HIS INCOME. ON APPEAL, THE LD. CIT (A) DIRECTED THE LD. AO TO ESTIMATE THE INCOME OF THE ASSESS EE AT 4% OF THE ASSESSEES TURNOVER BY OBSERVING AS UNDER: 5.4 . I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. A REVISED REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER FOR VERIFICATION O F BOOKS OF ACCOUNTS WHICH WERE NOT FILED DURING ASSESSMENT PROCEEDINGS , HOWEVER, THE ASSESSING OFFICER HAS NOT SUBMITTED THE SAME TILL DATE. THE APPELLANT BEFORE ME SUBMITTED HONBLE ITAT ORDER IN THE CASE OF SRI HANUMAN INFRA PRIVATE LIMITED DATED 31/01/ 2019, WHEREIN FOR THE SAME ISSUE THE HONBLE ITAT ESTIMATED THE INCOME @ 4% OF ITS TOTAL TURNOVER. BY FOLLOWING THE HONBLE ITAT, HYDERABAD, THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE THE NET PROFIT @ 4% ON ITS TOTAL TURNOVER. 4. THE LD. AR ARGUED BEFORE US REQUESTED FOR GRANTING FURTHER RELIEF TO THE ASSESSEE WHEREAS THE LD. DR ARGUED IN SUPPORT OF THE ORDERS OF THE LD. REVENUE AUTHORITIES. 3 5. AT THE OUTSET, WE FIND THAT THE ASSESSING OFFICER HAD FAILED TO SUBMIT A REMAND REPORT THOUGH THE LD. CIT (A) HAS CALLED FOR. IN THIS SITUATION, THE NATURE AND GENUINENESS OF THE BUSINESS CONDUCTED BY THE ASSESSEE CANNOT BE ASCERTAINED. IF THE ASSESSEE IS A GENUINE SUB - CONTRACTOR AND HAS GENUINELY RENDERED SUCH SERVICES, THEN IT IS NECESSA RY TO PONDER OVER THE ISSUES RAISED BY THE ASSESSEE. MOREOVER THE STRINGENT PROVISIONS OF SECTION 44AD OF THE ACT IN THE CASE WHERE THE PROFIT IS DECLARED AT A LESSER RATE THAN WHAT IS PRESCRIBED UNDER THE ACT WITH RESPECT TO SPECIFIED ASSESSEES CANNOT BE SIMPLY BRUSHED ASIDE WHILE DECIDING THE CASE OF THE ASSESSEE WHOSE TURNOVER IS MUCH LARGER. THEREFORE, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE ENTIRE MATTER BACK TO THE FILE OF THE LD. AO IN ORDER TO E XAMINE THE BUSINESS CONDUCTED BY THE ASSESSEE BY VERIFYING THE BOOKS OF ACCOUNTS, BANK STATEMENTS AND OTHER RECORDS OF THE ASSESSEE AND THEREAFTER PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW AND MERITS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREIN ABOVE. PRONOUNCED IN THE OPEN COURT ON THE 13 TH JULY, 2021 . SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 13 TH JULY , 2021 OKK COPY TO: - 4 1) M/S. HANUMAN CONSTRUCTIONS, PLOT NO. 339, ROAD NO.23/A, JUBILEE HILLS, HYDERABAD. 2) INCOME TAX OFFICER, WARD - 11(1) , HYDERABAD. 3) THE CIT (A) - 1, HYDERABAD. 4) THE PR. CIT - 5, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE