M/s Totem Infrastructure Limited, Hyderabad V. ACIT, Circle-2(3), Hyderabad

ITA 650/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74693 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: S RAMA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. AHSA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.650/HYD/2013 ASSESSMENT YEAR 2009-10. M/S. TOTEM INFRASTRUCTURE LIMITED, -V- ACIT, CIR-2(3), HYDERABAD. BANJARA HILLS, HYDERABAD. PAN:AABCK 7020Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. RAMA R AO RESPONDENT BY SHRI D. SUDHAKAR RAO (DR) DATE OF HEARING 23-01-2014 DATE OF PRONOUNCEMENT 07-03-2014 ORDER PER CHANDRA POOJARI, A.M: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 8/1/2014 OF CIT (A)-II, HYDERABAD PERTAINING TO THE ASSESSMENT YEAR 2009/10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS BEFORE US:- `2. THE CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE APPELLANT COMPANY IS ENTANGLED IN PROBLEMS, WHICH RESTRICTED THE COMPANY FROM SUBMISSIONS OF INFORMATION AT THE TIME OF HEARING. 2 ITA NO.650/HYD/2013 M/S TO TEM INFRASTRUCTURE LIMITED, .HYD. 3. THE CIT (A) AND ASSESSING OFFICER ERRED BY TREA TING THE EXCESS RECEIPTS OF RS.14.78 CRORES, CREDITED IN FORM 26AS, AS UNDISCLOSED INCOME DESPITE NOTICING THE FACT THAT THESE RECEIPTS WERE PART OF CONTRACT RECEIPTS ONLY AND TDS CREDIT WAS ALSO ALLOWED BY TH E CIT (A). 4. THE CIT (A) OUGHT TO HAVE ADDED THE DIFFERENTIAL TURNOVER OF RS.14.78 CRORES TO THE TOTAL TURNOVER W HILE ESTIMATING THE INCOME. 5. THE CIT (A) FAILED TO APPRECIATE FACT THAT THE COURSE OF ESTIMATING THE NET INCOME IS ADOPTED ONLY WHEN T HE BOOKS ARE REJECTED IN WHICH CASE THERE CANNOT BE AN Y UNDISCLOSED INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTIONS. TH E ASSESSING OFFICER FOUND THAT THE TOTAL TURNOVER AS PER BOOKS OF ACCO UNTS WAS AT RS.295,10,50,017/- AS AGAINST TOTAL TURNOVER REFLEC TED IN FORM NO.26AS GENERATED FROM AST SYSTEM OF ITD APPLICATIO N AT RS.326,78,04,281/- AND THE DIFFERENCE WORKS OUT AT RS.14,77,77,984/-. THE ASSESSEE WAS CALLED FOR EXPLAIN THE DIFFERENCE. THE ASSESSEE FILED RECONCILIATION STATEMENT WHICH READS AS FOLLO WS:- TDS AS PER BOOKS (RS.) TDS CLAIMED (RS.) TDS ON OTHER RECEIPTS (RS.) TDS ON MOBI- LISATION ADVANCE (RS.) ALLOWABLE CLAIM OF TDS (RS.) 4,74,55,469 4,91,02,006 31,46,147 45,87,767 4,60,13,849 3.1 ACCORDING TO THE ASSESSEE, AN AMOUNT OF RS.24,9 2,02,616/- WAS RECEIVED BY THE ASSESSEE AS MOBILISATION ADVANCE A ND ANOTHER AMOUNT OF RS.12,82,47,788/- BY WAY OF PAYMENT RECOG NISED IN NEXT ASSESSMENT YEAR. HOWEVER, THE ASSESSING OFFICER OB SERVED THAT EVEN AFTER CONSIDERING NET DIFFERENCE OF RS.14,77, 77,994/- ON THE TURNOVER BOOKED IN THE BOOKS OF ACCOUNTS AND TURNO VER REFLECTED IN FORM 26AS AND ACCORDINGLY, THE SAME WAS CONSIDERED AS ADDITIONAL INCOME OF THE ASSESSEE. 3 ITA NO.650/HYD/2013 M/S TO TEM INFRASTRUCTURE LIMITED, .HYD. 4. ON APPEAL, THE CIT (A) CONFIRMED THE ACTION OF T HE ASSESSING OFFICER. AGAINST THE DECISION OF THE CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED AR FILED A STATEMENT SHOWING THE REC ONCILIATION OF THE TURNOVER PLACED AT PAGE-48 OF THE PAPER BOOK AN D SUBMITTED THAT THE DIFFERENCE OF RS.3,23,30,176/- AND THE INCOME ON THIS TURNOVER WILL BE ESTIMATED AT 8% AND NOT THE GROSS TURNOVER TO BE CONSIDERED AS INCOME OF THE ASSESSEE. 6. ON THE OTHER HAND, LEARNED DR RELIED UPON THE O RDER OF THE CIT (A). 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THERE IS A DI FFERENCE BETWEEN THE TURNOVER SHOWN IN THE BOOKS OF ACCOUNTS AND TURNOVE R REFLECTED IN FORM NO.26AS GENERATED FROM AST SYSTEM OF ITD APPLI CATION. THE RECONCILIATION FURNISHED BY THE ASSESSEE IS NOT SUP PORTED BY ANY COGENT MATERIAL, LIKE COPY OF ACCOUNT WITH THE CONC ERNED CUSTOMER/PARTY. IN OUR OPINION, THE ENTIRE TURNOVE R DIFFERENCE OF RS.14,77,77,984/- IS TO BE CONSIDERED AS SUPPRESSED TURNOVER. REGARDING CONSIDERATION OF THE ENTIRE TURNOVER AS I NCOME, THE PLEA OF THE ASSESSEE IS THAT ONLY NET PROFIT IS TO BE CONSI DERED AT 8%. IN THIS CASE, THE ASSESSEE FAILED TO ESTABLISH THAT THE COR RESPONDING EXPENDITURE RELATING TO THIS TURNOVER HAS NOT AT AL L BEEN BOOKED IN ITS BOOKS OF ACCOUNTS. THE ASSESSEES PLEA CAN BE ACCE PTED ONLY IF THE CORRESPONDING EXPENDITURE RELATING TO THIS TURNOVER IS NOT AT ALL BOOKED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. SIN CE THE ASSESSEE FAILED TO SUBSTANTIATE THAT THE EXPENDITURE RELATIN G TO THIS TURNOVER HAS NOT AT ALL BEEN CLAIMED IN ITS REGULAR BOOKS OF ACC OUNTS, WE ARE NOT INCLINED TO ALLOW THE SAME. BEING SO, IT IS TO BE HELD THAT THE CORRESPONDING EXPENDITURE RELATING TO THIS SUPPRESS ED TURNOVER HAS ALREADY BEEN BOOKED BY THE ASSESSEE, THE ENTIRE UND ISCLOSED TURNOVER IS TO BE CONSIDERED AS INCOME OF THE ASSESSEE. ACC ORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE LOWER A UTHORITIES. IN THIS 4 ITA NO.650/HYD/2013 M/S TO TEM INFRASTRUCTURE LIMITED, .HYD. VIEW OF THE MATTER, WE CONFIRM THE ORDER OF THE CIT (A) AND REJECT THE GROUNDS RAISED BY THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 07-03-20 14. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 7 TH MARCH, 2014. JMR* COPY TO:- 1) M/S TOTEM INFRASTRUCTURE LIMITED, H.NO.8-2-334/B /2, ROAD NO.5, AVENUE-7, BANJARA HILLS, HYDERABAD. 2) ACIT, CIR-2(3), HYDERABAD. 3) CIT(A)-III, HYDERABAD. 4) CIT-II, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.