DIC NCC (JV), Hyderabad V. Addl.CIT, Range-6, Hyderabad

MA 45/HYD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1848 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 14-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER MISC. APPLICATION N O.45/HYD/2014 (IN ITA NO.1649/HYD/11) : ASSESSMENT YEAR 2006 - 07 M/S. DIC NCC(JV), HYDERABAD ( PAN - AAACU 4079 Q) V/S. A DDL . COMMISSIONER OF INCOME - TAX RANGE 6, HYDERABAD (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI S.RAMA RAO RESPONDENT BY : SMT. K.HARITHA, DR DATE OF HEARING 11.4.2014 DATE OF PRONOUNCEMENT 21.5.2014 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: BY THIS APPLICATION UNDER S.254(2) OF THE INCOME - TAX ACT, 1961, ASSESSEE - APPLICANT SEEKS RECTIFICATION/RECALL OF THE ORDER OF THIS TRIBUNAL DATED 25.6.2012, IN ITA N O .1649/HYD/2011 FOR THE ASSESSMENT YEAR 2006 - 07, ON THE GROUND THAT CERTAIN MISTAKE APPARENT FROM RECORD HAS CREPT INTO THE SAME. 2. THE LEARNED COUNSEL FOR THE ASSESSEE, NARRATING THE FACTUAL BACKGROUND, EXPLAIN ED T HAT FOR THE FINANCIAL Y E AR ENDED ON 31.3.2006, THE PROFIT DERIVED BY THE JOINT VENTURE AMOUNTED TO R S .984.96 LAKHS AFTER CLAIMING DEPRECIATION OF RS.495.76 LA K HS. AS AGAINST THE INCOME RETURNED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, THEREUPO N OF RS.8,14,72 , 286 , THE ASSESSING OFFICER , VIDE ORDER DATED 30.12.2008, REJECTING THE BOOK R E SULTS, ESTIMATED THE GROSS INCOME AT 15% AND DIRECTED ALLOWANCE OF DEPRECIATION AND INTEREST FROM THE INCOME SO DETERMINED. ON APPEAL, THE CIT(A), VIDE ORDER DATE D 2.12.2010, DIRECTED ESTIMATION OF INCOME OF THE ASSESSEE AT 10% INSTEAD OF 15% ADOPTED BY THE ASSESSING OFFICER, AND FROM THE INCOME SO DETERMINED HE DIRECTED ALLOWANCE OF DEPRECIATION AS WELL AS INTEREST PAID TO M A NO .45/HYD/ 2014 (IN ITA NO.1769/HYD/2011) M/S. DIC NCC(JV), HYDERABAD 2 BANKS AND FINANCIAL INSTITUTIONS. ON THE CROSS APPEALS BY THE ASSESSEE AS WELL AS THE R E VENU E AGAINST THE SAID ORDER OF THE CIT(A) DATED 2.12.2010, THE TRIBUNAL, VIDE ITS ORDER DATED 25.6.2012 DIRECTED THE ESTIMATION OF PROFIT AT 10% OF THE GROSS RECEIPTS WITHOUT ALLO W IN G ANY FURTHER DEDUCTION T OWARDS DEPRECIATION AND INTEREST. IT IS THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE IN THE PRESENT APPLICATION THAT THE ISSUE REL A TING TO ALLOWABILITY OR OTHERWISE OF DEPRECIATION WAS NOT RAISED EITHER BY THE ASSESSEE OR BY THE REVENUE IN THEIR RESPECTIVE APPEALS BEFORE THE TRIBUNAL, AND IT WAS NOT THE CASE OF EITHER THE ASSESSING OFFICER OR THE CIT(A) THAT SUCH DEDUCTION TOWARDS DEPRECIATION WAS NOT ALLOWABLE. IN THE CIRCUMSTANCES, THE ORDER OF THE TRIBUNAL IN SPECIFICALLY DIRECTING ESTIMATION OF INCOME AT 10% WITHOUT ANY FURTHER DIRECTION TOWARDS DEPRECIATION IS BEYOND THE SCOPE OF ADJUDICATION ON THE CROSS - APPEALS OF THE ASSESSEE AS WELL AS THE DEPARTMENT. IT IS TH E REFORE, SUBMITTED THAT THERE WAS A MISTAKE APPARENT FROM RECORD IN TH E O R DER OF THE TRIBUNAL DATED 25.4.2012, AND AS SUCH, I T IS LIABLE TO BE RECTIFIED/RECALLED. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, STRONGLY SUPPO R TED THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD. 4. WE HEARD BOTH SIDES ON THIS APPLICATION AND PERUSED THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE AVERMENTS OF THE ASSESSEE IN THE PRESENT APPLICATION. THE ISSUE BEFORE THE TRIBUNAL IN THE CROSS - APPEALS OF THE ASSESSEE AS WELL AS THE REVENUE, UNDIS PUTEDLY, IS THE REASONABLENESS OF THE ESTIMATION OF INCOME APPROVED BY THE CIT(A) BY HIS ORDER DATED 2.10.2010. WH E THER A GROUND HAS SPECIFICALLY BEEN RAISED BY THE PARTIES ON THE ALLOWABILITY OR OTHERWISE OF DEPRECIATION, ETC., IN THE GROUNDS BEFORE IT, OR WHETHER THERE WAS ANY DI S PUTE IN THAT REGARD AT ALL DURING THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS BEFORE THE CIT(A), IT HAS TO BE ADMITTED THAT DEPRECIATION IS A RELEVANT FACTOR, HAVING A BEARING ON THE ESTIMATION OF PROFIT ADOPTING PERCENTAGE RATE. ALLOWANCE OF DEPRECIATION FROM THE INCOME ESTIMATED BY M A NO .45/HYD/ 2014 (IN ITA NO.1769/HYD/2011) M/S. DIC NCC(JV), HYDERABAD 3 ADOPTING A PARTICULAR RATE, MAY PROVE SUCH ESTIMATION, IN A PARTICULAR CASE, TO BE TOO LOW, AND NON - ALLOWANCE THEREOF FROM SUCH ESTIMATED INCOME IN A DIFFERENT CASE TO BE TOO HARSH, DEPENDING U PON THE AMOUNT OF DEPRECIATION INVOLVED. AS SUCH, IRRESPECTIVE OF THE GROUNDS RAISED BY THE PARTIES, DEPRECIATION IS A CRUCIAL FACTOR IN THE MATTER OF ESTIMATION OF INCOME, AND ITS ALLOWANCE OR OTHERWISE HAS TO BE TAKEN INTO ACCOUNT WHILE DIRECTING A RATE TO BE ADOPTED FOR ESTIMATION OF INCOME. THE TRIBUNAL IN ITS ORDER DATED 25.4.2012, CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND SPECIFICALLY THE FACT THAT THE DEPARTMENT HAD ALSO CHALLENGED THE ESTIMATION SUSTAINED BY THE CIT(A), HAS AP PROVED ESTIMATION OF THE PROFITS ADOPTING A RATE OF 10% OF THE GROSS RECEIPTS WITHOUT ALLOWING ANY FURTHER DEDUCTION TOWARDS DEPRECIATION. IN CASE OF C.ESWAR REDDY (ITA NOS.668,670, 685 & 686/HYD/2009) DATED 31.1.2011 AS WELL AS IN A NUMBER OF OTHER CASES, THIS TRIBUNAL HAS HELD THAT WHILE ESTIMATING PROFIT IN CASE OF WORKS CONTRACT BUSINESS, NO FURTHER DEDUCTIONS UNDER S.30 TO 38 CAN BE ALLOWED. IT BEING A CONSCIOUS DECISION OF THE TRIBUNAL, AND THE DIRECTION WITH REGARD TO NO SEPARATE DEPRECIATION FRO M THE INCOME ESTIMATED ADOPTING A RATE OF 10%, IS KEEPING IN MIND THE REASONABLENESS OF THE ESTIMATION SUSTAINED, IT IS NEITHER CORRECT NOR PERMISSIBL E TO ALLEGE ANY MISTAKE IN THE ORDER OF THE TRIBUNAL. IN ANY EVENT, ALL THAT THE ASSESSEE IS SEEKING BY THE PRESENT APPLICATION, IS A REVIEW OF OUR ORDER DATED 25.4.2012, WHICH IS NOT PERMISSIBLE IN THESE PROCEEDINGS UNDER S.254 OF THE ACT, THE SCOPE OF WHICH IS CONFINED TO MERE RE C TIFICATION OF OBVIOUS AND PATENT ERRORS APPARENT FROM RECORD, WHICH CREPT INTO THE ORDER OF THE TRIBUNAL. IN THIS VIEW OF THE MATTER, PRESENT APPLICATION OF THE ASSESSEE, BEING DEVOID OF MERIT, IS REJECTED. 5. IN THE RESULT, ASSESSEES MISCELLANEOUS APPLICATION IS REJECTED. ORDER PRONOUNCED IN THE COURT ON 21.5.2014 SD/ - SD/ - (CHANDRA POOJARI ) ( SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 21 ST MA Y , 2014 M A NO .45/HYD/ 2014 (IN ITA NO.1769/HYD/2011) M/S. DIC NCC(JV), HYDERABAD 4 COPY FORWARDED TO: 1. M/S. DIC NCC(JV), 41 NAGARJUNA HILLS, HYDERABAD 2 . ADDL . COMMISSIONER OF INCOME - TAX RANGE 6, HYDERABAD 3. COMM`ISSIONER OF INCOME - TAX(APPEALS) GUNTUR 4. COMMISSIONER OF INCOME - TAX III HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S