Totem Infrastructure Limited V. The Assistant Commissioner of Income Tax, Circle-2 (3), Hyderabad

ITTA/402/2018

AI Insights

The case involves M/s. Totem Infrastructure Limited appealing against the order of the Income Tax Appellate Tribunal, Hyderabad, which confirmed the assessment of the entire turnover as income for the assessment year 2009-10. The appellant contended that only the net profit should be considered for tax purposes. However, both the Commissioner of Appeals and the ITAT found that the appellant failed to provide sufficient evidence to support this claim, leading to the rejection of the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 798047 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 29-08-2023
• Assessment Year: misc
• Other Referred Cases: S.V. Iyer & T.N.C.Rangarajan, JJI, Itainik & Co. Vs. Assistant Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K MAMATA CHOUDARY
• Assessee Lawyers: K VASANT KUMAR
• Keywords: Assessment Year 2009-10; Income Tax; Net Profit; Suppressed turnover; Turnover
• Section: 260-4

Judgement Text

"[ 3386 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE TWENTY NINTH DAY OF AUGUST TWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE LAXMI NARAYANAALISHETTY INCOME TAX TRIBUNAL APPEAL No: 402 of2018 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act,1961 agalnst the order of the lncome Tax Appellate Tribunal, Hyderabad. Bench ' B', Hyderabad in ITA No.650/Hydl2O13, for assessment Year 2009-10 dated 0Z-03- 2014, preferred against the Order of the Commissioner of lncome Tax (Appeals)-lll, Hyderabad, ITA No.0389/ACIT 2(3yClT (A)-llll2o11-12, dated 08-01-2013, preferred against the Order of the Assistant Commissioner of lncome Tax, Circle-2(3), Hyderabad, PAN/G lR No.AABCK7020Q, dated : 28-1 2-201 1 . Between: M/s. Totem lnfrastructure Limited, 86, Lumbini Springs, Gachibowli, Hyderabad - 500 032. AABCK7020Q ...Appellant AND The Assistant Commissioner of lncome Tax, Circle.2 (3), Hyderabad. ...Respondent CoUnsel for the Appellant: SRI K. VASANT KUMAR Counsel for the Respondent: Ms. K. MAMATA CHOUDARY The Court delivered the following: JUDGMENT THT)IION'BLE SRI JUSTICE P.SAN{ KOSIIY AND THE HON,BLE SRI JUSTICE LAXMI NARA ,A A /.LISHETTY I.T.'T A.No. 402 ol'2018 JUDGMENT (trer Hon'ble Sri Justice P.SAM KOSfly) Heard Mr.K\"Vasant Kumar, leamed counsel for th,: itpp,:llant and Ms.K.Mamata learned counsel appearing for the responttent. Perused the material on record. 2. This appea under Section 260,{ of the Incomt: Tax Ar:t, 1961, has been preferred by the appellant against the order dated 07.03.2014 passed by the Income I'ax Appellate Tribunal, Hyderabad llench 'B', Hyderabad, in I.'I.A.No.650lHydl20l3 for the Assessmenl Year 2009- 201 0. 3. The primary contention of the appellant while assailin q the orcler of the Tribunal is that the department ought not ha're tak:n thr: entire tumover for the assessment oftax but should have taken the net frofit to be considered at 8%, for the purpose ofassessment of tzrx. 4. Upon going :hrough the order of the Tribunal we lind that the Appellate Tribunal has dealt and deliberated upon th,: said is,sue in its order in paragraph Ir o.7, the same is extracted below: 2 We have considered the submissions of the parties and perused the material on record. In this case, there is a difference between the turnover shown in the books of accounts and turnover reflected in Form No.26AS generated from AST system of ITD application. The reconciliation fumished by the assessee is not supported by any cogent material, like copy ofaccount with the concerned custorner/party. In our opinion, the entire tumover difference of Rs.14,77,77,984/- is to be considered as suppressed tumover. Regarding consideration of the entire turnover as income, the plea of the assessee is that only net profit is to be considered, at Yo. In this case, the assessee failed to establish that the corresponding expenditure relating to this turnover has not at all been booked in its books of accounts. The assessee's plea can be accepted only if the corresponding expenditure relating to this turnover is not at all booked by the assessee in its books of account. Since the assessee failed to substantiate that the expenditure relating to this tumover has not at all been claimed in its regular books of accounts, we are not inclined to allow the same. Being so, it is to be held that the corresponding expenditure relating to this suppressed tumover has already been booked by the assessee, the entire undisclosed tumover is to be considered as income of the assessee. Accordingly, we do not find any infirmity in the orders of the lower authorities. In this view of the matter, we confirm the order of the CIT (A) and reject the grounds raised by the assessee. Further, we find that the said issue has also been dealt with Commissioner of Appeals in its order dated 08.01.2013 in paragraph No.7.l, wherein again the view of the Commissioner of Appeals was that the appellant has failed even during the appeal proceedings in providing 3 the evidence to reconcile the differences, so far as, the arlditional turn over that was delected later. '/.1 I have looked at the facts and the evidenct: on record. 'lhe assessing officer had exarnined the i:;srre in detait and reconciled the individ -ral ]-DS ceftificat,)s of various contracts with the gro;s Receipts of those contracts. lt has been cleirrly fourrd that evex after reconciliation of individual accounts there is a difference of Rs.14,77,77,984/-. Elen durir:g appeal prcceedings the appellant did not pr,rvide any evidence lo reconcile this difference. Theref,rre. given the facts and circumstances I have no opticn bu: lo confirm the addition. This issue is also d:cided in favour of revenue. 5. Given the lacts of the case, we are of the firnr view that the issue raised by the app,:llant would not be a substantial qrestion ,rf Irw to be considered, rather is a question of fact which has be,:n dealt, deliberated and discussed by Jommissioner of Appeals which h,rs been affinned by the ITTA while dialing with the said issue. Thus, the appeal is devoid of merits and deserves 1o be rejected. 6. So far as th,: judgments referred to by the learned counse for the appellant, in S.V.l Iaruthi & T.N.C.Rangarajan, JJI and ltainik & Co. Vs. Assistant Cornmissioner of Income Tax2. A plain perusaI of the '(rgss) z:z rrR 776 (AP) '1zoot) zsr rrR 5G1(AP) 4 facts in which the said decisions have been rendered would clearly reflect that those are entirely different factual background and cannot be made applicable to the facts of the present case, more parlicularly, when the two forums i.e., the CIT Appeals as also by the ITAT been specifically dealt with the issue and would not be applicable as it distinguished from the facls ofthe present case. 7. Accordingly, the appeal stands rejected. 8. As a sequel, miscellaneous applications pending if any in this writ petition, shall stand closed. //TRUE COPY// Sd/. B.S.CHIRANJEEVI JOINT-REGISTRAR (i To, kam PR {Pq SECTION OFFICER 1. The lncome Tax Appellate Tribunal, Hyderabad Bench ' B', Hyderabad. 2. The Commissioner of lncome Tax (Appeals)-lll, Hyderabad. 3. The Assistant Commissioner of lncome Tax, Circle-2 (3), Hyderabad 4. One CC to SRI K. VASANT KUMAR, Advocate [OPUC] 5. One CC to Ms. K. MAMATA CHOUDARY, Advocate [OPUC] 6. Two CD Copies HlGH COUR PSK,J & LNA,J DATED:2910;J12023 JUDGMENT THE APPEAL STANDS REJECTED trl,.c , 1l:1. ot $) * o l! F tlJ { F d o ITTA.No.402 ot 2018 5- , (/ a t .?. JHc 6 to ,g' := "