ACIT, Warangal v. M/s K Sudarshan Reddy & K Venkateshwarlu & Co., Hanamkonda

ITA 1105/HYD/2009 | 2006-2007
Pronouncement Date: 13-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 110522514 RSA 2009
Bench Hyderabad
Appeal Number ITA 1105/HYD/2009
Duration Of Justice 1 year(s) 2 month(s) 3 day(s)
Appellant ACIT, Warangal
Respondent M/s K Sudarshan Reddy & K Venkateshwarlu & Co., Hanamkonda
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 13-01-2011
Date Of Final Hearing 22-12-2010
Next Hearing Date 22-12-2010
Assessment Year 2006-2007
Appeal Filed On 09-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMB ER ITA NO.1105/HYD/07 : ASST. YEAR: 2006-07 ASSTT. COMMISSIONER OF INCOME- TAX CIR-I WARANGAL. VS M/S. K. SUDHARSHAN REDDY & K. VENKATESHWARLU & CO. WARANGAL. (PAN:AAHFK 1557 D) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. VASUNDHRA SINHA RESPONDENT BY : SHRI K.V. CHALAMAIAH O R D E R PER AKBER BASHA ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE CIT (A)-VI HYDERABAD DATED 24-8-2009 AND IT PE RTAINS TO THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS BEFORE US: 1. THE CIT (A) HAS ERRED IN DELETING THE ADDITIONS M ADE U/S 40(A)(IA) IN THE ASSESSMENT ORDER AND DETERMINING THE INCOME ON ESTIMATE BASIS. 2. THE CIT (A) HAS ERRED IN DELETING THE ADDITIONS MADE TOWARDS UN-VOUCHED EXPENDITURE. 3. THE CIT (A) HAS ERRED IN HOLDING THE PROVISIONS UNDER SECTION 194C OF THE ACT AS NOT APPLICABLE TO ASSESSEES CASE CONTRAR Y ITA NO. 1105/HYD/2 009 K. SUDHARSHAN REDD Y HYD. 2 TO THE EVIDENCES THAT CAN BE FOUND IN THE ACCOUNTS OF THE ASSESSEE AS WELL AS THE MODE OF OPERATION OF ITS STATE OF AFFAIRS. 4. ANY OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 3. IN ADDITION TO THE ABOVE THE REVENUE HAS ALSO TA KEN AN ADDITIONAL GROUND WHICH READS AS UNDER:- WITHOUT PREJUDICE TO THE GROUND NUMBERS 1 TO 3 THE CIT(A) HAS ERRED IN ESTIMATING THE NET INCOME AT 8% OF THE GROSS R ECEIPTS FROM OWN CONTRACTS AND NOT 12.5% AS HELD BY THE JURISDI CTIONAL ITAT IN ITA NO.9/HYD/2007 DATED 30-11-2009 IN THE CASE OF M/S. KNR CONSTRUCTIONS LTD. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON SIMILAR AND IDENTICAL ISSUE IN THE CASE OF N. RAMACHANDRA REDDY MAHABUBABAD IN IT A NO.1372/HYD/2007 DATED 6 TH MARCH 2009 WE HAVE HELD THAT BY FOLLOWING THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS VS. CIT REPORTED IN 232 ITR 776 WHEN TH E BOOKS OF ACCOUNTS HAVE BEEN REJECTED AND INCOME WAS DETERMINED BY RESORTING TO ESTIMATION AS A PERCENTAGE OF TURNOVER/GROSS RECEIPTS THERE IS NO SCOPE FOR FURTHER DISALLOWANCE IN TERMS OF SECTION 40(A)(I A) OF THE ACT. IN VIEW OF THE ABOVE WE DO NOT SEE ANY INFIRMITY IN TH E ORDER OF THE CIT (A) ON THIS ISSUE AND ACCORDINGLY THE SAME IS UPHELD. HOW EVER WE SEE MERIT IN THE ARGUMENTS OF THE LEARNED DEPARTMENTAL R EPRESENTATIVE THAT THE CIT (A) SHOULD HAVE FOLLOWED THE DECISION OF ITAT HYDERABAD IN THE CASE OF M/S. KNR CONSTRUCTIONS LTD. (SUPRA) AND SHOULD HA VE ESTIMATED THE NET INCOME AT 12.5% OF THE GROSS RECEIPTS INSTEAD OF 8% OF THE ITA NO. 1105/HYD/2 009 K. SUDHARSHAN REDD Y HYD. 3 GROSS RECEIPTS. ACCORDINGLY ALLOW THE ADDITIONAL GRO UND RAISED BY THE REVENUE AND DIRECT THE ASSESSING OFFICER TO ESTIMATE THE N ET INCOME OF THE ASSESSEE AT 12.5% OF THE GROSS RECEIPTS. 4. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S ALLOWED IN PART. ORDER PRONOUNCED IN THE COURT ON 13 -01-2011. SD/- SD/- (G.C. GUPTA)) (AKBER BASHA) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/- 13-01-2011. COPY FORWARDED TO: 1. ACIT CIRCLE-1 WARANGAL. 2. 3. 4.. 5. JMR* M/S. K. SUDARSHAN REDDY & K. VENKATATESHWARLU & CO. NAIM NAGAR HARAMKONDA. CIT (A)-VI HYDERABAD. CIT AP. HYDERABAD. THE DR ITAT HYDERABAD.