ACIT, Circle -1, Nizamabad v. Shri K. Srinivas, Nizamabad

ITA 1114/HYD/2011 | 2007-2008
Pronouncement Date: 29-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 111422514 RSA 2011
Assessee PAN AJAPK4065A
Bench Hyderabad
Appeal Number ITA 1114/HYD/2011
Duration Of Justice 3 month(s) 19 day(s)
Appellant ACIT, Circle -1, Nizamabad
Respondent Shri K. Srinivas, Nizamabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 29-09-2011
Assessment Year 2007-2008
Appeal Filed On 09-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYA RAGHAVAN JUDICIAL MEMBER ITA NO.1114/HYD/2011 ASSESSMENT YEAR 2007-08 THE ACIT CIRCLE 1 NIZAMABAD VS SHRI K. SRI NIVAS DHARMAVARAM (V) NIZAMABAD DISTRICT. (PAN AJAPK 4065 A) APPELLANT RESPONDENT APPELLANT BY : T. DIWAKAR PRASAD RESPONDENT BY : SHRI CHITANYA KUMAR DATE OF HEARING : 15.9.2011 DATE OF PRONOUNCEMENT : ORDER PER CHANDRA POOJARI A.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) VI HYDERA BAD DATED 9.3.2011 AND PERTAINS TO THE ASSESSMENT YEAR 2007- 08. 2. THE REVENUE RAISED THE FIRST GROUND IN ITS APPE AL THAT THE CIT(A) ERRED IN BOTH FACTS AND LAW AND ALLOWED RELIEF WITHOUT GIVING AN OPPORTUNITY. THIS IS IN VIOLATIO N OF PRINCIPLE OF NATURAL JUSTICE. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM CIVIL CONTRACT W ORKS. HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YE AR 2007- 08 ON 2.11.2007 ADMITTING A TOTAL INCOME OF RS.11 3 5 230/. ITA NO.1114/HYD/2011 SHRI K. SRINIVAS NIZAMABAD DISTT. 2 2 THE CASE WAS PROCESSED U/S 143(1) AND SUBSEQUENTLY WAS SELECTED FOR SCRUTINY. ACCORDINGLY NOTICE U/S 143( 2) OF THE ACT WAS ISSUED. SEVERAL OPPORTUNITIES WERE ACCORDE D TO THE ASSESSEE BY ISSUING NOTICES U/S 143(2) 142(1) AND SHOW CAUSE LETTERS. IN RESPONSE TO THE SAID NOTICES AND SHOW CAUSE LETTER THE ASSESSEE PRODUCED THE BOOKS OF TH E ACCOUNTS AND OTHER RELEVANT MATERIAL. AFTER EXAMIN ING THE SAME THE ASSESSING OFFICER FOUND THAT MOST OF THE VOUCHERS WERE SELF MADE AND SINCE THE ASSESSEES EXPLANATION WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER HE REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ESTIMATED THE INCOME AT 10% OF GROSS RECEIPTS OF RS.3 85 73 964/- AND AD DED AN AMOUNT OF RS.38 57 394/- TO THE INCOME RETURNED VID E ORDER DATED 31.12.2009. 4. ON APPEAL THE CIT(A) HELD THAT 10% ESTIMATION OF PROFIT ON MAIN CONTRACT CARRIED ON BY THE ASSESSEE AND 5% IN CASE OF SUB CONTRACTS. AGAINST THIS THE REVENU E IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF TEJA CONSTRUCT IONS VS. ACIT (36 GTR 220) (HYD.) WHEREIN IT WAS HELD THAT I NCOME ON CONTRACT RECEIVED EXECUTED BY THE ASSESSEE AT OW N AT 9% ON SUB CONTRACT AT 8% AND IN CASE OF CONTRACT GIVEN BY THE ASSESSEE TO 3 RD PARTY AT 4%. HE ALSO RELIED ON THE ORDER OF THE TRIBUNAL DATED 31.1.2011 IN THE CASE OF M/S SR EC PROJECTS (P) LTD. IN ITA NOS.974 TO 980/HYD/2009 FO R THE ASSESSMENT YEARS 2000-2001 TO 2006-07. 6. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE ITA NO.1114/HYD/2011 SHRI K. SRINIVAS NIZAMABAD DISTT. 3 3 M/S KNR CONSTRUCTIONS IN 9/HYD/2007 IN ITA NO.1141/H/2005 AND 5481/HYD/2005. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN OUR OPINION THE RE IS NO GENERAL RULE WITH REGARD TO ESTIMATION OF PROFIT ON CONTRACT RECEIPTS. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WE DIRECT THE ASSESSING OFFICER TO ES TIMATE THE INCOME AT 10% IN CASE OF MAIN CONTRACT CARRIED ON B Y THE ASSESSEE AND 8% IN CASE OF SUB CONTRACTS CARRIED BY THE ASSESSEE AND 4% IN CASE OF SUB CONTRACTS GIVEN IF A NY BY THE ASSESSEE TO 3 RD PARTY. THE ASSESSEE THEREAFTER ENTITLES FOR NO DEDUCTIONS TOWARDS DEPRECIATION AND ANY OTHER DEDUCTION ALLOWABLE UNDER THE PROVISIONS OF SECTIO N 30 TO 38 OF THE IT ACT WHICH SHALL DEEMED TO HAVE BEEN A LREADY GIVEN FULL EFFECT AND NO FURTHER DEDUCTION IS TO BE ALLOWABLE. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 29.9.2011 SD/ - (ASHA VIJAYA RAGHAVAN) SD/ - (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED THE 29 TH SEPT. 2011 COPY FORWARDED TO: 1. THE ACIT CIRCLE 1 NIZAMABAD 2. SHRI K. SRINIVAS DOOR NO.6-70 DHARMAVARAM (V) NIZAMABAD DISTRICT. 3. THE CIT(A) VI HYDERABAD 4. THE CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP/