GSP Infratech Development Limited, Secunderabad v. ACIT, Central Circle-5, Hyderabad

ITA 1399/HYD/2011 | 2006-2007
Pronouncement Date: 27-12-2011

Appeal Details

RSA Number 139922514 RSA 2011
Assessee PAN AABCG5845P
Bench Hyderabad
Appeal Number ITA 1399/HYD/2011
Duration Of Justice 4 month(s) 29 day(s)
Appellant GSP Infratech Development Limited, Secunderabad
Respondent ACIT, Central Circle-5, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 27-12-2011
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 27-12-2011
Assessment Year 2006-2007
Appeal Filed On 29-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBE R. ITA NO.1396/ HYD/2011 ASSESSMENT YEAR 2003-04 ITA NO.1397/ HYD/2011 ASSESSMENT YEAR 2004-05 ITA NO.1398/ HYD/2011 ASSESSMENT YEAR 2005-06 ITA NO.1399/ HYD/2011 ASSESSMENT YEAR 2006-07 ITA NO.1400/ HYD/2011 ASSESSMENT YEAR 2007-08 ITA NO.1402/ HYD/2011 ASSESSMENT YEAR 2009-10 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD (PAN - AABCG 5845 P ) V/S ASSTT. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 5 HYDERABAD (ASSESSEE) (RESPONDENT) ITA NO.1357/ HYD/2011 ASSESSMENT YEAR 2006-07 ITA NO.1358/ HYD/2011 ASSESSMENT YEAR 2007-08 ASSTT. COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE 5 HYDERABAD V/S M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD (PAN - AABCG 5845 P ) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI SADASIVA & SHRI M.V.ANIL KUMAR DEPARTMENT BY : SMT. K.MYTHILI RANI DATE OF HEARING 1 6 1 2 .2011 DATE OF PRONOUNCEMENT 27.12.2011 O R D E R PER ASHA VIJAYARAGHAVAN JUDICIAL MEMBER THERE ARE NINE APPEALS IN ALL IN THIS BUNCH. SEV EN OF THEM ARE BY THE ASSESSEE AND TWO OF THEM ARE BY THE REVE NUE. THEY ARE DIRECTED AGAINST SEPARATE ORDERS OF THE CIT(A) VII HYDERABAD DATED 10.5.2011 FOR THE ASSESSMENT YEAR 2003-04 AND DATED 10.5.2011 FOR ALL OTHER ASSESSMENT YEARS. SINCE CERTAIN COMMON I SSUES ARE INVOLVED ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 2 THESE APPEALS ARE BEING DISPOSED OF WITH THIS COMM ON CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FACTS OF THE CASE IN BRIEF ARE THAT ASSESSEE I S IN THE BUSINESS AS A SUBCONTRACTOR IN THE LINE OF CIVIL WO RKS CANAL EXCAVATION AND MINE AND IRON ORE ACTIVITIES. THERE WAS A SEAR CH IN THE CASE OF SRI. VENKATA KUTUMBA RAO AND OTHERS ON 28.7.2008. SEARCH OPERATIONS WERE CONDUCTED AT THE BUSINESS PREMISES OF THE ASSE SSEE. NOTICE U/S 53A WAS ISSUED AND PURSUANT THERETO ASSESSEE FILED RETURNS FOR THE YEARS UNDER APPEAL. AGGRIEVED BY THE LEGALITY AND V ALIDITY OF THE PROCEEDINGS TAKEN UP UNDER S.153A OF THE ACT AND A LSO BY THE ADDITIONS/DISALLOWANCES MADE BY THE ASSESSING OFFIC ER AND CONFIRMED BY THE CIT(A) ASSESSEE PREFERRED THE PRESENT APPEA LS WHEREAS AGGRIEVED BY THE RELIEFS GRANTED BY THE CIT(A) REV ENUE PREFERRED APPEALS FOR THE ASSESSMENT YEARS 2006-07 AND 2007-0 8. ASSESSEES APPEAL : ITA NO. 1396/H/2011 ASST. YEAR: 2003-04 3. THE ASSESSEES APPEAL IS AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE ASSESSMENT MADE U/S 153A AND DISALL OWANCE OF 7% OF LABOUR AND SITE EXPENSES. 4. AT THE TIME OF HEARING THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE I S NOT PRESSING THE GROUNDS REGARDING LEGALITY AND VALIDITY OF ASSESSME NT U/S 153A. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE AGAI NST LEGALITY OF ASSESSMENT U/S 153A ARE REJECTED AS NOT PRESSED. 5. WITH REGARD TO THE MERITS OF CASE FACTS OF T HE CASE IN BRIEF ARE THAT THE ASSESSING OFFICER DISALLOWED 10% OF TH E LABOUR EXPENSES CLAIMED BY THE ASSESSEE ON THE GROUND THAT MOST OF THE VOUCHERS ARE SELF-MADE PAYMENTS HAVE BEEN MADE IN CASH AND THE IDENTITY OF THE ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 3 PAYEES ARE NOT FULL TO MAKE ANY VERIFICATION. THE ASSESSING OFFICER ALSO HAS MADE DISALLOWANCES ON THE GROUND THAT THE ASSESSEE HAD NOT MADE ANY MENTION ABOUT QUANTUM OF THE WORK DONE WIT H REGARD TO PAYMENTS MADE. THEREFORE IN VIEW OF THE FACT THAT THE ASSESSEE HAD CLAIMED HUGE LABOUR EXPENSES AND THE DETAILS FURNIS HED ARE IN THE NATURE OF SELF-MADE VOUCHERS WITHOUT FULL ADDRESSES OF PAYEES HE HAS DISALLOWED 10% OF LABOUR EXPENSES WHICH WORKED OUT TO RS. 9 32 060/- 6. DURING THE APPEAL PROCEEDINGS IT WAS SUBMITTE D BY THE ASSESSEE THAT THE ASSESSEE BEING A CONTRACTOR HAS TO DEAL WITH LABOURERS AND THEREFORE THE ASSESSEE HAD USED SE LF-MADE VOUCHERS WITH REGARD TO THE PAYMENTS MADE TO THEM. THEREFORE THE DISCREPANCIES WITH REGARD TO PAYEES ADDRESSES ARE BOUND TO HAPPEN. HENCE IT WAS PLEADED THAT THE DISALLOWANCE OF 10% OF LABOUR EXPENSES MADE BY THE ASSESSING OFFICER IS ON HIGHER SIDE AND THE SAME MAY BE REDUCED. 7. THE CIT(A) OBSERVED THAT DURING THE APPEAL PR OCEEDING ALSO THE RELEVANT BOOKS OF ACCOUNTS BILLS AND VOUC HERS WERE NOT PRODUCED BEFORE HIM. FURTHER THE CIT(A) POINTED O UT THAT THE ASSESSING OFFICER HAS DISALLOWED THE 10% OF LABOUR EXPENSES SINCE THE ASSESSEE DID NOT PRODUCE THE VALID BILLS AND VOUCHE RS IN SUPPORT OF LABOUR EXPENSES CLAIMED AND EVEN DURING APPEAL PROC EEDINGS THE ASSESSEE DID NOT FURNISH ANY DETAILS. THE CIT(A) THEREFORE HELD THAT EXPENSES DISALLOWED BY THE ASSESSING OFFICER ARE JU STIFIED TO SOME EXTENT BECAUSE THE ASSESSEE DID NOT FURNISH NECESS ARY DETAILS IN SUPPORT OF THE LABOUR EXPENSES CLAIMED. THEREFORE CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS OF THE OPINION THAT THE DISALLOWANCE OF EXPENSES IN ASSESSEES CASE IS VAL ID TO SOME EXTENT. HOWEVER HE FELT THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 4 WAS ON HIGH SIDE AND HENCE CIT(A) CONFIRMED THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER TO THE EXTENT OF 7% INSTEA D OF 10% DISALLOWED BY THE ASSESSING OFFICER THEREBY PARTLY ALLOWING THE APPEAL OF THE ASSESSEE. 8. AGGRIEVED THE ASSESSEE IS ON APPEAL. 9. WE HAVE HEARD THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THE ASSESSEE IS A SUBCONTRACTOR. ASSESSEE IS ENGAGING LABOUR AT SITE AT FAR FLUNG PLACES. IN SUCH CIRCUMSTANCE S IT IS DIFFICULT TO HAVE DOCUMENTS FOR SUCH EXPENDITURE TO THE SATISFACTION OF THE ASSESSING OFFICER. IT IS ALSO DIFFICULT TO VERIFY THE IDENTIT Y OF THE LABOUR AFTER LAPSE OF MANY YEARS. THE ACCOUNTS OF THE ASSESSEE HAVE B EEN AUDITED AND AUDITORS CERTIFICATE U/S 44AB HAS ALSO BEEN FURNIS HED. THE ASSESSING OFFICER HAS NOT ANALYSED THE EXPENSES COMPARED TO T HE TURNOVER FOR THE EARLIER YEARS. A SEARCH HAS BEEN MADE IN THE PR EMISES OF THE ASSESSEE AND NO INCRIMINATING EVIDENCE IN THIS REGA RD HAS BEEN FOUND. ONLY AN AD HOC DISALLOWANCE OF EXPENDITURE CLAIMED BY THE ASSESSEE HAS BEEN MADE. HOWEVER FROM THE OBSERVATIONS OF TH E LOWER AUTHORITIES IT CAN BE INFERRED THAT FULL DETAILS OF EXPENDITURE HAVE NOT BEEN PROPERLY DOCUMENTED. HENCE THE POSSIBILITY OF SOME INFLATION OF SUCH EXPENSES CANNOT BE RULED OUT. CONSIDERING TOTA LITY OF FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION TH AT DISALLOWANCE OF 5% OF LABOUR AND SITE EXPENSES IS REASONABLE. 10. IN THE RESULT THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ASSESSEES APPEAL : ITA NO. 1397/H/2011 ASST. YEAR: 2004-05 11. THIS APPEAL OF THE ASSESSEE IS ALSO DIRECTED A GAINST THE ORDER OF THE CIT(A) CONFIRMING THE ASSESSMENT MADE U/S 153A AND ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 5 SUSTENANCE OF DISALLOWANCE TO THE EXTENT OF 7% OF L ABOUR AND SITE EXPENSES AND DISALLOWANCE OF RS. 1 00 000/- OUT OF TRAVEL EXPENSES.. 12. AT THE TIME OF HEARING THE AR OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE GROUNDS REGARDING LEGAL ITY AND VALIDITY OF ASSESSMENT U/S 153A. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE AGAINST LEGALITY OF ASSESSMENT U/S 153A ARE REJECTE D AS NOT PRESSED. 13. WITH REGARD TO THE MERITS OF CASE IN SO FAR AS IT PERTAINS TO DISALLOWANCE OF 7% OF LABOUR AND SITE EXPENSES ARE CONCERNED FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THOSE FOR THE ASSESSMENT YEAR 2003-04 IN ITA NO 1396/H/11 DISCUSSED ABOVE. WHILE THE ASSESSING OFFICER DISALLOWED 10% OF THE LABOUR EXPE NSES WHICH CAME TO RS.27 04 530 ON THE GROUND THAT MOST OF THE VOUC HERS ARE SELF- MADE PAYMENTS HAVE MADE IN CASH AND THE IDENTITY O F THE PAYEES IS NOT COMPLETE SO AS TO ENABLE VERIFICATION ON APPE AL THE CIT(A) REDUCED THE DISALLOWANCE MADE BY THE ASSESSING OFFI CER TO 7% OF THE EXPENSES. 14. FACTS AND CIRCUMSTANCES OF THE CASE BEING IDE NTICAL EXCEPT FOR THE AMOUNT OF PAYMENTS INVOLVED FOR THE DETAIL ED REASONS DISCUSSED IN THE CONTEXT OF APPEAL FOR ASSESSMENT Y EAR 2003-04 (ITA NO.1396/HYD/2011) IN PARA-9 HEREINABOVE WE RESTRIC T THE DISALLOWANCE TO 5% OF LABOUR AND SITE EXPENSES. 15. THE NEXT GRIEVANCE OF THE ASSESSEE IN THIS A PPEAL IS WITH REGARD TO DISALLOWANCE OF RS 1 00 000 OUT OF TRAVE LLING EXPENSES CLAIMED. THE ASSESSING OFFICER OBSERVED THAT FOR TH E PREVIOUS ASSESSMENT YEAR 2003-04 THE ASSESSEES CLAIM TOWARD S TRAVELLING EXPENSES WAS ONLY RS 27 000 WHEREAS FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION THE ASSESSEE HAS CLAIMED TRAVEL EXPE NSES AT RS ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 6 2 84 150. ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE DID NOT FURNISH NECESSARY EVIDENCES IN SUPPORT OF THE TRAVE L EXPENSES CLAIMED. HENCE THE ASSESSING OFFICER HAS MADE A DISALLOWANCE OF RS. 1 00 000 OUT OF THE TOTAL EXPENSES CLAIMED. 16. ON APPEAL BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAD NOT POINTED OUT ANY SPECIFIC DEFECTS WITH REGARD TO TRAVEL EXPENSES INCURRED THEREFORE THE ASSESSING OFFICER SHOULD NOT HAVE MADE THE IMPUGNED DISALLOWANCE OUT OF TRAVELLI NG EXPENSES. THE CIT(A) HELD THAT THE ASSESSING OFFICER HAS DISALLOW ED THE EXPENSES ON THE GROUND THAT THE ASSESSEE DID NOT FURNISH NECESS ARY EVIDENCES IN SUPPORT OF THE TRAVEL EXPENSES CLAIMED. FURTHER DU RING THE APPEAL PROCEEDINGS ALSO THE ASSESSEE HAD NOT EXPLAINED ITS CASE BY PRODUCING THE BOOKS OF ACCOUNTS AND OTHER DETAILS. THEREFORE IN ABSENCE OF NECESSARY EVIDENCE TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE THE CIT(A) CONFIRMED THE DISALLOWANCE OF RS. 1 00 000 M ADE BY THE ASSESSING OFFICER OUT OF TRAVELLING EXPENSES. 17 AGGRIEVED THE ASSESSEE IS ON APPEAL. 18. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. WE FIND THAT THE ACCOUNTS OF THE ASSESSEE HAVE BEEN AUDITED AND CERTIFICATE U/S 44AB HAS BEEN FURNISHED. BOTH T HE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE NOT SPECIFICALLY MENTION ED AS TO WHAT PARTICULARS HAVE NOT BEEN FURNISHED BY THE ASSESSEE AND WHETHER THE PARTICULARS WHICH WERE NOT GIVEN ABOUT PERSONS WHO TRAVELLED OR PLACES TO WHICH THEY HAD TRAVELLED OR THE NECESSARY SUPPORTING VOUCHERS FOR THE SAME. IN CASE OF MOST OF THE TRAVE LLING EXPENSES LIKE FOOD TRAVEL BY BUS OR TRAIN LOCAL CONVEYANCE ETC. IT MAY NOT BE POSSIBLE TO BE SUPPORTED BY THIRD PARTY VOUCHERS. H ENCE CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE FEEL A ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 7 DISALLOWANCE OF RS. 50 000/- WOULD MEET THE ENDS OF JUSTICE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE OUT OF TRAVEL EXPENSES TO RS. 50 000 AND THUS PARTLY ALLOW THE GROUNDS OF THE ASSESSEE ON THIS ISSUE. 19. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO.1397/H/11 FOR AY 2004-05 IS PARTLY ALLOWED. ASSESSEES APPEAL : ITA NO. 1398/H/2011 : ASST. YEAR: 2005-06 20. THIS APPEAL OF THE ASSESSEE IS ALSO DIRECTED A GAINST THE ORDER OF THE CIT(A) CONFIRMING THE ASSESSMENT MADE U/S 153A AND DETERMINATION OF INCOME OF THE ASSESSEE FOR THE YEA R UNDER APPEAL AT RS. 29 07 250/- AS AGAINST RS. 27 02 250/- RETURNED BY THE ASSESSEE. 21. AT THE TIME OF HEARING THE LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE GROU NDS REGARDING LEGALITY AND VALIDITY OF ASSESSMENT U/S 153A. ACCOR DINGLY THE GROUNDS RAISED BY THE ASSESSEE AGAINST LEGALITY OF ASSESSME NT U/S 153A ARE REJECTED AS NOT PRESSED. 22. THE NEXT GRIEVANCE OF THE ASSESSEE IN THIS AP PEAL IS WITH REGARD TO INCOME ADOPTED BY THE ASSESSING OFFICER A T RS 29 07 250 WHICH WAS DETERMINED AS PER THE ORDER UNDER SEC. 14 3(3) DATED 28.12.2007. THE THEN ASSESSING OFFICER HAD ADOPTED THE TOTAL INCOME OF THE ASSESSEE AT RS 29 07 250 SINCE HE FOUND THA T CERTAIN EXPENSES WERE NOT SUPPORTED BY ANY RECEIPTS VOUCHERS OR BI LLS. THEREFORE THE ASSESSING OFFICER ADOPTED THE TOTAL INCOME OF THE A SSESSEE AT RS. 29 07 250/- AGAINST THE INCOME RETURNED AT RS 27 02 250/- ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 8 23. ON APPEAL THE CIT(A) HAS FOUND THAT THE ASSES SEE HAS NOT FURNISHED ANY DETAILS WITH REGARD TO EXPENSES CLAIM ED BY IT. THE ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNTS. TH E ASSESSING OFFICER HAD ADOPTED THE ASSESSED INCOME WHILE FRAM ING ASSESSMENT UNDER SEC 143(3) OF THE I.T. ACT 1961 SINCE THE AS SESSEE HAD NOT PROVED THE FACT THAT THE EXPENSES CLAIMED BY THE AS SESSEE ARE GENUINE. EVEN DURING THE APPEAL PROCEEDINGS ALSO T HE ASSESSEE HAD NOT TRIED TO EXPLAIN ITS CASE WITH NECESSARY EVIDEN CES. HENCE THE CIT(A) HAD CONFIRMED THE ORDER OF THE ASSESSING OFF ICER DETERMINING THE INCOME AT RS. 29 07 250. 24. AGGRIEVED THE ASSESSEE IS ON APPEAL. 25. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD FILED A RETUR N OF INCOME PURSUANT TO A NOTICE U/S 153A DECLARING ITS INCOME AT RS. 27 02 250/-. IT IS ALSO MENTIONED IN THE ASSESSMENT ORDER THAT T HE ASSESSEE HAS ALSO FURNISHED ALL THE PARTICULARS REQUIRED BY THE ASSESSING OFFICER. AS ALREADY AN ASSESSMENT U/S 143(3) HAS BEEN MADE IN T HE CASE OF THE ASSESSEE FOR THE VERY SAME ASSESSMENT YEAR 2005-06 THE ASSESSING OFFICER IN THE PROCEEDINGS UNDER S.153A OF THE ACT MERELY ADOPTED THE INCOME OF RS. 29 07 250DETERMINED IN THE ORDER OF ASSESSMENT PASSED U/S 143(3) ON 28.12.2007. AS PER THE SECOND PROVISO TO SEC 153A IF AN ASSESSMENT OR REASSESSMENT ARE PENDING ON THE DATE OF INITIATION OF SEARCH THEY WILL ABATE. IN THE PRES ENT CASE THE SEARCH WAS CONDUCTED ON 28.7.2008 WHILE THE ASSESSMENT OR DER WAS PASSED ON 28.12.2007. THEREFORE THE ASSESSMENT ORDER PASS ED U/S 143(3) IS STILL VALID. IN THE CIRCUMSTANCES THE ASSESSING OFF ICER RIGHTLY ADOPTED THE INCOME ASSESSED IN THE ORDER OF ASSESSMENT DATE D 28.12.2007. THE ASSESSEES APPEAL FAILS ON THIS GROUND. WE ACC ORDINGLY UPHOLD THE ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 9 ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE AND R EJECT THE GROUNDS OF THE ASSESSEE IN THIS APPEAL. 26. IN THE RESULT THE ASSESSEES APPEAL IN ITA NO 1398/H/11 FOR ASSESSMENT YEAR 2005-06 IS DISMISSED. ASSESSEES APPEAL : ITA NO. 1399/H/2011 : ASST. YEAR: 2006-07 27. THIS APPEAL OF THE ASSESSEE IS ALSO DIRECTED A GAINST THE ORDER OF THE CIT(A) CONFIRMING THE ASSESSMENT MADE U/S 153A AND CONFIRMATION OF DISALLOWANCE OF 7% OF LABOUR AND SI TE EXPENSES AND DISALLOWANCE OF 10% OUT OF MISCELLANEOUS EXPENDITUR E OF RS. 24 62 702/-. 28. AT THE TIME OF HEARING THE LEARNED COUNSEL F OR THE ASSESSEE SHRI SADASIVA SUBMITTED THAT HE IS NOT P RESSING THE GROUNDS REGARDING LEGALITY AND VALIDITY OF ASSESSMENT U/S 1 53A. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE AGAINST LEGALITY OF ASSESSMENT U/S 153A ARE REJECTED AS NOT PRESSED. 29. WITH REGARD TO THE MERITS OF CASE IN SO FAR AS IT PERTAINS TO DISALLOWANCE OF 7% OF LABOUR AND SITE EXPENSES ARE CONCERNED FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THOSE FOR THE ASSESSMENT YEAR 2003-04 IN ITA NO 1396/H/11 DISCUSSED ABOVE. WHILE THE ASSESSING OFFICER DISALLOWED 10% OF THE LABOUR EXPE NSES ON THE GROUND THAT MOST OF THE VOUCHERS ARE SELF-MADE PAYMENTS H AVE BEEN MADE IN CASH AND THE IDENTITY OF THE PAYEES ARE NOT FURNISH ED TO ENABLE ANY VERIFICATION ON APPEAL THE CIT(A) REDUCED THE DI SALLOWANCE MADE BY THE ASSESSING OFFICER TO 7% OF THE EXPENSES. ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 10 30. FACTS AND CIRCUMSTANCES OF THE CASE BEING IDE NTICAL EXCEPT FOR THE AMOUNT OF PAYMENTS INVOLVED FOR THE DETAIL ED REASONS DISCUSSED IN THE CONTEXT OF APPEAL FOR ASSESSMENT Y EAR 2003-04 (ITA NO.1396/HYD/2011) IN PARA-9 HEREINABOVE WE ARE OF THE OPINION THAT DISALLOWANCE OF 5% OF LABOUR AN SITE EXPENSES ARE R EASONABLE. 31. THE NEXT GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS IN RESPECT OF DISALLOWANCE MADE BY THE ASSESSING OFFIC ER OF 10% OF THE MISCELLANEOUS EXPENDITURE OF RS 24 62 702/-. THE S AID DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THE SAME IS NOT VERIFIABLE SINCE NECESSARY DETAILS ARE NOT FURNISHE D BY THE ASSESSEE. IT IS THE SUBMISSION OF THE AUTHORISED REPRESENTATIVE FOR THE ASSESSEE BEFORE THE CIT(A) THAT THE ASSESSING OFFICER DID N OT FIND ANY DEFECTS IN THE BOOKS OF ACCOUNTS AND THEREFORE THE GENUINE EX PENSES CLAIMED BY THE ASSESSEE SHOULD NOT HAVE BEEN DISALLOWED. THE C IT(A) CONFIRMED THE DISALLOWANCE ON THE GROUND THAT NO BOOKS OF ACC OUNTS OR VOUCHERS OR BILLS WERE PRODUCED FOR HIS PERUSAL. THUS THE CIT(A) HELD THAT THE ASSESSING OFFICER IS JUSTIFIED IN DISALLOWING 10% O F THE MISCELLANEOUS EXPENSES AND DISMISSED THE ASSESSEES APPEAL ON THI S ISSUE. 32. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE U S. 33. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ACCOUNTS OF TH E ASSESSEE HAVE BEEN AUDITED AND CERTIFICATE OF THE AUDITOR U/S 44A B HAS ALSO BEEN FURNISHED. IN THE CIRCUMSTANCES IT IS NOT CLEAR A S TO WHAT WAS REQUIRED BY ASSESSING OFFICER/CIT(A) TO BE FURNISHED BY THE ASSESSEE WHICH THE LATTER DID NOT COMPLY. NO FURTHER LIGHT HAS BEEN TH ROWN BY EITHER SIDE IN THE COURSE OF THE APPEAL PROCEEDINGS. THERE HAS BEEN NO SUCH DISALLOWANCE OUT OF MISCELLANEOUS EXPENDITURE IN O THER YEARS UNDER APPEAL BEFORE US. THIS IS AN ASSESSMENT MADE PURSUA NT TO SEARCH. ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 11 THERE IS NO DIFFERENTIATING FACTS FOR THIS YEAR COM PARED TO OTHER YEARS SO AS TO JUSTIFY DISALLOWANCE OUT OF MISCELLANEOUS EXPENSES CLAIMED ONLY IN THE ASSESSMENT YEAR UNDER CONSIDERATION. TH ERE CANNOT BE ANY AD-HOC DISALLOWANCE OF EXPENSES IN ONE YEAR WITHOUT A SPECIFIC FINDING ABOUT CLAIM OF EXPENDITURE WHEN SIMILAR EXPENSES H AVE BEEN ACCEPTED IN OTHER YEARS IN ASSESSMENTS FRAMED ALMOST SIMULTA NEOUSLY AND UNDER SIMILAR CIRCUMSTANCES. IN THE CIRCUMSTANCES WE SEE NO REASON TO SUSTAIN THE DISALLOWANCE OF 5% OF MISCELLANEOUS EXP ENDITURE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A). WE ALLOW THE APPEAL OF THE ASSESSEE ON THIS ISSUE AND DELETE THE DISALL OWANCE OF RS. 2 46 270. 34. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO 1399/H/11 FOR THE AY 2006-07 IS PARTLY ALLOWED. REVENUES APPEAL : ITA NO. 1357/H/2011 : ASST. YEAR: 2006-07 35. FOR THE ASSESSMENT YEAR 2006-07 REVENUE IS ALSO IN APPEAL AGAINST THE ORDER OF THE CIT(A) RESTRICTING THE DISALLOWANCE OF WORKMEN AND STAFF WELFARE EXPENSES TO 7% AS AGAINST 10% MADE BY THE ASSESSING OFFICER. WHILE DEALING WITH THE ASSE SSEES APPEAL IN ITA NO 1399/H/11 FOR THE ASSESSMENT YEAR 2006-07 ITSELF IN THE PRECEDING PARAS FOLLOWING THE VIEW TAKEN BY US ON THIS VERY ASPECT FOR THE ASSESSMENT YEAR 2003-04(ITA NO.S1396/HYD/2011) IN P ARA-9 OF THIS VERY ORDER WE HAVE RESTRICTED THE DISALLOWANCE OF LABOUR CHARGES TO 5%. FOR THE REASONS STATED IN THE ASSESSEES APPE AL WE SEE NO REASON TO TAKE A DIFFERENT VIEW. INCIDENTALLY THE REVENUE SEEMS TO HAVE ACCEPTED THE DECISION OF THE CIT(A) ON THIS IS SUE FOR ASSESSMENT YEARS 2003-04 TO 2005-06 AND ASSESSMENT YEAR 2009- 10. ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 12 36. IN THE RESULT THE REVENUES APPEAL FOR ASSES SMENT YEAR 2006-07 BEING ITA 1357/H/2011 IS DISMISSED. ASSESSEES APPEAL : ITA NO. 1400/H/2011 : ASST. YEAR: 2007-08 37. THIS APPEAL OF THE ASSESSEE IS ALSO DIRECTED A GAINST THE ORDER OF THE CIT(A) CONFIRMING THE ASSESSMENT MADE U/S 153A AND CONFIRMATION OF DISALLOWANCE OF 7% OF LABOUR AND SI TE EXPENSES. 38. AT THE TIME OF HEARING THE LEARNED AUTHORISE D REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE I S NOT PRESSING THE GROUNDS REGARDING LEGALITY AND VALIDITY OF ASSESSME NT U/S 153A. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE AGAI NST LEGALITY OF ASSESSMENT U/S 153A ARE REJECTED AS NOT PRESSED. 39. WITH REGARD TO THE MERITS OF CASE IN SO FAR AS IT PERTAINS TO DISALLOWANCE OF 7% OF LABOUR AND SITE EXPENSES ARE CONCERNED FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THOSE FOR THE ASSESSMENT YEAR 2003-04 IN ITA NO 1396/H/11 DISCUSSED ABOVE. WHILE THE ASSESSING OFFICER DISALLOWED 10% OF THE LABOUR EXPE NSES OF RS.31 80 02 095 ON THE GROUND THAT MOST OF THE VO UCHERS ARE SELF- MADE PAYMENTS HAVE BEEN MADE IN CASH AND THE IDENT ITY OF THE PAYEES HAS NOT BEEN ESTABLISHED TO ENABLE ANY VERIF ICATION ON APPEAL THE CIT(A) REDUCED THE DISALLOWANCE MADE BY THE ASS ESSING OFFICER TO 7% OF THE EXPENSES. 40. FACTS AND CIRCUMSTANCES OF THE CASE BEING IDE NTICAL EXCEPT FOR THE AMOUNT OF PAYMENTS INVOLVED FOR THE DETAIL ED REASONS DISCUSSED IN THE CONTEXT OF APPEAL FOR ASSESSMENT Y EAR 2003-04 (ITA NO.1396/HYD/2011) IN PARA-9 HEREINABOVE WE RESTRIC T THE DISALLOWANCE TO 5% OF LABOUR AND SITE EXPENSES. ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 13 41. IN THE RESULT APPEAL OF THE ASSESSEE BEING I TA NO.1400/HYD.2011 FOR ASSESSMENT YEAR 2007-08 IS PAR TLY ALLOWED. REVENUES APPEAL : ITA NO. 1358/H/2011 : ASST. YEAR: 2007-08 42. FOR THE ASSESSMENT YEAR 2007-08 REVENUE IS ALSO IN APPEAL AGAINST THE ORDER OF THE CIT(A) RESTRICTING THE DISALLOWANCE OF WORKMEN AND STAFF WELFARE EXPENSES TO 7% AS AGAINST 10% MADE BY THE ASSESSING OFFICER. WHILE DEALING WITH THE ASSE SSEES APPEAL IN ITA NO 1400/H/11 FOR THE ASSESSMENT YEAR 2007-08 ITSELF IN THE PRECEDING PARAS FOLLOWING THE VIEW TAKEN BY US ON THIS VERY ASPECT FOR THE ASSESSMENT YEAR 2003-04(ITA NO.1396/HYD/2011) IN PA RA-9 OF THIS VERY ORDER WE HAVE RESTRICTED THE DISALLOWANCE OF LABOUR CHARGES TO 5%. FOR THE REASONS STATED IN THE ASSESSEES APPE AL WE SEE NO REASON TO TAKE A DIFFERENT VIEW. INCIDENTALLY THE REVENUE SEEMS TO HAVE ACCEPTED THE DECISION OF THE CIT(A) ON THIS IS SUE FOR ASSESSMENT YEARS 2003-04 TO 2005-06 AND ASSESSMENT YEAR 2009- 10. WE THEREFORE FIND NO MERIT IN THE GROUNDS OF THE REVE NUE IN THIS APPEAL WHICH ARE ACCORDINGLY REJECTED. 43. IN THE RESULT REVENUE/S APPEAL FOR ASSESSME NT YEAR 2007- 08 BEING ITA NO.1358/HYD/2011 IS DISMISSED. ASSESSEES APPEAL : ITA NO. 1402/H/2011 : ASST. YEAR: 2009-10 44. THIS APPEAL OF THE ASSESSEE IS ALSO DIRECTED A GAINST THE ORDER OF THE CIT(A) CONFIRMING THE ASSESSMENT MADE U/S 153A AND CONFIRMATION OF DISALLOWANCE OF 7% OF LABOUR AND SI TE EXPENSES. ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 14 45 AT THE TIME OF HEARING THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE I S NOT PRESSING THE GROUNDS REGARDING LEGALITY AND VALIDITY OF ASSESSME NT U/S 153A. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE AGAI NST LEGALITY OF ASSESSMENT U/S 153A ARE REJECTED AS NOT PRESSED. 46. WITH REGARD TO THE MERITS OF CASE PERTAINING TO DISALLOWANCE OF 7% OF LABOUR AND SITE EXPENSES ARE CONCERNED FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THOSE FOR THE ASSESSMENT YEAR 2003-04 IN ITA NO 1396/H/11 DISCUSSED ABOVE. WHILE THE ASSESSING OFFICER DISALLOWED 10% OF THE LABOUR EXPE NSES OF RS.2 12 59 262 WORKING OUT TO RS.21 25 926 ON THE GROUND THAT MOST OF THE VOUCHERS ARE SELF-MADE PAYMENTS HAVE BEEN M ADE IN CASH AND THE IDENTITY OF THE PAYEES ARE NOT FURNISHED TO ENA BLE ANY VERIFICATION ON APPEAL THE CIT(A) REDUCED THE DISALLOWANCE MAD E BY THE ASSESSING OFFICER TO 7% OF THE EXPENSES. 47. FACTS AND CIRCUMSTANCES OF THE CASE BEING IDE NTICAL EXCEPT FOR THE AMOUNT OF PAYMENTS INVOLVED FOR THE DETAIL ED REASONS DISCUSSED IN THE CONTEXT OF APPEAL FOR ASSESSMENT Y EAR 2003-04 (ITA NO.1396/HYD/2011) IN PARA-9 HEREINABOVE WE ARE OF THE OP9IKION THAT DISALLOWANCE OF 5% OF LABOUR AND SITE EXPENSES IS REASONABLE. . 48. IN THE RESULT APPEAL OF THE ASSESSEE BEING I TA NO.1402/HYD.2011 FOR ASSESSMENT YEAR 2008-09 IS PAR TLY ALLOWED. 49. TO SUM UP WHILE OUT OF THE SIX APPEALS FILED BY THE ASSESSEE ITA NO 1396-1397 1399 1400 & 1402/HYD/ 2011 FILED BY THE ASSESSEE ARE PARTLY ALLOWED APPEAL ITA NOS.139 8/HYD/.2011 IS DISMISSED AND BOTH APPEALS OF THE REVENUE BEING ITA NOS.1357 AND 1358/H/11 FILED BY THE REVENUE ARE DISMISSED. ITA NO.1396-1400 & 1402 AND 1357-1358 /H/2011 M/S. GSP INFRATECH DEVELOPMENT LTD. HYDERABAD 15 ORDER PRONOUNCED IN THE COURT ON 27.12.2011 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 27TH DECEMBER 2011 COPY FORWARDED TO: 1. M/S. GSP INFRATECH DEVELOPMENT LTD. C/O. M/S.M. ANANDAN & CO. CHARTERED ACCOUNTANTS 7A SURYA TOWERS S.P. ROAD SECUNDERABAD. 2. ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 5 HYDERABAD 3. COMMISSION E R OF INCOME - TAX(A) - VII HYDERABAD I COMMISSIONER OF INCOME - TAX CENTRAL HYDERABAD 5. THE D.R. ITAT HYDERABAD. B.V.S.