Sarat Babu Chegurupati, Secunderabad v. DCIT., Circle-8(1), Hyderabad, Hyderabad

ITA 49/HYD/2015 | 2010-2011
Pronouncement Date: 28-09-2016 | Result: Allowed

Appeal Details

RSA Number 4922514 RSA 2015
Assessee PAN AFKPC3363D
Bench Hyderabad
Appeal Number ITA 49/HYD/2015
Duration Of Justice 1 year(s) 8 month(s) 19 day(s)
Appellant Sarat Babu Chegurupati, Secunderabad
Respondent DCIT., Circle-8(1), Hyderabad, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-09-2016
Date Of Final Hearing 21-09-2016
Next Hearing Date 21-09-2016
Assessment Year 2010-2011
Appeal Filed On 09-01-2015
Judgment Text
ITA NO 49 OF 2015 SARAT BABU CHEGURUPATI HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO.49/HYD/2015 (ASSESSMENT YEAR: 2010-11) SHRI SARATH BABU CHIGURUPATI HYDERABAD PAN: AFKPC 3363 D VS DY. COMMISSIONER OF INCOME TAX CIRCLE 8(1) IT TOWERS HYDERABAD FOR ASSESSEE: SHRI P. PRASAD FOR REVENUE: SMT. U. MINICHANDRAN DR O R D E R PER SMT. P. MADHAVI DEVI J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2010-11. IN T HIS APPEAL THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE CIT (A) IN CONFIRMING THE ACTION OF THE AO IN ESTIMATION OF IN COME FROM CONTRACTS AS WELL AS THE PROFIT MARGIN ON THE MOBIL IZATION OF FUNDS RECEIVED BY THE ASSESSEE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE E NGAGED IN THE BUSINESS OF CIVIL CONTRACTS FILED HIS RETURN O F INCOME FOR THE RELEVANT A.Y ON 02.10.2010 DECLARING THE INCOME OF R S.52 49 650. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT THE AO OBSERVED THAT THE ASSESSEE HAS REPORTED A TURNOVER OF DATE OF HEARING : 21.09.2016 DATE OF PRONOUNCEMENT : 28.09.2016 ITA NO 49 OF 2015 SARAT BABU CHEGURUPATI HYDERABAD PAGE 2 OF 4 RS.16 38 44 776. HE OBSERVED THAT THE ASSESSEE IS A LSO ENGAGED IN SHARE TRADING ACTIVITIES AND HAS SHOWN LOSS FROM T RADING OF SHARES. 3. WITH REGARD TO CIVIL CONSTRUCTION WORK THE AO V ERIFIED THE BILLS AND VOUCHERS MAINTAINED BY THE ASSESSEE A ND OBSERVED THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOU NT AND BILLS AND VOUCHERS PROPERLY AS THEY ARE MOSTLY SELF MADE AND WITHOUT ANY PROPER AND SUPPORTING EVIDENCE. SINCE THE ASSES SEE COULD NOT EXPLAIN WITH VALID EVIDENCE THE AO HELD THAT THE B OOKS OF THE ASSESSEE CANNOT BE RELIED UPON TO DEDUCE THE CORREC T INCOME OF THE ASSESSEE FOR A.Y 2010-11. FURTHER HE ALSO OBSER VED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.2.00 CRORES AS A DVANCE TAKEN AND THAT THE ASSESSEE HAS EXPLAINED THAT THE WORK COULD NOT BE EXECUTED BEFORE 31.03.2010 AND ALSO THAT THE TDS WAS DEDUCTED BY THE COMPANY BY OVERSIGHT AND THEREFORE THE ASSESSEE HAS NOT TAKEN THE SAME INTO ACCOUNT IN HIS BOOKS AN D ALSO IN THE TOTAL TURNOVER OF THE ASSESSEE FOR THE A.Y 2010-11. IT WAS ALSO STATED THAT THE TDS ON ACCOUNT OF RS.2.00 CRORES WI LL BE CLAIMED IN THE YEAR IN WHICH THE INCOME IS TO BE ASSESSED T O TAX. THE AO HOWEVER WAS NOT CONVINCED WITH THE ASSESSEES CONT ENTIONS AND HOLDING THAT THE ASSESSEE HAS FAILED TO SUBMIT WHY THE WORK WAS TAKEN ON SUB-CONTRACT BASIS AND ALSO AS TO WHY THE WORK WAS NOT COMPLETED HE ADOPTED THE TOTAL CONTRACT RECEIPT AS RS.18 80 05 301 AS REFLECTED IN THE 26AS AND THEREA FTER PROCEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE AT 8% OF THE GROSS CONTRACT RECEIPTS. AGGRIEVED THE ASSESSEE PR EFERRED AN ITA NO 49 OF 2015 SARAT BABU CHEGURUPATI HYDERABAD PAGE 3 OF 4 APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER O F THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. WHILE THE LEARNED COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUT HORITIES BELOW THE LEARNED DR SUPPORTED THE ORDERS OF THE A UTHORITIES. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO PLACED RELIAN CE UPON VARIOUS DECISIONS OF THE COORDINATE BENCHES OF THIS TRIBUNAL WHEREIN THE INCOME FROM CIVIL CONTRACTS HAS BEEN ES TIMATED AT 8% IN THE CASE OF MAIN CONTRACTORS AND 5% IN THE CASE O F SUB- CONTRACTORS. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD WE FIND THAT THOUGH THE ASSESSEE HAS CLA IMED TO BE A SUB-CONTRACTOR HE HAS FAILED TO PRODUCE ANY EVIDEN CE BEFORE THE AUTHORITIES BELOW IN SUPPORT OF SUCH CONTENTION. WE FIND THAT THE ASSESSEE HAS TAKEN THESE CONTENTIONS BEFORE BOTH TH E AUTHORITIES BELOW. BEFORE US ALSO THE ASSESSEE PLEADED THAT THE ASSESSEE WAS ONLY A SUB-CONTRACTOR. TAKING THE SAME INTO CONSIDE RATION AND ALSO IN THE INTEREST OF JUSTICE WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO THE ASSESSEE TO PRODUCE ALL THE RELEVANT MATERIAL BEFORE THE AO AND ALSO WITH A DIRECTION TO THE AO TO CONSIDER WHETHER THE ASSESSE E IS A SUB- CONTRACTOR AND ON THE BASIS OF SUCH MATERIAL TO ES TIMATE THE INCOME OF THE ASSESSEE AT THE RATES FIXED BY THIS T RIBUNAL IN VARIOUS DECISIONS. THE AO SHALL CONSIDER THE ISSUE DE NOVO IN ACCORDANCE WITH LAW. ASSESSEES APPEAL IS ACCORDING LY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO 49 OF 2015 SARAT BABU CHEGURUPATI HYDERABAD PAGE 4 OF 4 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2016. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 28 TH SEPTEMBER 2016. VINODAN/SPS COPY TO: 1 SHARMA & SASTRY CAS NO.5-3-318/1 JEERA MG ROA D SECUNDERABAD 500003 2 DY. COMMISSIONER OF INCOME TAX CIRCLE 8(1) IT TO WERS HYDERABAD 3 CIT (A)-III HYDERABAD 4 CIT II HYDERABAD 5 THE DR ITAT HYDERABAD 6 GUARD FILE BY ORDER