The DCIT, Circle-3(1), Visakhapatnam v. M/s Sree Bhavani Builders, Visakhapatnam

MA 214/VIZ/2010 | 2007-2008
Pronouncement Date: 25-01-2011 | Result: Dismissed

Appeal Details

RSA Number 21425324 RSA 2010
Assessee PAN ABKFS2677N
Bench Visakhapatnam
Appeal Number MA 214/VIZ/2010
Duration Of Justice 2 month(s) 1 day(s)
Appellant The DCIT, Circle-3(1), Visakhapatnam
Respondent M/s Sree Bhavani Builders, Visakhapatnam
Appeal Type Miscellaneous Application
Pronouncement Date 25-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-01-2011
Assessment Year 2007-2008
Appeal Filed On 23-11-2010
Judgment Text
MA NOS.213 214 OF 2010 SREE BHAVANI BUILDERS VIZAG PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER M.A.NO.213 & 214/VIZAG/2010 (ARISING OUT OF ITA NOS.434 & 435/VIZAG/2009) ASSESSMENT YEARS: 2006-07 & 2007-08 DY.COMMISSIONER OF INCOME TAX CIRCLE-3(1) VISAKHAPATNAM VS. M/S SREE BHAVANI BUILDERS VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO:ABKFS 2677 N APPELLANT BY: SHRI D.S.SUNDER SINGH SR.DR RESPONDENT BY: SHRI C.V.S. MURTHY CA ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THESE TWO MISCELLANEOUS PETITIONS HAVE BEEN FILED AT THE INSTANCE OF THE REVENUE SEEKING RECTIFICATION OF THE COMMON ORD ER DATED 18-5-2010 PASSED BY THIS BENCH IN THE CASES CITED ABOVE. 2. THE FACTS WHICH LEAD TO THE FILING OF THESE PETI TIONS ARE STATED IN BRIEF. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF EXECUTION OF CIVIL CONTRACT WORKS. THE ASSESSMENTS IN THE HANDS OF TH E ASSESSEE FOR THE TWO ASSESSMENT YEARS STATED ABOVE WERE COMPLETED BY EST IMATING THE TOTAL INCOME AT 11.5% OF THE GROSS CONTRACT RECEIPTS CLEA R OF DEPRECIATION. IN THE APPEAL FILED BY THE ASSESSEE THE LEARNED CIT (A) R EDUCED THE ESTIMATE TO 10% OF GROSS CONTRACT RECEIPT AND DIRECTED THE ASSE SSING OFFICER TO ALLOW THE CURRENT DEPRECIATION AS WELL AS UNABSORBED DEPR ECIATION. THE REVENUE PREFERRED APPEAL BEFORE THE TRIBUNAL CHALLENGING TH E DECISION OF THE LEARNED CIT (A) AND THE ITAT ESTIMATED THE INCOME OF THE AS SESSEE AT 10.5% OF THE GROSS RECEIPTS BEFORE ARRIVING DEPRECIATION AND REM UNERATION TO PARTNERS. MA NOS.213 214 OF 2010 SREE BHAVANI BUILDERS VIZAG PAGE 2 OF 4 WITH REGARD TO THE ALLOWABILITY OF THE DEPRECIATION THE TRIBUNAL AFFIRMED THE ORDER OF THE LEARNED CIT (A). 3. DURING THE COURSE OF HEARING OF MAIN APPEAL THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE THEN AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAD AGREED TO THE PR OPOSAL TO ESTIMATE THE INCOME AT 11.5% OF THE GROSS CONTRACT RECEIPTS. IT WAS NOTICED BY THE BENCH FROM THE RECORD THAT THE ASSESSING OFFICER HA D ORIGINALLY PROPOSED 11.5% BEFORE ALLOWING DEPRECIATION AND THE THEN AUT HORISED REPRESENTATIVE AGREED TO THE SAID PROPOSAL. HOWEVER THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY ESTIMATING THE INCOME AT 11.5% OF THE GROSS RECEIPTS WITHOUT ALLOWING DEPRECIATION CLAIM OF THE ASSESSEE . AFTER CONSIDERING THE RECORD AND ARGUMENTS OF THE COUNSEL THE TRIBUNAL H AS OBSERVED AS UNDER: 4.3 THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED HEAVILY ON THE POINT THAT THE THEN AUTHORISED REPRESENTATIV E OF THE ASSESSEE HAD AGREED TO THE PROPOSAL TO ESTIMATE THE INCOME AT 11.5%. HOWEVER WE NOTICE THAT AFTER ARRIVING AT A PROPOSAL ON 02.07.2008 AS CONTENDED BY THE LEARNED AUTHORISED REPRESENTATIVE BEFORE US THERE WAS NO NECESSITY FO R THE ASSESSING OFFICER TO REPOST THE CASE TO 14 TH AUGUST 2008. FROM THE COPY OF ORDER SHEET FILED BY LEARNED DEPARTMENT AL REPRESENTATIVE IT IS NOT DISCERNIBLE AS TO WHAT DI SCUSSED ON THE SUBSEQUENT DATE. IT IS ALSO NOT CLEAR AS TO WHA T PROMPTED THE ASSESSING OFFICER TO CHANGE HIS MIND FROM THE E ARLIER PROPOSAL IN NOT ALLOWING DEPRECIATION ON THE OPENIN G WDV AND THUS IN EFFECT THE ASSESSING OFFICER HAS ALSO GON E BACK FROM HIS PROPOSAL THAT WAS AGREED BY THE THEN AUTHORISED REPRESENTATIVE OF THE ASSESSEE. IN ANY CASE AS NOT ICED EARLIER THE ASSESSING OFFICER HAS REFERRED TO A CASE WHICH IS MORE THAN 10 YEARS OLD AND HENCE THE SAME CANNOT BE TAKE N AS A COMPARABLE CASE. THE ASSESSING OFFICER HAS PARTICUL ARLY FAILED TO TAKE INTO CONSIDERATION THE PECULIAR FEATURES OF THE CASE WHICH WE ARE DISCUSSING IN THE ENSUING PARAGRAPHS. 4. IN THE MISCELLANEOUS PETITION IT IS SUBMITTE D AS UNDER WITH REGARD TO THE NON DEDUCTION OF DEPRECIATION FROM THE INCOME E STIMATED BY THE ASSESSING OFFICER. MA NOS.213 214 OF 2010 SREE BHAVANI BUILDERS VIZAG PAGE 3 OF 4 WITH REGARD TO THE CLAIM OF DEPRECIATION IT IS SUB MITTED THAT THE AO HAS NEVER SAID THE QUANTUM OF ALLOWANCE OF DEPRECIATION AND ONLY SAID THAT AFTER ARRIVING AT E STIMATED INCOME THE DEPRECIATION SHALL BE ALLOWED. IN THE I NSTANT CASE THE ASSESSEE COULD NOT SUBSTANTIATE THE EXISTENCE O F ASSETS AS AT 31/03/2006 I.E. BEGINNING OF THE ASSESSMENT YEAR 2006-07 AFTER A GAP OF ABSENCE OF BUSINESS WHICH IS A GENUI NE DOUBT. THE CONTENTION OF THE ASSESSEE THAT THE OPENING WDV HAS TO BE TAKEN FROM THE CLOSING WDV OF ASSESSMENT YEAR 20 05-06 CANNOT BE GIVEN ANY COGNIZANCE IN AS MUCH AS THE PR OCEEDINGS WERE NOT UNDER SCRUTINY. THUS THE FIRST SCRUTINY AF TER SUCH ABSENCE OF BUSINESS WAS DURING AY: 2006-07 WHEREIN IT WAS DULY EXAMINED BY THE ASSESSING OFFICER AND CONCLUDE D NOT TO ALLOW SUCH OPENING WDV. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE REIT ERATED THE CONTENTIONS MADE IN THE PETITION AND ACCORDINGLY SUBMITTED THAT SUITABLE MODIFICATIONS MAY BE MADE IN THE IMPUGNED ORDER OF THE TRIBUNAL. 6. ON THE OTHER HAND THE LEARNED AUTHORISED RE PRESENTATIVE CONTENDED THAT THE PLEA OF THE DEPARTMENT WOULD AMOUNT TO REV IEW OF THE IMPUGNED ORDER OF THE TRIBUNAL WHICH IS NOT PERMITTED UNDER SECTION 254(2) OF THE ACT. 7. WE HAVE HEARD THE RIVAL CONTENTIONS. WE NOT ICE THAT THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS FILED A PAPER BOOK WHEREIN THE COPIES OF ORDER SHEET OF THE ASSESSING OFFICER PERTAINING TO BOTH THE ASSESSMENT YEARS WERE PLACED. WE NOTICE THAT THE TRIBUNAL HAS TAKEN A VIEW AFTER DULY CONSIDERING THE COPIES OF SAID ORDER SHEETS THE AR GUMENTS OF THE COUNSEL AND THE RECORD. THE SUBMISSIONS MADE WITH IN THE M ISCELLANEOUS PETITION FOR NOT ALLOWING THE DEPRECIATION ARE NOT BORNE OUT OF RECORD. IN THESE CIRCUMSTANCES THE PRAYER MADE IN THE PETITION WOUL D AMOUNT TO A REQUEST TO REVIEW THE IMPUGNED ORDER OF THE TRIBUNAL WHICH THE TRIBUNAL IS NOT AUTHORISED TO DO UNDER SECTION 254(2) OF THE ACT. IN EFFECT THE DEPARTMENT HAS FAILED TO POINT OUT ANY MISTAKE APPARENT FROM T HE RECORD WHICH WOULD MA NOS.213 214 OF 2010 SREE BHAVANI BUILDERS VIZAG PAGE 4 OF 4 WARRANT RECTIFICATION OF THE IMPUGNED ORDER. ACCOR DINGLY WE DECLINE TO INTERFERE WITH THE IMPUGNED ORDER OF THE TRIBUNAL. 8. IN THE RESULT THE MISCELLANEOUS PETITIONS OF THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 25-01-2011 COPY TO 1 THE DY.COMMISSIONER OF INCOME TAX CIRCLE - 3(1) VISAKHAPATNAM 2 M/S SREE BHAVANI BUILDERS 9-20-1 CBM COMPOUND V ISAKHAPATNAM 3 4. THE CIT 1 VISAKHAPATNAM THE CIT(A)-1 VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM