IN THE ITAT HYDERABAD BENCH ‘A’
Nagarjuna Construction Co. Ltd.
V/s.
Deputy Commissioner of Income-tax
IT (SS) APPEAL NOS. 88 & 94 (HYD.) OF 2004
[BLOCK PERIOD : ASSESSMENT YEARS 1996-97 TO 2001-02 AND UPTO 20-12-2001]
MARCH 30, 2012
ORDER
Chandra Poojari, Accountant Member
These two appeals are cross appeals directed against the order of the CIT(A)-I, Hyderabad dated 10.6.2004 for the block period A.Ys. 1996-97 to 2001-02 and up to 20.12.2001.
2. Brief facts of the issue are that in this case there was a search action u/s. 132 of the Income-tax Act, 1961 on 20.12.2001 and the same was finally concluded on 4.3.2002. Consequent to the search action notice u/s. 158BC was issued on 14.02.2003. The assessee filed return of income on 22.3.2002 admitting undisclosed income of Rs. 2,98,51,129. Assessment was completed u/s. 143(3) r.w.s. 158BC of the Act on 16.1.2004 by determining undisclosed income of the assessee at Rs. 29,24,23,330 for the block period. While making the assessment the Assessing Officer rejected books of account of the assessee and estimated the income of the assessee u/s. 145 of the Act for A.Ys. 1996-97, 1997-98 and 2000-01, the percentage of income admitted before depreciation as shown in the books of account was 11.57%, 10.57% and 10.53%, respectively. Since the income declared in these years was more than 10% of gross contract receipts, the trading results shown in the regular returns of income have not been disturbed. The percentage of income before depreciation shown in the A.Ys. 1998-99, 1999-2000, 2000-01, 2001-02 and part period 1.4.2001 to 20.12.2001 was shown at 9.07%, 8.5%, 4.49% and 5.59%, respectively. In these years, the income has been estimated at 10% of the gross receipts. For estimating the income at 10% the Assessing Officer has cited two comparable cases viz., M/s. Prasad & Company (PW) and M/s. SEW Construction Ltd. He has, therefore, estimated the undisclosed income from construction activity for the block period at Rs. 22,77,88,361. In addition to this, one more addition of Rs. 6,46,34,972 being interest accrued on amount advanced to Mr. V. Srinivasa Raju on the basis of calculations shown in the loose sheets has been made. Thus, the total undisclosed income for the block period has been computed at Rs. 29,24,23,330 by assessing officer as follows:
