Case Law Details
DCIT Vs Sree Nagendra Constructions & Ors. (ITAT Hyderabad)
We find that in the case of MAA Highways, it has been observed that the assessments in the said case have also been done u/s 153A of the Act, pursuant to the search conducted in the group cases of M/s Madhucon Projects Ltd on the same date i.e. 4.2.2011. In the said case also, the Revenue had sought remand of the matters to the file of the CIT (A) to decide along with the cases of Madhucon Projects Ltd. After considering the arguments of both the parties at length, this Tribunal has held that the assessee being a sub-contractor and since its books of account were not reliable, the income can be estimated at 8% of the gross receipts where the assessee is a main contractor and at 5% if it is a sub-contractor. Further, it has also been observed that where the income has been estimated, then there cannot be any disallowance of expenditure as held by the jurisdictional High Court in the case of M/s Indwell Constructions Ltd (232 ITR 776).
In the case before us also, the AO has made the estimation on the ground that the assessee had not incurred any expenditure and the amounts were never used for its business activities and were returned back to the main contractor. Since the facts and circumstances are the same before us as in the case of Maa Highways and since we have confirmed the estimation of income by the AO at 8% in the case of main contractor and 5% in the case of a sub-contractor, we see no reason to interfere with the order of the CIT (A).
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
ITA No.202/Hyd/2015 is the appeal filed by M/s. Sree Nagendra Constructions for the A.Y 2011-12, while ITA No.167/Hyd/2015 is the appeal filed by the Revenue against the relief granted to M/s. Sree Nagendra Constructions for the A.Y 2009-10. All the other appeals are cross appeals filed by the respective assessees as well as the Revenue for the A.Y 2011-12, against the orders of the CIT(A), Hyderabad, dated 28.11.2014 respectively.
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