Itta/402/2018 Of M/S.totem Infrastructure Limited v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD TUESDAY, THE TWENTY NINTH DAY OF AUGUSTTWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE LAXMI NARAYANAALISHETTY INCOME TAX TRIBUNAL APPEAL No: 402 of2018 lncome Tax Tribunal Appeal Under Section 260-4 of the lncome Tax Act,1961agalnst the order of the lncome Tax Appellate Tribunal, Hyderabad. Bench ' B',Hyderabad in ITA No.650/Hydl2O13, for assessment Year 2009-10 dated 0Z-03-2014, preferred against the Order of the Commissioner of lncome Tax (Appeals)-lll,Hyderabad, ITA No.0389/ACIT 2(3yClT (A)-llll2o11-12, dated 08-01-2013, preferredagainst the Order of the Assistant Commissioner of lncome Tax, Circle-2(3),Hyderabad, PAN/G lR No. , dated : 28-1 2-201 1 . Between: M/s. Totem lnfrastructure Limited, 86, Lumbini Springs, Gachibowli, Hyderabad -500 032. AABCK7020Q ...Appellant AND The Assistant Commissioner of lncome Tax, Circle.2 (3), Hyderabad. ...Respondent CoUnsel for the Appellant: SRI K. VASANT KUMARCounsel for the Respondent: Ms. K. MAMATA CHOUDARYThe Court delivered the following: JUDGMENT THT)IION'BLE SRI JUSTICE P.SAN{ KOSIIYAND THE HON,BLE SRI JUSTICE LAXMI NARA\,A\A /.LISHETTYI.T.'T A.No. 402 ol'2018 JUDGMENT [(trer ]Hon'ble Sri Justice P.SAM KOSfly) Heard Mr.K"Vasant Kumar, leamed counsel for th,: itpp,:llant andMs.K.Mamata learned counsel appearing for the responttent. Perusedthe material on record. 2. This appea under Section 260,{ of the Incomt: Tax Ar:t, 1961, hasbeen preferred by the appellant against the order dated 07.03.2014 [passed]by the Income I'ax Appellate Tribunal, Hyderabad llench 'B',Hyderabad, in I.'I.A.No.650lHydl20l3 for the Assessmenl Year 2009-201 0. 3. The primary contention of the appellant while assailin [q ]the orclerof the Tribunal is that the department ought not ha're tak:n thr: entiretumover for the assessment oftax but should have taken the net frofit tobe considered at 8%, for the purpose ofassessment of tzrx. 4. Upon going :hrough the order of the Tribunal we lind that theAppellate Tribunal has dealt and deliberated upon th,: said is,sue in itsorder in paragraph Ir o.7, the same is extracted below: 2. This appea under Section 260,{ of the Incomt: Tax Ar:t, 1961, hasbeen preferred by the appellant against the order dated 07.03.2014 [passed]by the Income I'ax Appellate Tribunal, Hyderabad llench 'B',Hyderabad, in I.'I.A.No.650lHydl20l3 for the Assessmenl Year 2009-201 0. 3. The primary contention of the appellant while assailin [q ]the orclerof the Tribunal is that the department ought not ha're tak:n thr: entiretumover for the assessment oftax but should have taken the net frofit tobe considered at 8%, for the purpose ofassessment of tzrx. 4. Upon going :hrough the order of the Tribunal we lind that theAppellate Tribunal has dealt and deliberated upon th,: said is,sue in itsorder in paragraph Ir o.7, the same is extracted below: We have considered the submissions of the partiesand perused the material on record. In this case, thereis a difference between the turnover shown in thebooks of accounts and turnover reflected in FormNo.26AS generated from AST system of ITDand perused the material on record. In this case, thereis a difference between the turnover shown in thebooks of accounts and turnover reflected in FormNo.26AS generated from AST system of ITDapplication. The reconciliation fumished by theassessee is not supported by any cogent material, likecopy ofaccount with the concerned custorner/party. Inour opinion, the entire tumover difference ofRs.14,77,77,984/- is to be considered as suppressedtumover. Regarding consideration of the entireturnover as income, the plea of the assessee is thatonly net profit is to be considered, at \Yo. In this case,the assessee failed to establish that the correspondingexpenditure relating to this turnover has not at all beenbooked in its books of accounts. The assessee's pleacopy ofaccount with the concerned custorner/party. Inour opinion, the entire tumover difference ofRs.14,77,77,984/- is to be considered as suppressedtumover. Regarding consideration of the entireturnover as income, the plea of the assessee is thatonly net profit is to be considered, at \Yo. In this case,the assessee failed to establish that the correspondingexpenditure relating to this turnover has not at all beenbooked in its books of accounts. The assessee's pleacan be accepted only if the corresponding expenditurerelating to this turnover is not at all booked by theassessee in its books of account. Since the assesseeassessee in its books of account. Since the assesseefailed to substantiate that the expenditure relating tothis tumover has not at all been claimed in its regularbooks of accounts, we are not inclined to allow thesame. Being so, it is to be held that the correspondingexpenditure relating to this suppressed tumover hasalready been booked by the assessee, the entireundisclosed tumover is to be considered as income ofthe assessee. Accordingly, we do not find anyinfirmity in the orders of the lower authorities. In thisview of the matter, we confirm the order of the CIT(A) and reject the grounds raised by the assessee.this tumover has not at all been claimed in its regularbooks of accounts, we are not inclined to allow thesame. Being so, it is to be held that the correspondingexpenditure relating to this suppressed tumover hasalready been booked by the assessee, the entireundisclosed tumover is to be considered as income ofthe assessee. Accordingly, we do not find anyinfirmity in the orders of the lower authorities. In thisview of the matter, we confirm the order of the CIT(A) and reject the grounds raised by the assessee. Further, we find that the said issue has also been dealt withCommissioner of Appeals in its order dated 08.01.2013 in paragraphNo.7.l, wherein again the view of the Commissioner of Appeals was thatthe appellant has failed even during the appeal proceedings in providing the evidence to reconcile the differences, so far as, the arlditional turn over that was delected later. Further, we find that the said issue has also been dealt withCommissioner of Appeals in its order dated 08.01.2013 in paragraphNo.7.l, wherein again the view of the Commissioner of Appeals was thatthe appellant has failed even during the appeal proceedings in providing the evidence to reconcile the differences, so far as, the arlditional turn over that was delected later. '/.1 I have looked at the facts and the evidenct: onrecord. ['lhe ]assessing officer had exarnined the i:;srrein detait and reconciled the individ -ral ]-DSceftificat,)s of various contracts with the gro;sReceipts of those contracts. lt has been cleirrly fourrdthat evex after reconciliation of individual accountsthere is a difference of Rs.14,77,77,984/-. Elen durir:gappeal prcceedings the appellant did not pr,rvide anyevidence lo reconcile this difference. Theref,rre. giventhe facts and circumstances I have no opticn bu: loconfirm the addition. This issue is also d:cided infavour of revenue. 5. Given the lacts of the case, we are of the firnr view that the issueraised by the app,:llant would not be a substantial qrestion ,rf Irw to beconsidered, rather is a question of fact which has be,:n dealt, deliberatedand discussed by Jommissioner of Appeals which h,rs been affinned bythe ITTA while dialing with the said issue. Thus, the appeal is devoid ofmerits and deserves 1o be rejected. 6. So far as th,: [judgments ]referred to by the learned counse for theappellant, in S.V.l\Iaruthi & T.N.C.Rangarajan, JJI and ltainik & Co. Vs. Assistant Cornmissioner of Income Tax2. A [plain ][perusaI ]of the '(rgss) [z:z ][rrR ][776 ][(AP)] '1zoot) [zsr ][rrR 5G1(AP)] facts in which the said decisions have been rendered would clearly reflectthat those are entirely different factual background and cannot be madeapplicable to the facts of the present case, more parlicularly, when thetwo forums i.e., the CIT Appeals as also by the ITAT been specificallydealt with the issue and would not be applicable as it distinguished fromthe facls ofthe present case. 7. Accordingly, the appeal stands rejected. 8. As a sequel, miscellaneous applications pending if any in this writpetition, shall stand closed.petition, shall stand closed. Sd/. B.S.CHIRANJEEVIJOINT-REGISTRAR(iJOINT-REGISTRAR(iSECTION OFFICER //TRUE COPY// To, 1. The lncome Tax Appellate Tribunal, Hyderabad Bench ' B', Hyderabad. 2. The Commissioner of lncome Tax (Appeals)-lll, Hyderabad. 3. The Assistant Commissioner of lncome Tax, Circle-2 (3), Hyderabad 4. One CC to SRI K. VASANT KUMAR, Advocate 5. One CC to Ms. K. MAMATA CHOUDARY, Advocate 6. Two CD Copies kam PR{Pq HlGH COURPSK,J & LNA,JDATED:2910;J12023 JUDGMENTITTA.No.402 ot 2018 THE APPEAL STANDSREJECTED trl,.c\,6\to\,g' :=\1l:1.ot*tlJ$)o{5-l!F\,doF\(/a\tJHc.?.