Itta/430/2014 Of Commissioner Of Income Tax-Ii v. M/S Hycons Infrastructure [India] Limited

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 430 of 2014 DATED:17.07.2014 Between:The Commissioner of Income Tax-II,Hyderabad.And … Appellant M/s. Hycons Infrastructure (India) Ltd.,Hyderabad. ….Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA ANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 430 of 2014 Judgment:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred against the judgmentand order of the learned Tribunal dated 23.10.2013 in relation tothe assessment year 2007-2008 on the following suggestedquestion of law: 1. In the facts and circumstances of the case,whether the Hon’ble Income Tax Appellate Tribunal iscorrect in law in holding that once the income of theRespondent-assessee was estimated by rejecting thebooks of account, the Assessing Officer cannot makeany disallowance under Section 40(a)(ia) of theIncome Tax Act, 1961 when the labour payments asclaimed by the Respondent-assessee are liable to bedisallowed and to be added in terms of Section 40(a)(ia) of the Income Tax Act, 1961 ? It appears from the records that there has been noproduction of books of accounts. Naturally, all the authoritiesbelow estimated profit at 8%. Mr.B. Narasimha Sarma, learned counsel for the appellantsubmits that even then, the provisions of Section 40(a)(ia) of theIncome Tax Act, 1961 (for short ‘the Act’) will have to beconsidered as it was amended subsequently. We are of the view that amendment or no amendment, if theprofit is estimated on any ground, whether ignoring books ofaccounts or rejection thereof, then there is no scope forallowability/disallowability of any deduction. In our consideredview, the above provision mentions how to consider the samewhen the books of accounts are available and the same shall beaccepted on fact by the authorities below. In the circumstances, the appeal is dismissed. Consequently, the miscellaneous applications, if anypending, shall also stand closed. No costs. __________________ K.J. SENGUPTA, CJ _________________ SANJAY KUMAR, J 17[th] July, 2014 pnb