KRR INFRA PROJECTS PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX , CIRCLE-2(1), HYDERABAD

We notice at the outset that the assessee's identical substantive grounds raised in both these appeals challenge correctness of lower authorities’ action inter alia estimating 9% profit element on gross receipts of Rs.571,73,84,001 and Rs.192,42,57,336; section 40(a)(ia) disallowance on account of non-deduction of TDS of Rs.410,84,69,323 and 10,70,60,166 followed by treatment of interest income of Rs.96,98,339 as income from other sources than business income in Assessment Year 2012-13 and difference in Form 26AS of Rs.4,43,17,395 in Assessment Year 2013-14; respectively.

The assessee's first and foremost argument before us is that both the lower authorities' have erred in law and on facts in estimating 9% income element pertaining to its contract receipts without even rejecting the books of accounts. Learned counsel fails to dispute that this instant assessments involve section 144 “best judgment” proceedings wherein the assessee had failed even to

Next issue in both these appeals is that of correctness of income estimation @ 9% profit element on contract works as against 8% claimed at assessee's behest. It fails to dispute the hon’ble jurisdictional high court’s recent decision in & 41/2020 DCIT Vs. Mac Engineering and vice versa dt.24.2.2021 has upheld the tribunal direction(s) to the Assessing Officer for adopting profit estimation @ 9% and 6% qua contract and sub- contract receipts; respectively. We, therefore decline the assessee's instant second argument as well.

Learned counsel’s last contention as per the assessee's detailed paper book running into 126 pages for Assessment Year 2012-13 and 286 pages for Assessment Year 2013-14 is that both these impugned assessment years involves the assessee sub-contractual receipts as well which ought to have been sustained to the corresponding latter estimation

Next comes the second issue of 40(a)(ia) disallowance in both these assessment years under consideration. Suffice to say, it has come on record that we are dealing with an instance of estimation of income on gross turnover and therefore, section 40(a)(ia) will not apply as hon’ble jurisdictional high court’s landmark decision in Indwell

Coming to the remaining issue of income from other sources and difference in Form 26AS (supra), learned counsel inter alia argued that the same represents business income in former and that corresponding taxable income already stand assessed; respectively. Be that as it may, both the instant issues require a fresh factual verification. We therefore restore the same back to the Assessing Officer for his necessary exercise to this effect. The assessee is directed to place on record all necessary details.

Both these assessee's appeals are partly allowed for statistical purposes. A copy of this common order be placed in the respective files.