THE ACIT, CIRCLE - 1, RAJAHMUNDRY vs. ARUN KUMAR MISHRA, DOWLAISWARAM

The assessee is engaged in the civil contract works. For the A.Y.2009- 10 the assessment was completed u/s 144A of the Income Tax Act by an order dated 29.12.2011 on the total income of Rs.1,32,37,042/- against the returned income of Rs.16,48,160/-. In the assessment the Assessing Officer(AO) made the following additions to the Returned income. (i) 50% disallowance of sundry creditors u/s 68 - Rs.47,33,240/- (ii) 50% disallowance of wages - Rs.85,03,802/- The AO made the above additions for non-response and non- production of the required information and the books of accounts.

Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) directed the AO to estimate the income @12.5% on the total contract receipts and accordingly allowed the appeal

The department has filed appeal mentioning the assessment year as 2010-11 in Form No.36 instead of 2009-10. Meanwhile the assessee’s appeal was taken up for hearing on 15.09.2015 and disposed of by an order dated 24.09.2015 and scaled down the estimation of income from 12.5% to 6%. Though the D.R was present at the time of hearing, the fact that the department has filed the cross appeal was not brought to the notice of the tribunal. The departmental appeal has come up for hearing finally on this 26th day of April 2019.

During the appeal hearing, the Ld.DR brought to our notice that the department has the filed appeal for the A.Y.2009-10 which was not mentioned by mistake at the time of hearing the assessee’s appeal. Ld.DR further submitted that the assessee’s appeal was disposed and the departmental appeal is pending for the A.Y. 2009-10. Therefore, the Ld.DR

We have carefully gone through the appeal papers of the department and observed that the department has filed appeal for the A.Y. 2009-10 mentioning the A.Y.2010-11 in Form 36, thus there is no valid appeal pending before the court for the A.Y.2009-10. Though the assessee’s appeal was disposed off on 24.09.2015 and both the parties were present at the time of appeal hearing, neither of them have brought the pendency of departmental appeal before the Tribunal. We observe that the appeal filed by the department is defective in as much as mentioning the A.Y. 2010-11 in Form No.36 instead of 2009-10 and the department did not take steps to correct the defect in Form No.36, inspite of sufficient time allowed to them. Therefore, the departmental appeal is inadmissible and accordingly dismissed in limine.

The AO has also filed miscellaneous application against the order of the Tribunal in I.T.A No.384/Viz/2014 dated 24.09.2015 for the A.Y. 2009- 10.

We have heard both the parties and gone through the appeal orders. While adjudicating the issue, this tribunal has considered the activities of the assessee and also found that the assessee is engaged in civil and fabrication contracts. This tribunal has gone through the orders of the lower authorities and the information available in the paper book submitted by the assessee with regard to the profit margins of the earlier years and held that the estimation of income @6% is reasonable. Accordingly we have considered all the issues and do not find any mistake in the order. Hence there is no case for modification or rectification of the order passed by us. Accordingly the Miscellaneous Application filed by the revenue is dismissed.