GOWTHAMI BUILDERS,RAVULAPALEM vs. INCOME TAX OFFICER, WARD-2, AMALAPURAM

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON’BLE ACCOUNTANT MEMBER ITA No. 64/VIZ/2018 (Asst. Year : 2004-05) M/s. Gowthami Builders, vs. ITO, Ward-2, 8-509, Main Road, Amalapuram. Ravulapalem, E.G. District. PAN No. AABFG 0928 N (Appellant) (Respondent) Assessee by : Shri G.V.N. Hari – Advocate. Department By : Smt. Suman Malik – Sr.DR Date of hearing : 22/01/2019. Date of pronouncement : 13/02/2019. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Tirupati, dated 29/12/2017 for the Assessment Year 2004-05. 2. Facts of the case, in brief, are that assessee is a firm carrying on business in civil contracts, filed its return of income admitting total income of Rs. 4,23,990/-. The return filed by the assessee was processed under section 143(1), and after following due procedure, assessment was completed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). In

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the assessment order, the Assessing Officer has noted that on examination of the books of accounts, it is observed that the assessee-firm incurred expenditure of Rs. 1,84,43,078/- under various heads including material and labour payments. Out of this expenditure, a major part of the expenditure is supported by self- made vouchers and most of these vouchers are considered to be defective and do not contain full addresses of the claimants. Accordingly, the Assessing Officer proposed to disallow Rs. 2.00 lakhs out of the total expenditure claimed and the same is added to the returned income. 3. On appeal, ld. CIT(A) enhanced the disallowance to Rs.3,16,912 by estimating net profit at 8%. 4. On being aggrieved, assessee carried the matter in appeal before this Tribunal. 5. We have heard both the sides, perused the material available on record and orders of the authorities below. 6. The assessee has incurred expenditure on various heads. When the Assessing Officer asked, assessee filed all the details, however, the Assessing Officer is of the view that some of the expenditure incurred by the assessee are self-made vouchers. Therefore, he has disallowed an amount of Rs. 2.00 lakhs out of the total expenditure claimed by the assessee. The ld. CIT(A)

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enhanced the same to Rs. 3,16,912/- without giving any reason for enhancement as against the disallowance made by the Assessing Officer of Rs. 2.00 lakhs. In our opinion, the Assessing Officer has rightly disallowed an amount of Rs. 2.00 lakhs by considering the total facts and circumstances of the case. In our opinion, in the interest of justice, the disallowance to the extent of Rs. 2.00 lakhs is justified and therefore we reverse the order passed by the ld. CIT(A). Thus, this appeal filed by the assessee is partly allowed. 7. In the result, appeal filed by the assessee is partly allowed. Order Pronounced in open Court on this 13th day of Feb., 2019.

Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated: 13th Feb., 2019. vr/- Copy to: 1. The Assessee - M/s. Gowthami Builders, 8-509, Main Road, Ravulapalem, E.G. District. 2. The Revenue – ITO, Ward-2, Amalapuram. 3. The Pr.CIT, Rajahmundry. 4. The CIT(A), Tirupati. 5. The D.R., Visakhapatnam. 6. Guard file. By order

(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.