DATIN INFRASTRUCTURE PRIVATE LIMITED, HYDERABAD,HYDERABAD vs. ITO, WARD-17(1), HYDERABAD, HYDERABAD

Brief facts of the case are that the assessee company, engaged in the business of undertaking civil contracts, had filed its return of income for the A.Y 2012-13 on 30.09.2012 declaring an income of Rs.4,02,910. During the assessment proceedings u/s 143(3) of the Act, the AO observed that the assessee company has shown gross receipts at Rs.5,72,67,014 as against which, the net profit of Rs.45,87,089 has been shown. However, he noticed that in Form No.26AS, the gross receipts are shown as Rs.5,82,63,409. The assessee was therefore, asked to explain this discrepancy. Since the assessee could not explain the discrepancy, the AO rejected the books of account and treated the sum of Rs.5,82,63,409 as assessee’s gross receipts and estimated the profit at 12.5% of the gross receipts and also made an addition of Rs.75,92,353 towards unexplained credits. Against the additions, the assessee preferred an appeal before the CIT (A), who granted partial relief by reducing the gross profit to 8% of the gross receipts and confirmed the addition made u/s 68. Aggrieved, the assessee is in appeal before us.

At the time of hearing, the learned Counsel for the assessee submitted that the assessee is maintaining proper books of account and therefore, the books of account ought not to have been rejected. Without prejudice to the above, he also submitted that the assessee itself has reported little more than 8% of the gross receipts as its income. As regards the addition of unexplained cash credits u/s 68 of the Act, he relied upon the contentions made by the assessee before the authorities below.

The learned DR, however, supported the orders of the authorities below.

Having regard to the rival contentions and the material on record, we find that the CIT (A) has reduced the gross profit to 8% of the gross receipts and the Revenue is in appeal before us. As fairly admitted by the learned Counsel for the assessee, the income returned by the assessee is a little more than 8% of the gross receipts. Therefore, we see no reason to interfere with the order of the CIT (A).

As regards the unexplained credits u/s 68, we find that the assessee has not been able to substantiate its claim with any evidence either before the authorities below or before us. In view of the same, we see no reason to interfere with the order of the CIT (A) on this issue.

In the result, assessee’s appeal is dismissed. Order pronounced in the Open Court on 8th June, 2018. Sd/- Sd/- (S.Rifaur Rahman) (P. Madhavi Devi) Accountant Member Judicial Member Hyderabad, dated 8th June 2018. Vinodan/sps Copy to: