UPKAR INFRA PROJECTS PVT.LTD., HYD,HYDERABAD vs. DCIT, CIRCLE-3(3), HYD, HYDERABAD

ITA 1349/HYD/2015Status: DisposedITAT Hyderabad28 March 2018AY 2006-075 pages

AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that it cannot take back the benefit granted to the assessee by the AO, following a Supreme Court decision. The Tribunal modified its earlier order to restrict the consequential assessed income to the income assessed by the AO under Section 143(3).

What were the facts?

The assessee's earlier appeals were set aside by the ITAT for de novo assessment. The Assessing Officer (AO) passed a consequential order, enhancing the assessee's income. The assessee filed Miscellaneous Applications seeking rectification of the ITAT's order, arguing that the benefit granted by the AO should not be taken away.

What were the issues?

Whether the Tribunal can enhance the income while giving effect to its own order, thereby taking away a benefit previously granted by the AO. Whether the Tribunal's order can be rectified to ensure the assessee is not worse off after an appeal.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 254

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Mcorp Global P. Ltd. v. CIT
309 ITR 434 · 2009 · SC · Read judgment
56 citing

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”: HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI B. RAMAKOTAIAH

PER Smt. P. MADHAVI DEVI, J.M. :

Brief facts of the case are that assessee (previously known as Kolan Engg. Construction Pvt. Ltd.,) had earlier filed appeals for the AYs.2003-04 to 2006-07 in ITA

ITA. No. 1349/Hyd/2015 :- 2 -: MA Nos. 7, 8 & 9/Hyd/16

Nos. 958/Hyd/2007, 270/Hyd/2009, 560/Hyd/2006 and 1059/Hyd/2008 before the Tribunal and vide the common and consolidated order dt. 21-01-2013, while dealing with the assessee’s ground with regard to estimation of profit on different types of contracts executed by the assessee, has set aside the issue to the file of the Assessing Officer (AO), with a direction to complete the assessment Denovo in respect of all the assessment years before the Tribunal, keeping in view the order passed by the ITAT in the case of M/s. C. Eswara Reddy and Co., in ITA Nos. 668 to 670/Hyd/2009 dt. 31-01-2011, after giving assessee a fair opportunity of hearing. Consequent there to, the AO passed assessment order for the AY. 2006-07 and has arrived at the taxable income at Rs. 1,47,37,230/- as against the income arrived at Rs. 1,16,96,372/- u/s. 143(3) of the Income Tax Act. Aggrieved by the same, assessee preferred an appeal before the CIT(A), who confirmed the order of AO and assessee has come in second appeal before us in ITA No. 1349/Hyd/2015.

Meanwhile, the assessee has also filed Miscellaneous Applications for all the assessment years seeking rectification of the mistakes apparent from record of the direction of the ITAT. The Ld. Counsel for the assessee submitted that the AO, while completing the assessment u/s. 143(3) of the Act had allowed the depreciation after estimation of income which has resulted in net income being arrived at Rs. 1,04,15,255/- and after giving effect to the order of ITAT, the net income has been arrived at Rs.1,47,37,230/-, which, according to him, is nothing but enhancement of income by the ITAT. He submitted

ITA. No. 1349/Hyd/2015 :- 3 -: MA Nos. 7, 8 & 9/Hyd/16

that u/s. 254 of the Act, the Tribunal cannot take away the benefit granted to assessee by the AO. In support of this contention, he placed reliance upon the decision of the Hon'ble Supreme Court of India in the case of MCorp Global (P.) Ltd., Vs. CIT (2009) [309 ITR 434] (SC). Ld. Counsel therefore prayed that the order of the Tribunal dt. 31-01-2011 be rectified and suitable direction may be given.

Ld.DR was also heard.

Having regard to the rival contentions and material on record, we find that the AO has allowed depreciation after arriving at the gross income by estimating the income, but while giving effect to the order of the ITAT, the income of the assessee has got enhanced. The Hon'ble Supreme Court in the case of MCorp Global (P.) Ltd., Vs. CIT (supra) has held that the Tribunal cannot take back the benefit granted to the assessee by the AO. The assessee cannot be worse of by coming in appeal to the Tribunal. Respectfully following the said decision, we modify the order of the Tribunal dt. 31-01-2011 by adding the following sentence to para 7 :

“….The consequential assessed income shall, however, be restricted to the assessed income u/s. 143(3) of the Act…..”

All the Miscellaneous Applications filed by assessee are thus allowed.

In view of the order even dated in Miscellaneous Application No.08/Hyd/2016, the appeal of the assessee

ITA. No. 1349/Hyd/2015 :- 4 -: MA Nos. 7, 8 & 9/Hyd/16

against the consequential order of the AO is set aside to the file of AO for re-computation of income in accordance with the modified order in MA No. 8/Hyd/2016. Therefore, assessee’s appeal in ITA No. 1349/Hyd/2015 is treated as allowed for statistical purposes.

In the result, the Miscellaneous Applications are allowed and the assessee’s appeal is treated as allowed for statistical purposes.

Order pronounced in the open court on 28th March, 2018

Sd/- Sd/- (B. RAMAKOTAIAH) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated 28th March, 2018 TNMM

ITA. No. 1349/Hyd/2015 :- 5 -: MA Nos. 7, 8 & 9/Hyd/16

Copy to :

M/s. Upkar Infra Projects Pvt. Ltd., C/o. S. Rama Rao, Advocate, Flat No. 102, Shriya’s Elegance, 3-6-643, Street No. 9, Himayat Nagar, Hyderabad.

Dy. Commissioner of Income Tax, Circle-3(3), Hyderabad.

Dy. Commissioner of Income Tax, Circle-2(1), Hyderabad.

CIT(A)-5 , Hyderabad.

Pr.CIT-5, Hyderabad.

D.R. ITAT, Hyderabad.

Guard File.

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