SKANDA INFRA PROJECTS,KURNOOL vs. ACIT, CENTRAL CIRCLE - 2(3), HYDERABAD

ITA 525/HYD/2025Status: DisposedITAT Hyderabad20 August 2025AY 2022-23106 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in not allowing the assessee's appeal in its entirety. The Tribunal found that the seized material, consisting of loose sheets, was indeed 'dumb' and lacked corroborative evidence to substantiate the suppressed turnover. The Tribunal agreed with the assessee that the admissions of additional income were general and conditional. Consequently, the Tribunal directed that the income should not be estimated based on the seized material or the admissions. The Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to re-examine the issue of suppressed turnover and undisclosed income based on cogent evidence, if any, available on record, and to pass a fresh assessment order. The Tribunal did not decide the specific profit rates or inflation of expenses as the primary evidence was found lacking.

What were the facts?

This case involves a batch of 30 appeals filed by various assessees and the Revenue against orders of the CIT(A)-12, Hyderabad. The appeals pertain to assessment years 2019-20 to 2022-23. The core of the dispute arises from a search and seizure operation conducted on 05.01.2022 under Section 132 of the Income Tax Act, 1961, in the case of Skandhanshi Group, including M/s Skandhanshi Infra Projects India Private Limited. During the search, loose sheets, electronic data, books, and documents were seized. Statements were recorded under Sections 132(4), 132(1), and 132(1A). The Revenue quantified suppressed sales turnover at Rs.625.95 crores for the group and the group voluntarily admitted additional income of Rs.60 crores across five assessment years. The Assessing Officer issued notices under Section 148.

What were the issues?

1. Whether the CIT(A) erred in partially allowing the assessee's appeal, when the assessee contended that the appeal should have been allowed in its entirety, arguing a lack of evidence in seized material, the unreliable nature of seized documents (non-speaking loose sheets without corroboration), and that the suppressed turnover detection was based on 'dumb' documents. The assessee also argued that any admission of additional income was general and conditional, not based on specific evidence. 2. Whether the CIT(A) erred in holding a net profit rate of 15% as reasonable for undisclosed cash receipts, against the assessee's contention that peculiar facts of the case were ignored. 3. Whether the CIT(A) erred in holding that income should be estimated at 15% of undisclosed cash receipts, as against the 18% estimated by the Assessing Officer (Revenue's contention). 4. Whether the CIT(A) erred in directing the AO not to disturb the profit margin declared on disclosed turnover, despite findings of inflated expenses against disclosed turnover (Revenue's contention). 5. Whether the CIT(A) erred in not upholding the estimation of income at 14% on disclosed receipts when the books were rejected by the AO (Revenue's contention).

Which sections of the Income-tax Act were involved?

Section 132,Section 133A,Section 132(4),Section 132(1),Section 132(1A),Section 148,Section 139

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “B” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER

Sl. No. I.T.A.No. Name of Appellant Name of Respondent A.Y. Appealed against the Order of the CIT(A)-12, Hyderabad Dated 1. 514/Hyd./2025 Skanda Infra Projects India Private Limited, KURNOOL. PIN – 518 002 Andhra Pradesh PAN AAOCS8382G The ACIT, Central Circle 2(3), HYDERABAD. PIN – 500 004 2019-20 26.12.2024 2. 515/Hyd./2025 2020-21 26.12.2024 3. 516/Hyd./2025 2021-22 06.01.2025 4. 517/Hyd./2025 2022-23 26.12.2024 5. 518/Hyd./2025 Skandhanshi Infra Projects India Private Limited, KURNOOL. PIN – 518 002 Andhra Pradesh PAN AAWCS0746E The ACIT, Central Circle 2(3), HYDERABAD. PIN – 500 004 2019-20 26.12.2024 6. 519/Hyd./2025 2020-21 Appeal No.CIT(A), 019-20 dated NIL 7. 520/Hyd./2025 2021-22 Dated 26.12.2024 8. 521/Hyd./2025 2022-23 26.12.2024 9. 308/Hyd./2025 The ACIT, Central Circle-2(3), HYDERABAD. PIN – 500 004 Skandhanshi Infra Projects India Private Limited, KURNOOL. PIN – 518 002 Andhra Pradesh PAN AAWCS0746E 2019-20 26.12.2024 10. 309/Hyd./2025 2020-21 Appeal No.CIT(A), 019-20 dated NI

The order continues below.

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