TMI Blog2018 (3) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... herein, merely because the income was determined on estimate basis, by rejecting such books of accounts. See Indwell Constructions Versus CIT [1998 (3) TMI 121 - ANDHRA PRADESH High Court] - Decided in favour of assessee - ITA No. 204/VIZ/2015, C.O.No. 03/VIZ/2018 And ITA No.255/VIZ/2015 - - - Dated:- 7-3-2018 - SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, HON BLE ACCOUNTANT MEMBER For The Assessee : Shri C. Subrahmanyam FCA. For The Department : Shri M.R. Bangari Sr. DR ORDER PER V. DURGA RAO, JUDICIAL MEMBER These cross appeals by the Revenue and the assessee are directed against the order of Commissioner of Income Tax (Appeals), Vijayawada, dated 30/03/2015 for the Assessment Years 2011-12. C.O.No. 03/VIZ/2018 is filed by the assessee in ITA No. 204/VIZ/2015. ITA No. 204/VIZ/2015 2. Facts of the case, in brief, are that the assessee is an individual, deriving income from construction and sale of apartments and house property, filed his return of income by admitting total income of ₹ 36,610/-. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 (herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file details and on verification of the same, the Assessing Officer found that bills / vouchers filed by the assessee are self made and the assessee is not able to substantiate the expenditure claimed by him and therefore, he rejected the books of account and estimated the business profit of the assessee at 12.5%. On appeal, ld. CIT(A) by following the case in assessee itself for the Assessment Year 2010-11, scaled down the estimation from 12.5% to 9%, by observing as under:- 8.1 An identical issue has been decided by me in the case of the appellant for the Asst. Year 2010-11 vide my order in ITA No.46/CIT(A)/ VJA/13-14 dated 29.05.2014. The relevant portion of the order is reproduced as under: The Assessing Officer relied on the case of MIs KNR Constructions, where adopting 12.5% is approved on contract works, where as the appellant during the course of appeal proceedings relied on the decisions of Teja Constructions, Hyderabad vs. ACIT in ITA No.308/HYD/ 2009, dated 23.10.2009, C.Eswara Reddy Co. vs AC1T (ITA No.668/HYD/2009, dated 31.01.2011) and SREC Projects Pvt. Ltd. vs. DCIT (ITA No.974/Hyd/2009), wherein under similar circumstances adopting 8% was considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applies to business income and not to the case of the assessee. The Assessing Officer has considered the explanation of the assessee and noted that as seen from the profit loss account, the assessee offered an amount of ₹ 55,72,000/- on sale of first floor in CVR Chambers. Account copy from India Bulls obtained and it is noted that the assessee has repaid loan amount of ₹ 46,17,322/- towards loan account No.HLAPVJW00042857 in India Bulls. The source for repayment of loan is said to have been taken as advances from Smt. K. Madhavi and Smt. K. Mythri. Thus, the assessee got it back the property pledged to India Bulls and registered on first floor to Smt. K. Madhavi and Smt. K. Mythri on 09/03/2011. From this, it can be construed that the assessee utilized the loan amounts not only to house property but also to business income. The Assessing Officer was of the opinion that the provisions of section 194A clearly applicable to the case of the assessee since assessee failed to deduct TDS on interest payment made to India Bulls, the interest claimed at ₹ 31,00,530/- is disallowed under section 40(a)(ia) of the Act and added to the total income of the assessee. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 24(b) and loan has taken for the business purpose and as per section 194A TDS has to be deducted. As, no TDS is deducted, the entire amount is disallowed under section 40(a)(ia) of the Act. We find that the assessee has not claimed any expenditure in the profit loss account, therefore, the disallowance made by the Assessing Officer under section 40(a)(ia) is not warranted. We find that ld. CIT(A) has rightly directed the Assessing Officer to delete the addition. 17. So far as alternative submission is concerned, once income of the assessee is estimated, no separate addition can be made in respect of interest paid by the assessee. By following the decision of the Hon'ble Jurisdictional High Court in the case of Indwell Constructions (supra), the coordinate bench of the tribunal in the case of N. Nageswara Rao (supra) has held as under:- 6. We have considered the issue and examined the legal position. The coordinate bench in the case of Edco India (P) Ltd.,. vs. DCIT in ITA No. 1058/H/2011 dated 14/09/2011 considered the jurisdictional High Court in the case of Indwell Constructions vs. CIT (supra) to hold that no further addition /disallowance could be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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