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TMI Blog2016 (10) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... onstructions, Secunderabad, [2014 (1) TMI 832 - ITAT HYDERABAD] has been consistently holding that depreciation being an allowable deduction under S.32 of the Act, and since all out goings falling under S.30 to 38 are deemed to have been allowed while estimating the income, no separate deduction is allowable in respect of the same out of the estimated income in this respect. Depreciation should be excluded but the interest and remuneration to working partners are allowable as deduction as it does not fall under section 30 to 38 of the Act. Accordingly, Assessing Officer is directed to estimate the income @ 11% on gross receipts and to give deduction of interest and remuneration to partners. - ITA Nos. 1724 & 1725/Hyd/2013 - - - Dated:- 26-8-2016 - SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Assessee : Shri A.V. Raghuram For Revenue : Shri A. Sitarama Rao ORDER PER S. RIFAUR RAHMAN, A.M.: Both these appeals are preferred by the assessee against a common order of the learned Commissioner of Income-tax(A) - IV, Hyderabad for AYs 2004-05 and 2005-06. 2. Briefly the facts of the case are that the assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material which was purchased from shops was supported by bills whereas expenditure on items like sand, brick, metal, labour etc., was supported by self-made vouchers and the Assessing Officer's objection to such self-made vouchers was without basis. The AR also submitted that the expenditure on such items was not very high, that the estimation of income at 15% was on the higher side for the assessee's line of business, that rejection of books for this reason was unjustified and that the Assessing Officer had not considered the remuneration paid to Directors and interest on capital/unsecured loans of the shareholders. The AR further submitted that assessment in the assessee's case had similarly been made for AY 2002-03 estimating the income at 15% of the gross receipts, and that the CIT(A) vide his order in ITA No. 128/CC-4, Hyd/CIT(A)-I/05-06, dated 7.2.2006 had given directions which were relevant for the AY 2004-05 as well. The AR also submitted a statement with regard to the details of the projects for the AY 2002-03 to AY 2005-06 on percentage completion basis in accordance with the directions of the CIT(A) in his order for AY 2002-03. 5. For the AY 2002-03, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 Gross profit to be recognized (Rs. In lakhs) 0.67 6.85 7.33 3.89 18.74 05( c) The Assessing Officer is directed to compute the gross profit of A Y 2002-03 at ₹ 6,85,000. The miscellaneous receipts of ₹ 35,106 shown by the assessee is to be further added before allowing the overhead expenses to determine the net profit. The Assessing Officer is also directed to give consequential relief to the assessee in AY 2003-04 and AY 2004- 05. 6. The CIT(A) noted that the Banjara Hills project was completed during the AY 2004-05. Respectfully following the directions of the CIT(A) in his order for AY 2002-03, the CIT(A) directed the Assessing Officer to estimate the profit from the Banjara Hills project for the AY 2004-05 at ₹ 3.89 lakhs. 7. The CIT(A) observed that however, the factors that prompted the CIT(A) to accept the gross profit declared by the assessee do not apply to the years now in appeal. CIT(A) found that while the G.P. declared by the assessee for the Banjara Hills project as a whole was 12.66%, the assessee has declared GP of 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42 47.53 140.31 90.00 295.26 Income on the basis of % of work done 2.18 5.94 17.54 11.25 36.91 10. The CIT(A) directed the Assessing Officer to compute the profits from these projects for the AYs 2004-05 and 2005-06 accordingly. The miscellaneous receipts, if any, are to be further added before arriving at the total income. The Assessing Officer was also directed to give consequential effect to the assessee's income from the two projects in question viz. Gandhi Nagar Project and L.B. Nagar Project(Block-A) for the AY 2006-07 and 2007-08. 11. Aggrieved by the order of the CIT(A), the assessee is in appeal before us raising the following grounds of appeal, which are common in both the appeals under consideration: 1. The Ld. CIT(A) did not fully followed the previous order of the CIT(A) given for the Ay.2002-03 to Ay.2003-04. 2. The Ld. CIT(A) estimated the appellants income at 12.5% of the gross receipts, net of all deductions which is not fair. 3. The directions given in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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