2016 (2) TMI 124

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....her bad in law as reasons for issuance of such notice u/s.153C of the I.T.Act have not been given and the appellant has reasons to believe that the same has not been recorded and that the mandatory conditions to assume jurisdiction is to record reasons and in the absence of the same, the assessment is bad in law and liable to be cancelled. 4. Without prejudice to the above, the order of assessment passed u/s.153C of the Act is barred by limitation in as much as, the assessment ought to have been completed on or before 31/12/2008 in terms of the provisions of section 153B of the Act and the assessments having been completed on 31/12/2009 and hence, suffers from limitation and accordingly, the assessment requires to be annulled. 5. Without prejudice to the above, the learned authorities below are not justified in treating the income returned by the appellant under the head "Business" as income from "Other Sources" in view of certain findings in support of the same, which are all arbitrary, purely on conjectures, suspicion and surmise, presumptions and assumptions and hence bad in law under the facts and circumstances of the appellant's case. 6. For the above and other gr....

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....er it even in the absence of a specific ground. For this reliance was placed on the jurisdictional High Court judgment in the case of Sankeshwar Printers P. Ltd v. DCIT [(2013) 218 Taxman 360]. 05. Continuing his argument on merits, Ld. AR submitted that the assessee was aggrieved on the directions of the CIT (A) by which he shifted the income returned by the assessee from the head income from business' to 'income from other sources'. As per the Ld. AR assessee had returned income at the rate of 8% of gross contract receipts at Rs. 39,80,000/- relying on Section 44AD of the Act. Ld. AR submitted that these receipts were from M/s. Shyamaraju & Co., and TDS were duly deducted by M/s. Shyamaraju & Co. India Ltd. As per the Ld. AR, AO had placed reliance on a statement of Shri. P. Shyamaraju, General Manager (Finance) of M/s. Shyamaraju & Co. India P. Ltd, for coming to a conclusion that the transactions of contract work was only a make-believe one. As per the Ld. AR, assessee had produced bills for work. Just for a reason that work plan certificate and vouchers were not produced, its head of income could not have been shifted. Ld. AR submitted that AO placed undue reliance on the wit....

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....ly taken by the Ld. AR, what I find is that a legal ground can be raised before the Tribunal though it is not appearing in the appeal memo, as held by the Hon'ble Karnataka High Court in the case of Sankeshwar Printers P. Ltd (supra). Case of the assessee is that notice u/s.142(1) of the Act, placed by it at paper book page 6 was issued by the ACIT, Central Circle -2(2), Bangalore and received by assessee on 02.07.2008. Notification transferring the assessment jurisdiction of the assessee from ITO, Ward -1(1) to ACIT, Central Circle - 2(2) placed at paper book page 61, was issued by CIT, Bangalore -I on 24.06.2008 and this was to take effect from 01.07.2008. Thus as on the date when assessee received the notice u/s.142(1) of the Act, ACIT, Central Circle -2(2) was having jurisdiction. In any case, I find that there was a subsequent notice dt.30.01.2009 issued by the very same officer. Just because assessment order referred to an earlier notice would not in my opinion, be a reason to say that assessment was invalid. Hence, I dismiss this ground taken by the assessee. 10. Coming to the merits of the issue, what I find is that assessee had filed its return u/s.44AD of the Act, which ....

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....otal income or loss of the assessee and determine the sum payable by the assessee on the basis of assessment made under sub-section (3) of section 143. (6) Notwithstanding anything contained in the foregoing provisions of this section, an assessee may claim lower profits and gains than the profits and gains specified in sub-section (1), if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB. Explanation : For the purposes of this section, the expression "civil construction" includes- (a) the construction or repair of any building, bridge, dam or other structure or of any canal or road; (b) the execution of any works contract." 11. Reading of the above section clearly indicate that it is applicable only to an assessee who is engaged in the business of civil construction for supply of labour for civil construction. As per the AO assessee was not doing any of this type of work. Assessee had produced before the AO a work order dt.02.01.2006 issued by M/s. Shyamaraju & Co. India P. Ltd, copy of which has been place....