आयकर अपीलीय न्यायाधिकरण में , हैदराबाद ‘ए’ बेंच , हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad , , श्री मंजूनाथ जी माननीय लेखा सदस्य एवं श्री रवीश सूद माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.544/Hyd/2024 (निर्धारण वर्ा/ Assessment Year: 2018-19)

SLR Infrastructure Private Vs. The Deputy Commissioner of Limited, Hyderabad. Income Tax, Circle 3(1), Hyderabad.

PAN : AAJCS5863K (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

करदाता का प्रतततितित्व/ : Shri A. Srinivas, Advocate.

Assessee Represented by राजस्व का प्रतततितित्व/ : Ms. U. Mini Chandran –

Department Represented by CIT-DR सुिवाई समाप्त होिे की ततति/ : 10.09.2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 17.10.2025 Date of Pronouncement

O R D E R

PER MANJUNATHA G., A.M :

This appeal filed by the assessee is directed against the order of the Principal Commissioner of Income Tax, Hyderabad - 1, dated 25.03.2024 passed under Section 263 of the Income Tax Act, 1961 (for short “the Act”) and pertains to the assessment year

2018-19.

2. The brief facts of the case are that, the assessee company is engaged in the business of civil contracts in infrastructure sector such as irrigation projects, filed its return of income for AY 2018- 19 on 15-10-2018 declaring a total income of Rs. 2,28,44,290/-. The case has been selected for scrutiny for verification of genuineness of expenses and the assessment has been completed under Section 143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act, 1961 on 09-04-2021 and accepted the income returned by the assessee.

3. The case has been, subsequently taken up for revision proceedings. A Show-Cause Notice under Section 263 of the Act, dated 21-04-2024 was issued and served on the assessee. The Ld. Pr. CIT in the said show-cause notice called upon the assessee to explain as to why the assessment order passed by the A.O. under Section 143(3) read with Section 143(3A) and 143(3B) on 09-04- 2021 shall not be revised in terms of Section 263 of the Act, because the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue on the issue of genuineness of expenditure incurred by the assessee. In the said show-cause notice, the Ld. Pr. CIT observed that, although the case was selected for scrutiny to verify genuineness of expenditure, but the A.O. completed the assessment without carrying out required enquiries, he ought to have been carried out in light of provisions of Section 263 of the Act, in respect of sub- contract expenditure paid to Malreddy Dharma Reddy and Venkat Rami Reddy Nimmanpalli, which is evident from the material available on record where it is clearly established that although the above two parties have not filed return of income to prove the genuineness of the payment made by the assessee, but the A.O. has allowed deduction towards sub-contract payment made to the above parties. Therefore, opined that, the assessment order passed by the A.O. is erroneous insofar as it is prejudicial to the interest of the revenue.

4. In response to the show-cause notice issued by the Ld. Pr. CIT, the assessee submitted that the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interest of revenue because, the A.O. has verified the issue of sub-contract payments made to the above two parties by issuing a specific show cause notice under Section 142(1), dated 09-01-2020, where the A.O. has called for specific details of sub-contract payments made by the assessee and consequent TDS deduction under Section 194C of the Act. The assessee, in response to the notice issued by the A.O., has furnished all the details, including bills and vouchers submitted by the sub-contractors, payments made to them through banking channels, and TDS deducted on the said payments. The A.O., after considering relevant facts, has rightly accepted the genuineness of the paym