Basanthlal Shah, R.R.Dist, Secunderabad V. ITO, Ward-11(1), Hyderabad, Hyderabad

ITA 1/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6466 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: P PRASAD
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P.MADHAVI DEVI, JUDICIAL ME MBER ITA NO.01/HYD/2016 : ASSESSMENT YEARS 2011-12 SHRI BASANTHLAL SHAH, PROP. M/S.BHAVANI INDUSTRIES, QUTUBULLAPUR MANDAL, R.R. DISTRICT (PAN - BEFPS 6699 M ) V/S INCOME TAX OFFICER WARD 11(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.PRASAD RESPONDENT BY : SHRI B.KURMI NAIDU DR DATE OF HEARING 02 . 6 .201 6 DATE OF PRONOUNCEMENT 10.6.2016 O R D E R THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2011-12. IN THIS APPEAL, ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE ESTIMATION OF INCOME AT THE RATE OF 6%OF THE TURNOVER; AND AT 15.07% OF THE CREDITS APPEARING IN THE SAVIN GS BANK ACCOUNT OF THE ASSESSEE AGGREGATING TO OF RS.83,73,L150 AT 15. 07% AND ALSO IN CONFIRMING THE ADDITION OF RS.15 LAKHS, WHICH ACCOR DING TO THE ASSESSEE IS TRADE ADVANCE RECEIVED FROM CUSTOMERS. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE, AN I NDIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURE OF NON-FERRO US AND CHEMICALS FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 4.10.2011 ADMITTING AN INCOME OF RS.4,85,840. THE C ASE WAS SELECTED FOR SCRUTINY UNDER CASS TO EXAMINE THE SOURCES OF C ASH DEPOSITS IN SAVINGS BANK ACCOUNT. THE ASSESSEE WAS SERVED WIT H THE NOTICES UNDER S.143(2) AND S.142(1) OF THE ACT. IN RESPONSE , THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND HE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT RELATING TO THE BUSINESS OF TH E ASSESSEE, SOURCES ITA NO 01/HYD/2016 SHRI BASANTHLAL SHAH, PROP. OF M/S.BHAVANI INDUSTRIES, QUTUBULLAPUR MANDAL, R.R. DISTRI CT 2 OF CASH DEPOSITS AND DETAILS OF ADVANCES FROM CUSTO MERS APPEARING IN BALANCE SHEET. HOWEVER, DURING THE ASSESSMENT PROC EEDINGS, THE ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS AND T HEREFORE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER S .144 OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS THE PROPRIETOR OF M/S. BHAVANI INDUSTRIES AND IS ENGAGED IN THE BUSIN ESS OF MANUFACTURE OF NON-FERROUS AND CHEMICALS AND FROM THE PROFIT & LOSS ACCOUNT, IT IS SEEN THAT THE ASSESSEE HAS SHOWN SALES OF RS.1,62,0 9,766 AND JOB WORK RECEIPTS OF RS.3,25,836 FOR THE RELEVANT FINAN CIAL YEAR. HE OBSERVED THAT IN THE BALANCE SHEET THE ASSESSEE HAS SHOWN RS.15- LAKHS AS ADVANCE FROM CUSTOMERS, BUT THE ASSESSEE H AS NOT FURNISHED THE BOOKS OF ACCOUNT TO SHOW THAT THE INCOME ADMITT ED IN THE RETURN OF INCOME IS IN TRUE AD CORRECT. HE THEREFORE, ESTIMAT ED THE INCOME AT 6% OF THE TURNOVER AND BROUGHT IT TO TAX. SIMILARLY, HE ALSO BROUGHT TO TAX THE A SUM OF RS.15 LAKHS SHOWN AS ADVANCE FROM CUST OMERS, SINCE THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE WITH REGARD TO THE SAME. FURTHER, FROM THE AIR INFORMATION, THE ASSESSING OF FICER OBSERVED THAT THERE WERE HUGE CASH DEPOSITS TO THE TUNE OF RS.82, 73,150 IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE. OBSERVING THA T THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF THESE CASH DEPOSI TS, HE TREATED 15.07% OF THESE DEPOSITS AS INCOME OF THE ASSESSEE AND ACCORDINGLY BROUGHT THAT AMOUNT ALSO TO TAX. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFOR E THE CIT(A) ALONGWITH THE EXTRACTS OF THE COMPUTERISED STATEME NTS OF ACCOUNT AND PRAYED THAT THEY MAY BE ADMITTED UNDER RULE 46A OF THE IT RULES AND CONSIDERED FOR ADJUDICATION OF THE MERITS OF THE AD DITION. THE CIT(A), HOWEVER, REFUSED TO ADMIT THE ADDITIONAL EVIDENCE, AND CONFIRMED THE ADDITIONS MADE IN THE ASSESSMENT ORDER. ITA NO 01/HYD/2016 SHRI BASANTHLAL SHAH, PROP. OF M/S.BHAVANI INDUSTRIES, QUTUBULLAPUR MANDAL, R.R. DISTRI CT 3 4. AGGRIEVED, ASSESSEE IS IN FURTHER APPEAL BEFOR E US. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT BEF ORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS, AS THE B OOKS WERE WITH THE PART-TIME ACCOUNTANT, WHO WAS NOT IN STATION WHEN T HE NOTICES WERE ISSUED BY THE DEPARTMENT, AS HE HAS GONE ON A PILGR IMAGE. HE SUBMITTED THAT ASSOON AS THE RELEVANT BOOKS WERE AV AILABLE, THE ASSESSEE HAD FILED THE SAME BEFORE THE CIT(A), WHO REFUSED TO ADMIT THE SAME. HE SUBMITTED THAT THE CIT(A) HAD THE POW ER TO ADMIT THE ADDITIONAL EVIDENCE FILED BEFORE HIM, IF SUCH EVIDE NCE GOES TO THE ROOT OF THE MATTER AND THE CIT(A) HAS ERRONEOUSLY REFUSE D TO ADMIT THE SAME, THOUGH ASSESSEE IS ABLE TO SUBSTANTIATE ITS C LAIM WITH RELEVANT MATERIAL. LEARNED COUNSEL FOR THE ASSESSEE, THEREFO RE, PRAYED THAT THE ADDITIONAL EVIDENCE BE ADMITTED AND REMANDED TO THE ASSESSING OFFICER FOR DE-NOVO CONSIDERATION IN THE INTERESTS OF JUST ICE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEV ER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSMENT IN THIS CASE W AS COMPLETED EX- PARTE UNDER S.144 OF THE ACT FOR NON-PRODUCTION OF BOOKS OF ACCOUNT. THE ASSESSEE HAS FILED THE RELEVANT DETAILS BEFORE THE CIT(A), WHO HAS REFUSED TO ADMIT THE SAME. IN THE INTERESTS OF JUS TICE AND CONSIDERING THE REASONS EXPLAINED FOR NON-PRODUCTION OF BOOKS O F ACCOUNT BEFORE THE ASSESSING OFFICER, WE DEEM IT FIT AND PROPER TO ADMIT THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A), AND ALSO B EFORE US, AND REMAND THE MATTER TO THE FILE OF THE ASSESSING OFFI CER FOR DE-NOVO CONSIDERATION IN ACCORDANCE WITH LAW AD AFTER GIVIN G REASONABLE ITA NO 01/HYD/2016 SHRI BASANTHLAL SHAH, PROP. OF M/S.BHAVANI INDUSTRIES, QUTUBULLAPUR MANDAL, R.R. DISTRI CT 4 OPPORTUNITY OF HEARING TO THE ASSESSEE. WE DO SO A CCORDINGLY, AND DIRECT ASSESSEE ALSO TO COOPERATE WITH THE ASSESSIN G OFFICER IN EARLY COMPLETION OF ASSESSMENT . 8. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE COURT ON 10 TH OF JUNE, 2016 SD/- (P.MADHAVI DEVI) JUDICIAL MEMBER DT/- 10 TH JUNE, 2016 COPY FORWARDED TO: 1. SHRI BASANTHLAL SHAH, PROP. M/S.BHAVANI INDUSTRIES, C/O. M/S. SHARMA & SASTRY, CAHRETRED ACCOUTNATNS, NO.5-3-318/ 1, JEERA, M.G. ROAD, SECUNDERABAD. 2. INCOME TAX OFFICER WARD 11 ( 1 ), HYDERABAD 3. 4. COMMISSIONER OF INCOME-TAX(APPEALS)-5, HYDERABAD PR. COMMISSIONER OF INCOME-TAX 5 HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.