Cresent Sea Food, CHENNAI V. ITO Non Corporate Ward 9(1), CHENNAI

ITA 1017/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0053 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 26-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P RAJASEKHARAN
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , . , ! BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1017/CHNY/2018 /ASSESSMENT YEAR: 2013-14 M/S.CRESENT SEA FOOD, NEW NO.24-1, SINGANNA STREET, CHINTADRIPET, CHENNAI-2. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-9(1), CHENNAI. [PAN: AAAFC 4186 B ] ( % /APPELLANT) ( &'% /RESPONDENT) % ( / APPELLANT BY : MR.P.RAJASEKHARAN, CA &'% ( /RESPONDENT BY : MR.CLEMENT RAMESH KUMAR, ADDL.CIT ( /DATE OF HEARING : 25.03.2019 ( /DATE OF PRONOUNCEMENT : 25.03.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-10, CHENNAI, I N ITA NO.28/16- 17/CIT(A)-10 DATED 27.12.2017 FOR THE AY 2013-14. 2. MR. CLEMENT RAMESH KUMAR, ADDL.CIT., REPRESENTED ON BEHALF OF THE REVENUE AND MR. P.RAJASEKHARAN, CA., REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.1017/CHNY/2018 :- 2 -: 3. THE APPEAL FILED BY THE ASSESSEE IS DELAYED BY 0 8 DAYS, FOR WHICH, THE ASSESSEE HAS FILED NECESSARY AFFIDAVIT FOR COND ONATION OF DELAY. THE DELAY HAS BEEN MENTIONED TO BE ON ACCOUNT OF THE CH ANGE OF AUDITOR. THE REASON EXPLAINED BY THE ASSESSEE HAS NOT BEEN SHOWN TO BE FALSE AND THE REVENUE HAS NOT RAISED ANY SERIOUS OBJECTION ON THE SAME. CONSEQUENTLY, THE DELAY IN FILING OF THE APPEAL IS CONDONED AND T HE APPEAL DISPOSED OFF ON MERITS. 4. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE WAS UNABLE TO PROVIDE THE DETAILS OF ITS EXPENDITURE IN THE COURS E OF THE ASSESSMENT NOR BEFORE THE LD.CIT(A). IT WAS A SUBMISSION THAT CON SEQUENTLY, THE AO HAD ESTIMATED THE INCOME OF THE ASSESSEE AT 8% OF TOTAL TRANSACTIONS. IT WAS A SUBMISSION THAT THE ASSESSEE WAS UNABLE TO PRODUC E THE BOOKS OF ACCOUNTS DUE TO LOSS OF THE BOOKS IN THE INCESSANT RAINS AND FLOODS IN THE PREMISES OF THE ASSESSEE DURING AUGUST-SEPTEMBER, 2 015 FLOODS IN CHENNAI. IT WAS SUBMITTED BY THE LD.AR THAT THERE WAS A SURVEY ON THE PREMISES OF THE ASSESSEE ON 08.03.2018 AND THE ASSE SSMENT HAVE BEEN COMPLETED AFTER THE SURVEY ESTIMATING THE GROSS INC OME OF THE ASSESSEE AT 2% OF THE GROSS TURNOVER. THE LD.AR PLACED BEFORE US COPIES OF THE AYS 2014-15, 2015-16 & 2016-17. TO VERIFY THE ASSESSEE S CLAIM OF FLOODS AND DESTRUCTION OF THE BOOKS OF ACCOUNTS, THE REVEN UE WAS DIRECTED TO GET AN INSPECTOR REPORT FROM THE CONCERNED WARD ITO, WH ICH WAS SUBMITTED ON 22.03.2019, WHEREIN, IT HAS BEEN SUBMITTED AS FO LLOWS: ITA NO.1017/CHNY/2018 :- 3 -: PAN: AAAFC 4186 B/NCW-9(1)/ITAT/2018-19 DATED 22.03.2019 TO THE SENIOR AUTHORIZED REPRESENTATIVE-3, ITAT-C BENCH, 2 ND FLOOR, RAJAJI BHAVAN, BESANT NAGAR, CHENNAI-600 090. RESPECTED SIR, SUB: THE ASSESSEES APPEAL BEFORE ITAT IN THE CA SE OF M/S.CRESENT SEA FOOD, NEW NO.24-1, SINGANNA STREET, CHINTADRI PET, CHENNAI 600 002. REF: ITAT APPEAL NO.ITA.1017/2018 DATED 21.03.20 19. PLEASE REFER TO THE ABOVE. THE INSPECTOR WAS DIRECTED TO VISIT THE ASSESSEES PREMISES. AS PER THE INSPECTORS REPORT OBTAINED ON 22.03.2019, THE DET AILS OF THE FACTS AS UNDER: 1. DURING THE SPOT VISIT ON 22.03.2019, AT THE PREMISE S OF THE ASSESSEE ADDRESS AT NEW NO.24-1, SINGANNA STREET, CHINTADRIP ET, CHENNAI-600 002, THE ENTIRE BUSINESS PREMISES WAS INSPECTED AND FOUND THAT ONLY GROUND FLOOR. 2. THE SHOP NEXT TO THE ASSESSEE BUSINESS PREMISES IS A DRY CLEANERS BY NAME SHRI V. KUMAR. ENQUIRES WERE MADE WITH SHRI V. KUMAR. SHRI V. KUMAR HAS STATED THAT WATER ENTERED IN HIS SHOP APP ROXIMATELY 4 FEET AND ALL HIS CLOTHES GOT WET AND DAMAGED. HE ALSO S TATES THAT WATER HAD ENTERED THE ENTIRE SINGANNA STREET. HE FURTHER STA TES THAT THE WATER WAS STAGNANT FOR FOUR DAYS. 3. ANOTHER NEIGHBOUR SHOP MARUTHI INDUSTRIES WHICH IS MOTOR AND TOOLS REPAIR SHOP ENGAGE IN THIS BUSINESS FOR THE PAST 50 YEARS, WAS ENQUIRED AND ENQUIRES REVEAL THAT THE FLOOD WATER HAD STAGNA NT FOR 4 DAYS AND HIS MACHINERIES WAS DAMAGED IN THAT FLOOD WATER DUR ING DECEMBER, 2015. 4. ANOTHER OPPOSITE SHOP, BY NAME SHRI BALAJI AUTO LIN ERS. HE TOO SAID THAT THE WHOLE AREA WAS AFFECTED BADLY BY FLOODS. 5. ENQUIRES IN THIS REGARD WERE MADE AT THE CORPORATIO N OFFICE, DIVISION- 62, WITH THE ASSISTANT-AE-62, DIVISION. THE AE OF THE DIVISION, CONFIRMED THAT THE ENTIRE STREET WAS EFFECTED VERY BADLY BY THE FLOODS AND FLOOD RELIEF AMOUNT WAS DISTRIBUTED TO THE PEOP LE OF THAT AREA. 6. DURING THE SURVEY CONDUCTED ON 08.03.2018, NO SUCH BOOKS OF ACCOUNTS WERE FOUND AT THE ASSESSEE PREMISES UP TO THE ASSES SMENT YEAR 2015- 16, SINCE THESE BOOKS WAS WASHED AWAY IN THE FLOODS . ITA NO.1017/CHNY/2018 :- 4 -: 7. THE SURVEY ASSESSMENT ARE COMPLETED AND THE ASSESSM ENT ORDER COPIES ARE ENCLOSED FOR REFERENCE FOR THE ASST. YEA R 2014-15, 2015-16 AND 2016-17. 8. BASED ON THE ABOVE FACTS, REPORT IS SUBMITTED. YOURS FAITHFULLY, SD/- (P. GANGA) INCOME TAX OFFICER NON-CORPORATE WARD-9(1) CHENNAI THUS, CLEARLY WHAT HAS BEEN STATED BY THE ASSESSEE , HAS BEEN SUBSTANTIATED BY THE REPORT OF THE INSPECTOR. 5. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD.CIT(A) 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 7. WE HAVE CONSIDERED THE REPORT OF THE INCOME TAX OFFICER, NON- CORPORATE WARD-9(1), CHENNAI, DATED 22.03.2019 AS E XTRACTED ABOVE AS ALSO THE ASSESSMENT WHICH HAVE BEEN COMPLETED SUBSE QUENT TO THE SURVEY ON THE PREMISES OF THE ASSESSEE. THE ASSESSMENT CO MPLETED SUBSEQUENT TO THE SURVEY HAS ESTIMATED THE INCOME OF THE ASSES SEE AT 2% ON THE GROSS TURNOVER. CONSIDERING THESE FACTS, WE ARE OF THE VIEW THAT IN THE INTEREST OF NATURAL JUSTICE, WOULD BE SERVED IF THE INCOME OF THE ASSESSEE FOR THIS YEAR IS ALSO ASSESSED AT 2% OF THE GROSS T URNOVER. ACCORDINGLY, ITA NO.1017/CHNY/2018 :- 5 -: THE AO IS DIRECTED TO ASSESS THE INCOME OF THE ASSE SSEE AT 2% OF THE GROSS TURNOVER. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH DAY OF MARCH, 2019 IN CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 25 TH MARCH, 2019. TLN ( &12 32 /COPY TO: 1. % /APPELLANT 4. 4 /CIT 2. &'% /RESPONDENT 5. 2 & /DR 3. 4 ( ) /CIT(A) 6. /GF