Dy. Commissioner of Income Tax , Circle-11(1), Hyderabad V. Raasi Associates , Hyderabad

ITA 1046/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7840 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 22-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR PANDEY
• Section: 133A

Judgement Text

ITA NO 1046 OF 2018 RASI ASSOCIATES HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO.1046/HYD/2018 ASSESSMENT YEAR: 2013-14 DY. COMMISSIONER OF INCOME TAX, CIRCLE 11(1) HYDERABAD VS. M/S.RAASI ASSOCIATES, HYDERABAD PAN:AAJFR7212A (APPELLANT) (RESPONDENT) REVENUE BY SRI SUNIL KUMAR PANDEY, DR ASSESSEE BY SRI K.C. DEVDAS DATE OF HEARING: 13/01/2021 DATE OF PRONOUNCEMENT: 20/01/2021 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2013-14 AGAINS T THE ORDER OF THE CIT (A)-5, HYDERABAD, DATED 12.03. 2018. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM WHICH IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF LANDS AND CONSTRUCTION OF RESIDENTIAL FLATS WITH THE NAME AND STYLE AS M/S. RAASI ASSOCIATES, HYDERABAD. IT FILED ITS RETURN OF INCOME FOR THE A.Y 2013-14 ON 29.09.2013 ADMITTING TOTAL INCOME OF RS.2,55,89,610/-. THERE WAS A SURVEY OPERATION U/S 133A ON 24.1.2013 AND DURING THE COURSE OF SURVEY, THE MANA GING PARTNER OF THE ASSESSEE FIRM APPEARED AND IN HIS RECORDED S TATEMENT, HE AGREED TO OFFER THE PROFIT @RS.400 TO 500/- PER SQ. FT. HOWEVER, WHILE FILING THE RETURN OF INCOME FOR THE RELEVANT, A.Y, THE ASSESSEE ITA NO 1046 OF 2018 RASI ASSOCIATES HYDERABAD PAGE 2 OF 5 DID NOT OFFER ANY ADDITIONAL INCOME. THEREFORE, THE DIFFERENCE OF THE UNDISCLOSED PROFIT OF RS.2,14,30,388/- WAS BROU GHT TO TAX. THE AO OBSERVED THAT AS PER THE DECLARATION GIVEN B Y THE ASSESSEES MANAGING PARTNER, THE PROFIT OF THE FIRM SHOULD BE AT RS.4,70,20,000/- AS AGAINST THE PROFIT DECLARED IN THE RETURN OF INCOME FILED FOR THE A.Y 2013-14 AT RS.2,55,89,612/ -. THEREFORE, THE DIFFERENCE OF RS.2,14,30,388/- WAS TREATED AS F IRMS INCOME AND ACCORDINGLY BROUGHT TO TAX. 3. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE CIT (A) WHO DELETED THE ADDITION AND AGGRIEVED BY T HE RELIEF GRANTED BY THE CIT (A), THE REVENUE IS IN APPEAL BE FORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE ADDITIO N MADE BY THE ASSESSING OFFICER IGNORING THE FACT THAT THE AS SESSEE HAS CATEGORICALLY STATED IN HIS STATEMENT DURING THE CO URSE OF SURVEY PROCEEDINGS THAT THE ESTIMATED PROFIT FOR TH E YEAR UNDER CONSIDERATION WOULD BE AROUND RS.400/- TO RS. 500/- PER SQ. FT AND ACCORDINGLY AGREED TO DECLARE THE PR OFIT. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE CONFIRMED THE SAID STATEMENT IN THE STATEM ENT RECORDED DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAS RETRACTED FROM THE STATEMENT GIVEN DUR ING THE COURSE OF SURVEY AS WELL AS SCRUTINY ASSESSMENT PROCEEDINGS. 5. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE MANAGING PARTNER ALONG WITH OTHER PARTNERS HAVE GIV EN AFFIDAVIT CONFIRMING THE PROFIT AT RS.500/- PER SQ. FT FOR THE YEAR UNDER CONSIDERATION. 6. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE PROFIT DECLARED DURING THE PREVIOUS YEAR LE. FOR TH E ASSESSMENT YEAR 2012-13 WAS RS.500J- PER SQ. FT AND THE PROFIT DECLARED FOR THE ASSESSMENT YEAR 2013-14 IS ALSO PERTAINING TO THE SAME PROJECT. ITA NO 1046 OF 2018 RASI ASSOCIATES HYDERABAD PAGE 3 OF 5 7. ANY OTHER GROUND(S) THAT MAY BE URGED AT THE TIM E OF HEARING. 4. THE LEARNED DR SUPPORTED THE ORDERS OF THE AO AN D SUBMITTED THAT THE MANAGING PARTNER OF THE ASSESSEE FIRM HIMSELF HAS OFFERED TO ADMIT ADDITIONAL INCOME DURING THE C OURSE OF SURVEY BUT DID NOT OFFER THE SAME IN THE RETURN OF INCOME AND THE DIFFERENCE HAS RIGHTLY BEEN BROUGHT TO TAX AND THE CIT (A), WITHOUT PROPER VERIFICATION HAS GRANTED RELIEF TO THE ASSES SEE. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, SUPPORTED THE ORDERS OF THE CIT (A) AND SUBMI TTED THAT THE STATEMENT OF THE MANAGING PARTNER OF THE ASSESSEE, TO DECLARE PROFIT @ RS.400/- TO RS.500/- PER SQ. FT, WAS ONLY FOR THE A.Y 2012-13 AND WAS NOT FOR THE RELEVANT A.Y AND THEREF ORE, THE CIT(A) HAS RIGHTLY APPRECIATED THE SAID FACT FOR DELETING THE ADDITION. HE FURTHER SUBMITTED THAT THERE WAS NO MATERIAL WHATSO EVER WHICH WAS FOUND DURING THE COURSE OF SURVEY TO SUPPORT TH E STATEMENT GIVEN BY THE MANAGING PARTNER AND FOR THIS REASON A LSO, THE ADDITION IS NOT SUSTAINABLE AND THE CIT (A) HAS RIG HTLY DELETED THE ADDITION. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT DURING THE SURVEY PROCEEDIN GS, IN ANSWER AT QUESTION NO.18, THE ASSESSEE HAD AGREED TO ADMIT A SUM OF RS.500/- SQ. FT PROSPECTIVELY OVER AND ABOVE WHAT H AS BEEN ADMITTED IN THE RETURN OF INCOME BY THE ASSESSEE FO R THE A.Y 2012-13. THIS FACT HAS BEEN CONSIDERED BY THE CIT ( A) AT PAGE 34 OF HIS ORDER AND FOR THE SAKE OF READY REFERENCE, T HE SAME IS REPRODUCED HERE UNDER: ITA NO 1046 OF 2018 RASI ASSOCIATES HYDERABAD PAGE 4 OF 5 IT IS SEEN IN THE ASSESSMENT ORDER NO DEFECTS HAS BEEN BROUGHT OUT NOR ANY INCRIMINATING MATERIAL EXISTS. THEREFORE, THE ADDITION IS JUST BEEN MADE ON THE BA SIS OF A STATEMENT CANNOT BE QUANTIFIED FOR ASCERTAINING THE TRUE AND CORRECT INCOME OF THE APPELLANT. IN THE SUBMISS ION MADE BY THE APPELLANT, THE APPELLANT HAS STATED THA T THE BOOKS OF ACCOUNTS WERE AUDITED AND ON THE BASIS OF THE SAME THE RETURN WAS FILED. THE APPELLANT HAS STATED AS UNDER: I. THE BOOKS OF ACCOUNTS WERE AUDITED BASED ON BILL S AND VOUCHERS II. DURING THE COURSE OF SURVEY NO INCRIMINATING MA TERIAL ESTABLISHING TAX EVASION WAS FOUND III. NO MATERIAL WAS FOUND INDICATING THAT THE PROF IT EARNED BY THE APPELLANT WAS AT RS. 500 PER SQ. FT. IV. THE AO DID NOT DISPUTE THE RECEIPTS OR EXPENDIT URE OF THE APPELLANT V. THERE IS NO EVIDENCE WITH THE DEPARTMENT TO INDI CATE THE PROFIT AT 500 RS. PER SQ. FT. VI. THE BOOKS OF ACCOUNTS BILLS VOUCHERS AS REQUIRE D BY THE AO WERE PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND DEFICIENCY WAS POINTED OUT. THE ABOVE SUBMISSIONS AND CONTENTIONS OF THE APPELL ANT ARE A MATTER OF FACT AND CAN BE SEEN THAT THESE FAC TS FLOW FROM THE ASSESSMENT ORDERS. THE APPELLANT HAS FURTH ER STATED THAT A STATEMENT MADE BY THE APPELLANT CAN B E AN INDICATIVE EVIDENCE AND NOT A CONCLUSION EVIDENCE, THE SAME IS ACCEPTABLE ESPECIALLY IN THE PRESENT CASE, WHEREIN THE APPELLANT'S PARTNER DID NOT HAVE THE BENEFIT OF THE BOOKS OF ACCOUNTS BEFORE MAKING SUCH STATEMENTS. THE APPELLANT HAS CITED VARIOUS CASE LAWS WHICH ARE IN RELATION TO THE ISSUE AND IN VIEW OF THE SAME AND T HE PECULIAR FACTS OF THE CASE IT IS HELD THAT THE ABOV E STATEMENT IS NOT A CONCLUSIVE EVIDENCE TO COME TO A CONCLUSION OF THE PROFIT OF THE APPELLANT AS IT IS DEVOID OF MERIT, EVIDENCE AND MATERIAL. THUS THERE NO CORROBO RATIVE EVIDENCE TO INDICATE SUCH CONCLUSION BY THE ASSESSI NG OFFICER. FURTHER THE PROFIT EVEN MENTIONED WAS A GE NERAL FIGURE THAT WAS 400 TO 500 RS. PER SQ. FT THIS KIND OF GENERAL FIGURE HAS NO BASIS WHATSOEVER, ESPECIALLY ONCE THE BOOKS OF ACCOUNTS ARE FAIR. THE ONLY ISSUE WHICH NEEDS ATTENTION IS THAT THE AP PELLANT HAS ADMITTED A PROFIT OF RS. 500 PER SQ. FT IN THE PRECEDING YEAR UNDER CONSIDERATION ON AN AGREED BASIS. THE AGREEMENT MADE BY THE APPELLANT IN THE PRECEDING YE AR ITA NO 1046 OF 2018 RASI ASSOCIATES HYDERABAD PAGE 5 OF 5 WAS AS PER THE DISCUSSION BETWEEN THE AO AND THE APPELLANT IN THE PRECEDING YEAR. IN VIEW OF THE SAME THE ABOVE ADDITION IS NOT SUSTA INABLE BEING DEVOID OF MERIT, EVIDENCE IN RELATION TO THE PRESENT YEAR UNDER CONSIDERATION. THE RELIEF FOR THE YEAR U NDER CONSIDERATION, DOES NOT GIVE ANY IMMUNITY OR THE CH ANGE OF STAND BY THE APPELLATE AUTHORITY FOR A.Y. 2011-12 A S IN THAT YEAR THE APPELLANT AGREED FOR THE ADDITION AND THUS PREVENTING THE ASSESSING OFFICER TO MAKE ENQUIRIES OR INVESTIGATE AS THE INCOME DECLARED BY THE APPELLANT WAS TO THE SATISFACTION OF THE ASSESSING OFFICER IN THAT R ELEVANT YEAR AND PROCEEDINGS. THE SAME IS NOT THE SITUATION IN THE PRESENT CASE UNDER CONSIDERATION, THEREFORE, THE OBSERVATIONS MADE ARE LIMITED TO THE YEAR UNDER CONSIDERATION AND THE FACTS AND THE CIRCUMSTANCES O F THE RELEVANT YEAR. THEREFORE, THE APPELLANT GETS RELIEF ON THE SAID GR OUND ACCORDINGLY. IN VIEW OF THE SAME THE GROUND NOS. 2, 3 & 4 ARE ALLOWED ACCORDINGLY AND THE ADDITION OF RS. 2,14,30,388/- IS HEREBY DELETED. GROUND NOS. 1 & 5 BEING GENERAL, NEEDS NO ADJUDICATION. 7. SINCE THE LEARNED DR HAS NOT BEEN ABLE TO REBUT THESE FINDINGS OF THE LEARNED CIT (A) WITH ANY FACTS TO T HE CONTRARY, WE DO NOT SEE ANY REASON TO TAKE ANY OTHER VIEW. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2021. SD/- SD/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 20 TH JANUARY, 2021. VINODAN/SPS COPY TO: 1 DY.CIT, CIRCLE 11(1) ROOM NO.1012, 10 TH FLOOR, SIGNATURE TOWERS, OPP: BOTANICAL GARDEN, KONDAPUR ROAD, HYDERABAD 500 084 2 M/S. RAASI ASSOCIATES,PLOT NO.67, SRI SAI SADAN A PARTMENTS, BHAGYA NAGAR COLONY, OPP: KPHB COLONY, HYDERABAD 50 0072 3 CIT (A)-5 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER