R.Panner Selvam, CHENNAI V. ACIT, CHENNAI

ITA 1077/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8901 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 30-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 28-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Assessee Lawyers: S SRIDHAR
• Section: 133A; 148; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1077/MDS/2014 ( / ASSESSMENT YEAR: 2004-05) MR. R.PANNER SELVAM, 43, SARANGAPANI STREET, T.NAGAR, CHENNAI-600 017. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-II CHENNAI - 34. PAN:AAGPP5343K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. G.JOHNSON, JCIT /DATE OF HEARING : 30 TH MAY, 2016 /DATE OF PRONOUNCEMENT : 1 ST AUGUST, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX, AP PEALS (CENTRAL)-I, CHENNAI DATED 30.01.2014 IN ITA NO.172 /2013-14 PASSED UNDER SECTION 144 & 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER AT THE TIME OF HEARING THE ONLY GROUND RAIS ED BY THE LEARNED AUTHORIZED REPRESENTATIVE BEFORE US IS AS F OLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN RESTRICTING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER TOWARDS SUPPRESSION OF SALES FROM 56.33% TO 30%. 2 ITA NO.1077/MDS/2014 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE ASSE SSMENT YEAR 2004-05 ON 06.02.2006 ADMITTING INCOME OF `31,02,12 0/- AND AGRICULTURAL INCOME OF RS.1,95,000/-. A SURVEY UNDE R SECTION 133A WAS CONDUCTED ON 27.02.2008 IN THE BUSINESS PR EMISES OF THE ASSESSEE AND ALSO THE GROUP COMPANIES. SUBSEQUENTLY, NOTICE UNDER SECTION 148 WAS ISSUED O N 30.03.2011 AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 R.W.S.143 (3) & 147 OF THE ACT ON 30.12 .2011 WHEREIN CERTAIN ADDITIONS WERE MADE AMONGST WHICH O NE OF THE ADDITIONS RELATES TO INCOME ARISING OUT OF SUPP RESSION OF SALE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSE E HAD SUPPRESSED SALES RELATED TO SALE OF LIQUOR IN THE R OHINI INTERNATIONAL BAR PERMIT ROOM AT 67, G.N.SHETTY ROA D, T.NAGAR, CHENNAI-600 017.THEREAFTER, THE LEARNED AS SESSING OFFICER IN HIS DETAILED ORDER ARRIVED AT THE SUPPRE SSION OF SALES BY THE ASSESSEE AT 56.33% AND WORKED OUT THE SUPPRESSED SALE AT `20,82,872/- AND ADDED THE SAME TO THE 3 ITA NO.1077/MDS/2014 INCOME OF THE ASSESSEE. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ESTIMATED THE SUPPRESSED SALE AT 30% BY OBSERVING AS UNDER:- 6.3 I HAVE CAREFULLY CONSIDERED THE ARGUMENTS PUT FORTH BY THE AR AND THE GROUND ON WHICH THE ADDITION WAS MADE BY THE AO. DURING SURVEY OPERATIONS, SWORN STATEMENT OF SHRI RAJU, IN CHARGE OF M/S. ROHINI LO DGE REVEALED THAT SALES SUPPRESSION RESORTED TO BY THE APPELLANT WAS IN VOGUE FOR LAST FIVE TO SIX YEARS. FURTHER IS ALSO TRANSPIRES THAT BILL BOOKS ARE DESTROYED AN D SEPARATE SET OF SALE BILLS ARE PREPARED TO UNDER RE PORT THE SALES. THEREFORE BOOKS RESULTS OF THE PAST ARE NOT RELIABLE AS THESE FACTORS CANNOT BE BRUSHED ASIDE A ND HENCE I AM OF THE VIEW THAT THE AO HAD VALID REASONS FOR ESTIMATING THE SUPPRESSED SALES FOR THE YEAR BA SED ON THE SURVEY FINDINGS. BEFORE THE AO AND ALSO BEFO RE ME THE APPELLANT/THE AR HAVE PLEADED THAT THE PERCENTAGE OF PROFIT AS ARRIVED AT BY THE AO FOR COMPUTATION OF INCOME IS EXCESSIVE AND THE AO HAS N OT CONSIDERED THE FACT THAT MENU RATE CANNOT BE CHARGED DURING NON-PEAK HOURS OF BUSINESS AND CONSIDERING T HE NATURE OF BUSINESS REGULAR CUSTOMERS AND CORPORATE BOOKINGS ARE BILLED AT DISCOUNTED RATES. THE AR IN HIS WRITTEN SUBMISSION DISPUTED ESTIMATION OF SALES SUPPRESSION AT 56.33% AND SUBMITTED THAT AFTER TAKI NG INTO THE FACTORS REFERRED ABOVE, THE DIFFERENCE WOULD BE ONLY 24%. TO SUPPORT HIS ARGUMENTS, HE PLEADED THAT THE AO HAS NOT FOUND ANY SPECIFIC MISTAKE DURING THE A.Y I N QUESTION AND HENCE SUMMARY ADDITIONS BASED ON FIGUR ES AVAILABLE FOR A.Y 2008- 09 (YEAR OF SURVEY) IS NOT JUSTIFIABLE. AFTER CAREFUL CONSIDERATION, CONSIDERI NG THE CIRCUMSTANCES, I AM OF THE CONSIDERED VIEW THAT EST IMATION OF SUPPRESSED SALES AT 30% WOULD MEET THE END OF JU STICE IN THIS CASE AND ACCORDINGLY DIRECT THE AO TO RESTR ICT THE ADDITION OF SALES SUPPRESSION AT 30% AS AGAINST 56. 33%. THIS GROUND OF APPEAL IS PARTLY ALLOWED 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ENTIRE SUPPRESSION OF SALE WAS W ORKED OUT 4 ITA NO.1077/MDS/2014 BY THE LEARNED ASSESSING OFFICER BASED ON CERTAIN S TATEMENTS OBTAINED FROM THE EMPLOYEES OF THE ASSESSEE AND THE Y CANNOT BE RELIED UPON. TO AVOID PROTRACTED LITIGATI ON, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT HE WOULD NOT PREFER TO PURSUE THE APPEAL, IF A FAIR ESTIMATI ON IS MADE ON THE SUPPRESSED SALE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, VEHEMENTLY OPPOSED TO THE SUBMISSION OF THE L EARNED AUTHORIZED REPRESENTATIVE AND ARGUED BY STATING THA T THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS AL READY GIVEN SUBSTANTIAL RELIEF TO THE ASSESSEE AND THEREF ORE, HIS ORDER MAY BE CONFIRMED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE, IT IS EVIDENT THAT THE LEARNED ASSESSING OFFICER HAS MADE A DETAILED WORKING BASED ON CERTAIN MATERIALS OBTAINED DURING THE COURSE OF THE SURVEY AND INVESTIGATION C ONDUCTED ON THE EMPLOYEES OF THE ASSESSEE WHICH MAY NOT BE ACCURATE. IT IS ALSO EVIDENT THAT THE ASSESSEE HAS NOT 5 ITA NO.1077/MDS/2014 MAINTAINED ITS ACCOUNTS IN A PROPER MANNER AND HAS ALSO TAMPERED WITH THE ACTUAL SALES. CONSIDERING THE ABO VE FACTS OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GRACIOUSLY GRANTED RELIEF TO THE ASSE SSEE BY CONFIRMING THE SUPPRESSION OF SALE AT 30%. IN THESE CIRCUMSTANCES, BEARING IN MIND THE REQUEST OF THE A SSESSEE AND TO CUT SHORT THE HARDSHIPS OF PROTRACTED LITIGA TION AND IN THE INTEREST OF JUSTICE WE ARE OF THE CONSIDERED VI EW THAT ADDITION OF `7,00,000/- WOULD SUFFICE. ACCORDINGLY, WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO SUSTAIN THE ADDITION OF `7,00,000/- TOWARDS SUPPRESSION OF SALES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 1 ST AUGUST, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 1 ST AUGUST, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF . 6 ITA NO.1077/MDS/2014