S. Pranay Kumar, R.R.Dist., Hyderabad V. ITO, Ward-8(2), Hyderabad, Hyderabad

ITA 1095/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6051 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 20-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 17-08-2016
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• Keywords: Agreed addition
• Section: 80C; 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1095/HYD/2016 ASSESSMENT YEAR: 2009-10 S. PRANAY KUMAR, SHAMSHABAD [PAN: AZMPS3409G] VS INCOME TAX OFFICER, WARD-8(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. RAVI SESHAGIRI RAO, AR FOR REVENUE : SMT. SUMAN MALIK, DR DATE OF HEARING : 20-03-2017 DATE OF PRONOUNCEMENT : 22-03-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD D ATED 29-04-2016. THE ISSUE IN THIS APPEAL IS WITH REFEREN CE TO ADDITION OF RS. 6 LAKHS AND DENIAL OF CLAIM U/S. 80C AND 80G G INCOME TAX ACT [ACT]. 2. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BUSINESS OF SALE OF BAKERY ITEMS AND SOFT DRINKS IN THE RTC BUS DEPOT AT HYDERABAD. FOR THE AY. 2009-10, ASSESSEE FIL ED RETURN OF INCOME ADMITTING INCOME OF RS. 2,48,900/- AND CLAIMIN G DEDUCTION OF RS. 84,000/- UNDER CHAPTER-VIA OF THE ACT. ASSESS ING OFFICER (AO) NOTICED THAT THERE WERE DEPOSITS TO THE TUNE OF RS. 17,70,700/- IN THE SB A/C WITH ICICI BANK DURING THE YEAR. I.T.A. NO. 1095/HYD/2016 S. PRANAY KUMAR :- 2 - : ASSESSEE EXPLAINED THAT BEING A SMALL RETAIL TRADER, HI S CASH COLLECTIONS WERE DEPOSITED IN THE BANK ACCOUNT AND HIS TURNOVER FROM THE TOTAL BUSINESS WAS ONLY RS. 27,35,825/-. INCL UDING THE RENTAL RECEIPTS OF RS. 12,72,500/- FROM THE TWO SHOPS WHICH WERE LEASED OUT TO OTHERS, THE TOTAL TURNOVER/RECEIPTS NEVER I NCREASED RS. 40 LAKHS (TOTAL RECEIPTS OF RS. 39,48,325/-). SI NCE HE IS IN RETAIL BUSINESS, THE INCOME OFFERED FROM THE BUSINESS AT RS. 3,32,897/- IS MORE THAN THE INCOME TO BE OFFERED BY A SMALL RETAIL TRADER UNDER 44AD. HOWEVER, AO WHILE ACCEPTING THE SO URCE OF CASH DEPOSITS, MADE AN ADDITION OF RS. 6 LAKHS AS AN ADDITIONAL INCOME AND STATED IN HIS ORDER THAT AR HAS COME FORWA RD AND ADMITTED VOLUNTARILY. IN ADDITION TO THE ABOVE RS. 6 L AKHS, THE AO ALSO DISALLOWED THE CLAIM U/S. 80C AND 80GG AND DETE RMINED THE TOTAL INCOME. AGGRIEVED BY THE ORDER OF THE AO, ASSESS EE CARRIED THE MATTER TO LD.CIT(A). LD.CIT(A) IN HIS EX-PARTE ORDER HOWEVER, CONFIRMED THE ABOVE TWO ITEMS. HENCE, THE PRESENT APPE AL. 3. IT WAS THE SUBMISSION OF LD. COUNSEL THAT AR HAS NOT AGREED FOR THE ROUND-SUM ADDITION AS ASSESSEES ENTIRE TURNOV ER IS LESS THAN RS. 40 LAKHS AND INCOME DECLARED FROM THE BUSINE SS IS MORE THAN REASONABLE FOR A SMALL RETAIL TRADER. IT WAS FURTH ER EXPLAINED THAT AO WHILE ACCEPTING THE DEPOSITS OF RS. 17,70,000/- PROPOSED IN THE SHOW CAUSE NOTICE, HOWEVER, MADE AN ADDITION OF RS. 6 LAKHS WITHOUT THERE BEING ANY BASIS. HE REFERRED TO TH E P&L A/C PREPARED AND ENCLOSED TO THE RETURN OF INCOME (COPY PL ACED AT PG. 4 OF THE PAPER BOOK) TO SUBMIT THAT ASSESSEES ENTIRE SALES WERE AT RS. 27,35,826/- AND THE GROSS PROFIT SHOWN WAS AT RS. 12,13,769/- WHICH IS VERY REASONABLE AND NET PROFIT SHOWN WAS ALS O I.T.A. NO. 1095/HYD/2016 S. PRANAY KUMAR :- 3 - : RS. 3,32,697/- WHICH IS ABOUT 11% OF THE TURNOVER. IN VIEW OF THAT IT WAS SUBMITTED THAT ADDITION MADE MAY BE DELETED. 4. WITH REFERENCE TO OTHER CLAIMS, LD. COUNSEL FAIRLY ADMITTED THAT ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM U/S. 80C. HE REFERRED TO THE COMPUTATION OF INCOME WITH REFERENCE TO C LAIM U/S. 80GG. IT WAS SUBMITTED THAT THE NECESSARY RECEIPTS FOR PA YMENT OF RENT WILL BE PRODUCED BEFORE THE AO. 5. LD.DR, HOWEVER, RELIED ON THE ORDERS OF THE AO TO S UBMIT THAT ASSESSEES AR AGREED FOR THE ADDITION AND CONSEQUENTLY , ASSESSEE CANNOT CONTEST THE SAME. LD.DR PRODUCED THE RECORD TO SU PPORT THE CONTENTIONS THAT ASSESSEES AR AGREED FOR THE ADDITIO N. 6. I HAVE PERUSED THE RECORD AND CONSIDERED THE RIVAL CONTENTIONS. AS FAR AS NOTING OF THE AO IN THE FILE IS CONCERNED, THERE IS A CLEAR FINDING THAT ASSESSEES DEPOSITS ARE OUT OF TURNOVER. WHILE NOTING THE ORDER SHEET, THE AO NOTED AB OUT THE GROSS RECEIPTS FROM RENT AT RS. 12,12,500/- AND THEREA FTER NOTED ABOUT EXPENDITURE PERTAINING TO THE SAID RENTS. THEREAF TER, IT WAS RECORDED THAT AR HAS COME FORWARD AND AGREED FOR AN A DDITION OF RS. 6 LAKHS. ALL THESE NOTINGS WERE WRITTEN BY THE AO IN HIS HAND BUT THERE IS NO AGREED WORD MENTIONED BY THE AR WHILE INITIALING ON THE ORDER SHEET. WHAT THE AR ACKNOWLEDGED IS THE E NTRY IN THE ORDER SHEET BUT IT CANNOT BE PRESUMED THAT HE HAS AGREED FOR THE ADDITION IN THE ABSENCE OF THE WORD AGREED. NOT ONLY THAT WHILE DISCUSSING THE RENTAL RECEIPTS, AO MADE AN ADDITION O F RS. 6 LAKHS, WITHOUT THERE BEING ANY RATIONALE FOR THE SAME. I AM O F THE OPINION THAT THE AO HAS NOT APPRECIATED THE FACTS CORRECTLY AND THE SO I.T.A. NO. 1095/HYD/2016 S. PRANAY KUMAR :- 4 - : CALLED AGREED ADDITION IS NOT VOLUNTARY. IN VIEW OF TH AT, SINCE THE CIT(A) ALSO HAD NO OCCASION TO EXAMINE THE ISSUES, B EING AN EX- PARTE ORDER, I AM OF THE OPINION THAT THE ENTIRE ASSESSMENT M ADE BY THE AO IS TO BE SET ASIDE AND RESTORED TO THE AO FOR RE- EXAMINATION ON THE FACTS. ASSESSEE SHOULD BE GIVEN DU E OPPORTUNITY, AND TO THE EXTENT ASSESSEE FURNISHES THE EVIDENCE, THE NECESSARY CLAIMS U/S. 80C AND 80GG ALSO SHOULD BE C ONSIDERED. WITH THESE DIRECTIONS, THE ORDERS OF THE AO AND CIT(A) ARE SET ASIDE AND ASSESSMENT IS RESTORED TO THE FILE OF THE AO TO DO I T AFRESH AS PER THE FACTS AND LAW. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 22 ND MARCH, 2017 TNMM I.T.A. NO. 1095/HYD/2016 S. PRANAY KUMAR :- 5 - : COPY TO : 1. S. PRANAY KUMAR, SHAMSHABAD. C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-8(2), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-2, HYDERABAD . 4. THE PR. COMMISSIONER OF INCOME TAX-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.