Income Tax Officer, Hyderabad V. Sri Y. Sreekanth, Hyderabad

ITA 1118/HYD/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5578 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 20-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRI SOLGY JOSE T KOTTARAM
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1118/HYD/2012 : ASSTT. YEAR 2008 - 09 INC OME TAX OFFICER WARD 11(3), HYDERABAD V/S. SHRI Y.SREEKANTH, HYDERABAD. ( PAN - AATPY 4268 K) (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI SHRI SOLGY JOSE T.KOTTARAM DR RESPONDENT BY : NONE DATE OF HEARING 11 . 2 .201 4 DAT E OF PRONOUNCEMENT 11.2.2014 O R D E R PER B. RAMAKOTAIAH, ACCOUNTANT MEMBER: THIS IS A REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) VI, HYDERABAD DATED 25.5.2012. 2. REVENU E IS AGGRI E VED BY THE DELETION OF RS.38 ,61,00 MADE TOWARDS UNEXPLAINED INVESTMENT UNDER THE PROVI SI ON S OF S.69 OF THE I NCOME - TAX ACT, AND INSTEAD , ESTIMATI O N OF THE INCOME , WITHOUT ANY BASIS , AT 8% OF THE REVISED TURNOVER. THE R E VENUE HAS RAISED SEVEN GROUNDS ON THIS ISSUE. 3. BRIEFLY STAT ED, ASSESSEE IS A MANUFACTURER OF PACKING MATERIAL. IN TH E ASSESSMENT ASSESSING OFFICER C O MPLETED EX - PARTE UNDER S.144 OF THE ACT , SIN C E THE ASSESSEE HAS NOT EXPLAINED SOME OF TH E INVESTMENTS/DEPOSITS IN THE BANK, THE ASSESSING OFFICER ASSESSED THE INCOM E BY MAKING AN ADDITION OF RS .38,61,100. BEFORE THE LEARNED CIT(A), WHILE ADMITTING THAT THE STATEMENTS PREPARED AND FILED ALON G WITH THE R ETURN OF INCOME ARE NO T CORRECT, THE ASSESSEE HAS FILED REVISED PROFIT & LOSS ACCOUNT, B ALANCE SHEET AND REQUESTED T HE CIT(A) TO ADMIT THE NEW EVIDENCE. THE LEARNED CIT(A) HAS SENT THE DOCUMENTS TO ASSESSING OFFICER FOR VERIFICATION, AND THE ASSESSING OFFICER IN HIS REMAND REPORT ITA NO. 11 18 / HYD/2012 SHRI Y.SREEKANTH, HYDERABAD 2 FURTHER DOUBTED CERTAIN SUNDRY CREDITORS, AND REITERATED THE ADDITION S MADE ORIGINALLY. T HE LEARNED CIT(A), WHIL E ACCEPTING THAT ASSESSEES STATEMENTS COULD NO T BE RELIED UPON, RESORTED TO ESTIMATION OF IN C OM E AT 8% OF THE REVISED TURNOVER OF R S .94,49,740, AS ADMITTED IN THE REVISED PROFIT & LOSS ACCOUNT. REVENUE IS AGGRIEVED. 4. IN SPITE O F ISSUING VARIOUS NOTICES, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. THE RE FORE, WE HAVE HE A RD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PROCEED TO DECIDE THE APPEAL ON MERITS. W E WERE NOT INFORMED WHETHER THE ASSESSEE ALSO PREFERRED ANY APPEAL AGAINST THE ORDER OF THE LEARNED CIT(A). THEREFORE, WE PROCEED TO DISPOSE OF THE REVENUES APPEAL ON MERITS. 5. AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE, WE ARE OF THE OPINION THAT THE MATER REQUIRES EXAMIANTION BY THE ASSESSING OFFICER AFRESH. ADMITTEDLY, THE ASSESSEE IS A MANUFACTURER OF PACKIN G MATE R IAL, AND HIS TURNOVER EXCEEDS R S .40 LAKHS. THEREFORE, ESTIMATION OF INCOME AT 8%, LIKE IN THE CA S ES OF CONTRACTORS, CANNOT BE RESORTED TO, UNLESS THERE A R E COMPARABLE FIGURES. THE LEARNED CIT(A) D ID NO T EVEN VERIFY THE ASSESSEES NET PROFIT MARGINS IN EARLIER YEARS. NOT ONLY THAT, AS SEEN FROM THE REMAND REPORT OF THE ASSESSING OFFICER, THERE SEEMS TO B E NO EXPLANATION ABOUT THE VARIOUS DEPOSITS IN CASH MADE IN THE BANK ACCOUN TS AND ADVANCES MADE TO OTHER PARTIES, WHICH WERE BROUGHT TO TAX BY THE ASSESSING OFFICER IN THE ORDER. IN THE REMAND REPORT, THE ASSESSING OFFICER REITERATED THAT ADDITIONS MADE ORIGINALLY SHOULD BE CONFIRMED. HOWEV E R, WITHOUT ADDRESSING ON THE ISSUE OF UN E XPLAIN E D IN VE STM ENTS/CREDITS, THE LEARNED CIT(A) RESORTED TO ESTIM A TION, WHICH, IN OUR VIEW, IS NO T CORRE C T. EV EN AFTER ESTIMATION OF INCOME, THE ASSESSING OFFICER WAS NOT PRECLUDED FROM MAKING ANY ADDITIONS ON ACCOUNT OF UN E XPLAIN E D INVESTMENTS AND CASH CREDITS, AS H E L D BY TH E HONBL E SUP R EME COU R T IN THE CASE OF CITV/S. DEVI PRASAD VISWANATH PRASAD (72 ITR 194) - SC. THER E FORE, IN THE INTE RE STS OF JUSTICE, WE SET ASIDE THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A), AND R E STORE THE ENTIRE ASSESSMENT TO THE FILE O F THE ASSESSING OFFICER, TO BE DONE AFRESH AFTER EXAMINING THE ABOVE ISSUE. ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY TO EXP L AIN ITA NO. 11 18 / HYD/2012 SHRI Y.SREEKANTH, HYDERABAD 3 THE TRANSACTIONS, THE TURNOVERS AND PROFITS, INCLUDING THE SO CALLED UNEXPLAINED DEPOSITS AN D CREDITS. WITH THESE DIRECTION S , WE A LLOW THE GROUNDS OF THE REVENUE FOR STATISTICAL PURPOSES. 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 11 TH FEBRUARY, 2014 SD/ - SD / - (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 11TH FEBRUARY, 2014 COPY FORWARDED TO: 1. SHRI Y.SREEKANTH, PLOT NO.53, GANDHINAGAR, BALANAGAR HYDERABAD. 2. INCOME TAX OFFICER WAD 11(3), HYDERABA D 3. COMMISSIONER OF INCOME - TAX(APPEALS) VI , HYDERABAD 4. COMMISSIONER OF INCOME - TAX V HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S