Atluri Travel Air, hyd, Hyderabad V. ITO, Hyderabad

ITA 113/HYD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1407 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 24-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKARA RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Principle of natural justice
• Section: 263; 63; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, J.M. AND SHRI B.R.BASKARAN, A.M. ITA NO.113/HYD/2011 (ASSESSMENT YEAR 20 05-06) M/S. ATLURI TRAVEL AIR, HYDERABAD. ( PAN - AABFT 3021 H ) V/S. INCOME - TAX OFFICER, WARD - 6(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI A.V.RAGHURAM RESPONDENT BY : SHRI D.SUDHAKARA RAO DATE OF HEARING 3.1 .201 3 DATE OF PRONOUNCEMENT 4.1.2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20- 01-2010 PASSED BY LEARNED CIT-III, HYDERABAD U/S 2 63 OF THE ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING EFFECTIVE GRO UNDS BEFORE US:- (A) THE LEARNED CIT ERRED IN DIRECTING THE ASS ESSING OFFICER TO CONSIDER RS.14,76,838/- AS INCOME OF THE ASSESSEE W ITHOUT APPRECIATING THE FACT THAT THIS SUM REPRESENTS THE AMOUNTS WHICH WERE EARLIER CONSIDERED AS RECEIPTS ARE WRITT EN OFF BUT INADVERTENTLY SHOWN AS DISCOUNTS ALLOWED TO CUSTOMERS. (B) THE LEARNED CIT ERRED IN DIRECTING THE ASSE SSING OFFICER TO CONSIDER RS.4,49,582/- AS INCOME WITHOUT APPRECIATI NG ITA NO.113/HYD/2011 M/S. ATLURI TRAVEL AIR, HYDERABAD. 2 THAT THIS SUM REPRESENTS TDS AND IS CONSIDERED ALRE ADY AS RECEIPTS. 3. DURING THE COURSE OF HEARING, THE LEARNED A.R SUBMITTED THAT THE LEARNED CIT HAS DIRECTED THE ASSESSING OFFICER TO ASSESS BOTH THE AMOUNTS STATED ABOVE. HOWEVER, BOTH THE AMOUNTS COULD BE PROPERLY EXPLAINED BY THE ASSESSEE, IF THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSE E WAS PROPERLY UNDERSTOOD BY THE TAX AUTHORITIES. HE SUBMITTED THAT THE ASSESSI NG OFFICER COULD NOT LOOK INTO THE EXPLANATIONS GIVEN BY THE ASSESSEE, SINCE THE D IRECTION WAS GIVEN TO ASSESS BOTH THE AMOUNTS AND IN THIS PROCESS, THE ASSESSEE ALSO DID NOT HAVE AN OPPORTUNITY TO PROPERLY EXPLAIN THESE TWO ITEMS. A CCORDINGLY, HE SUBMITTED THAT THE ORDERS OF THE LEARNED CIT ON THESE TWO ISSUES B E MODIFIED AND THE ASSESSING OFFICER MAY BE DIRECTED TO EXAMINE THESE ISSUES IN ACCORDANCE WITH THE LAW. 4. THE LEARNED D.R SUBMITTED THAT THE EXPLANA TIONS FURNISHED BY THE ASSESSEE WERE DULY EXAMINED BY LEARNED CIT AND THER EAFTER ONLY HE HAS GIVEN DIRECTION TO ASSESSEE THE ABOVE SAID TWO ITEMS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS. DURI NG THE COURSE OF HEARING, THE LEARNED A.R CARRIED US THROUGH THE PROFIT AND L OSS ACCOUNT AND EXPLAINED ABOUT THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSE SSEE TO ACCOUNT FOR THE PURCHASE AND SALE OF AIR TICKETS. PRIMA FACIE, IT APPEARS THAT THE CONFUSION HAS ARISEN DUE TO THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE. AS POINTED OUT BY LEARNED A.R, THE DIRECTION GIVEN BY THE LEARNED CIT TO ASSESS BOTH THE INCOME HAS LEFT BOTH THE ASSESSING OFFICER AND THE ASSESSEE WITH NO OPTION AND NO OPPORTUNITY ALSO TO EXAMINE THESE TWO ISSUES. HENC E, IN OUR VIEW, IN THE INTEREST OF NATURAL JUSTICE, THE ASSESSING OFFICER SHOULD HA VE BEEN DIRECTED TO EXAMINE THE ISSUE AFTER DULY CONSIDERING THE EXPLANATIONS OF TH E ASSESSEE. ACCORDINGLY WE MODIFY THE ORDER OF LEARNED CIT ON THE IMPUGNED TWO ISSUES AND DIRECT THE ASSESSING OFFICER TO EXAMINE THESE TWO ISSUES AFRES H WITHOUT BEING INFLUENCED BY ITA NO.113/HYD/2011 M/S. ATLURI TRAVEL AIR, HYDERABAD. 3 THE OBSERVATIONS MADE BY LEARNED CIT AND TAKE APPRO PRIATE DECISION IN ACCORDANCE WITH LAW, AFTER DULY CONSIDERING THE EXP LANATIONS GIVEN BY THE ASSESSEE. THE ASSESSEE SHOULD BE GIVEN PROPER OPPO RTUNITY OF BEING HEARD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 4 TH JANUARY, 2013 SD/- SD/- ( ASHA VIJAYARAGHAVAN ) ( B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED/- 4 TH JANUARY, 2013 COPY FORWARDED TO: 1. M/S. ATLURI TRAVEL AIR, C/O. SHRI A.V. RAGHU RAM & K.VASANT KUMAR, ADVOCATES, FLAT NO.610, 6TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD-1. HYDERABAD. 2. 3. 4. INCOME - TAX OFFICER, WARD - 6(2) , HYDERABAD COMMISSIONER OF INCOME-TAX III, HYDERABAD DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.