Dy.CIT, Circle-3(2), Hyderabad V. M/s Sujana Towers Ltd., Hyderabad

ITA 1191/HYD/2014

• Counselvise Citation: 119122514 RSA 2014
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-03-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Opportunity of being heard
• Section: 115JB

Judgement Text

ITA NOS.1621 & 1191 OF 2014 SUJANA TOWERS LTD HYDER ABAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER & SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1621/HYD/2014 (ASSESSMENT YEAR: 2010-11) M/S. SUJANA TOWERS LTD HYDERABAD PAN : AAKCS 7820 F VS. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(2), HYDERABAD (APPELLANT) (RESPONDENT) ITA NO.1191/HYD/2014 (ASSESSMENT YEAR: 2010-11) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 3(2), HYDERABAD VS. M/S. SUJANA TOWERS LTD HYDERABAD PAN : AAKCS 7820 F (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, CA FOR REVENUE : SHRI D. SUDHAKAR RAO, CIT (DR) DATE OF HEARING : 05/03/2015 DATE OF PRONOUNCEMENT : 18 /03/2015 O R D E R PER BENCH: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF THE LD CIT (A)-IV HYDE RABAD, DATED 10.04.2014 PASSED FOR A.Y 2010-11. ITA NOS.1621 & 1191 OF 2014 SUJANA TOWERS LTD HYDER ABAD PAGE 2 OF 6 2. BRIEF FACTS ARE THAT THE ASSESSEE IS IN THE BUSI NESS OF MANUFACTURING OF RE-ROLLED STEEL PRODUCTS, TRADING IN STEEL COMPONENTS AND CONSTRUCTION OF TELECOM TOWERS. IT F ILED ITS RETURN OF INCOME BELATEDLY ON 31.03.2012 DECLARING A TOTAL INCOME OF RS.95,34,350 UNDER NORMAL PROVISIONS AND RS.14,67,89,622 U/S 115JB OF THE ACT. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, AO DIRE CTED ASSESSEE TO FURNISH INFORMATION AND DOCUMENTS IN SU PPORT OF THE ENTRIES IN ITS AUDITED RESULTS AND THE RETURN OF IN COME. AO ALSO ISSUED A FINAL SHOW CAUSE LETTER DATED 1.2.2013 TO THE ASSESSEE. HOWEVER, ASSESSEE FAILED TO PRODUCE ANY OF THESE DE TAILS. UNDER THE CIRCUMSTANCES, AO REJECTED THE BOOKS OF ACCOUNT S AS IT WAS NOT POSSIBLE TO ARRIVE AT THE CORRECT INCOME OF THE ASSESSEE FROM THE BOOKS OF ACCOUNTS. AO ESTIMATED THE NET INCOME AT 1.5% OF THE TOTAL TURNOVER. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHO UPHELD THE DECISION OF THE AO IN REJECTING THE ACCOUNTS. AO ESTIMATED INCOME AT 1.5 OF THE TOTAL TURNOVER OF THE ASSESSEE. FOR THE PRECEDING A.Y 200 9-10 IN ASSESSEES OWN CASE VIDE CIT (A)S ORDER IN ITA NO. 522/AC ITA NOS.1621 & 1191 OF 2014 SUJANA TOWERS LTD HYDER ABAD PAGE 3 OF 6 3(2)/CIT(A)-IV/2011-12 DATED 30.8.2012 UNDER SIMILA R CIRCUMSTANCES, HE HAD DIRECTED THE AO TO ESTIMATE T HE INCOME OF THE ASSESSEE AT 1% OF THE TURNOVER. SINCE THE FACTS AND CIRCUMSTANCES ARE SIMILAR IN THE PRESENT APPEAL, CI T (A) FOLLOWING HIS DECISION IN THE ASSESSEES OWN CASE FOR PRECEDI NG YEAR, DIRECTED THE AO TO ESTIMATE THE INCOME AT 1% OF THE TURNOVER. 5. AGGRIEVED, BOTH ASSESSEE AND REVENUE ARE IN APPE AL BEFORE US RAISING THE FOLLOWING GROUNDS: ITA NO.1621/HYD/2014- ASSESSEES APPEAL: 1. THE LD CIT (A) ERRED BOTH IN LAW AND ON FACTS I N PARTLY ALLOWING THE APPEAL. 2. THE LD CIT (A) ERRED IN UPHOLDING THE REJECTION OF BOOKS BY THE AO. 3. THE LD CIT (A) OUGHT TO HAVE APPRECIATED THE FAC T THAT BOOKS CANNOT BE REJECTED MERELY ON THE GROUND THAT PERCENTAGE OF PROFIT DECLARED IS AT LOWER SIDE. 4. THE LD CIT (A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE AO CANNOT CHANGE THE METHOD OF ACCOUNTING WHICH IS BEING CONTINUOUSLY FOLLOWED BY THE APPELLANT WIT HOUT ASSIGNING ANY REASON. 5. THE LD CIT (A) OUGHT TO HAVE CONSIDERED THE RETU RNED INCOME FILED BY THE APPELLANT. 6. THE RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISION OF THE JURISDICTIONAL BENCH OF ITAT IN THE CASE OF VISHAL INFRASTRUCTURE LTD VS. ACIT (104 ITD 537 (HY D.). ITA NOS.1621 & 1191 OF 2014 SUJANA TOWERS LTD HYDER ABAD PAGE 4 OF 6 7. THE LD CIT (A) ERRED IN ESTIMATING THE INCOME AT 1% OF THE TURNOVER WHICH IS A VERY HIGH PERCENTAGE IN THE LINE OF TRADE OF THE APPELLANT . ITA NO.1191/HYD/2014 REVENUES APPEAL : 1. THE LD CIT (A) ERRED IN LAW ALLOWING THE ASSESS EES APPEAL. 2. THE LD CIT (A) OUGHT TO HAVE UPHELD THE ESTIMATI ON OF PROFIT MADE BY THE AO @ 1.5% AS THE ESTIMATION WAS BASED ON THE GENERAL TRENDS IN THE LINE OF THE BUSINESS . 6. WE FIND THAT THE ISSUE IS COVERED BY THE DECISIO N OF THE ITAT COORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NOS.1360/HYD/2013 & ITA NO.1409/HYD/2013 FOR THE A. Y 2009-10. THE RELEVANT PORTION OF THE DECISION AT PA RA NO.8 OF THE ORDER IS EXTRACTED BELOW: 8. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE CONTRA RY, OPPOSING THE RELIEF GRANTED BY THE CIT(A) ON THE GR OUND THAT THE RATE OF 1.5% ADOPTED BY THE ASSESSING OFFICER W AS IN LINE WITH THE TREND IN THE MARKET IN ASSESSEE'S LINE OF BUSINESS, SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER B E RESTORED. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE ORDERS OF THE REVENUE AUTHORITIES AND OTHER MATERIA L AVAILABLE ON RECORD. WE HAVE ALSO CONSIDERED THE SP ECIFIC PLEA OF THE ASSESSEE FOR ONE MORE OPPORTUNITY FOR F URNISHING THE RELEVANT BOOKS OF ACCOUNT AND OTHER DETAILS, IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FO R FRESH CONSIDERATION. WE FIND THAT THIS TRIBUNAL, IN THE C ONTEXT OF ADDITIONS MADE SIMILAR CIRCUMSTANCES AND CONSIDERIN G SIMILAR PLEAS OF THE ASSESSEE, IN THE CASES OF ASSE SSEE'S OWN GROUP, VIDE ITS ORDER DATED 13.8.2013, RESTORED THE MATTER ITA NOS.1621 & 1191 OF 2014 SUJANA TOWERS LTD HYDER ABAD PAGE 5 OF 6 BACK TO THE FILE OF THE ASSESSING OFFICER, IN THE F OLLOWING MANNER- '10. CONSIDERING THE SUBMISSIONS OF THE PARTIES AND KEEPING IN VIEW THE OF JUSTICE, WE ALLOW ONE MORE OPPORTUNITY TO THE ASSESSEE FOR PRODUCTION OF ITS BOOKS OF ACCOUNTS AN D OTHER DOCUMENTS BEFORE THE ASSESSING OFFICER TO SUBSTANTI ATE ITS CLAIM AND ACCORDINGLY, SET ASIDE THE ORDER OF THE C IT(A) AND REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFIC ER FOR DENOVO ASSESSMENT AFTER EXAMINING THE BOOKS OF ACCOUNTS AN D OTHER DOCUMENTS. WE ALSO DIRECT THE ASSESSEE TO PRODUCE A LL ITS BOOKS OF ACCOUNTS, DOCUMENTS, BILLS, INVOICES AND ANY OTH ER INFORMATION CALLED FOR BY THE ASSESSING OFFICER AND COOPERATE IN FINALISATION OF THE PROCEEDING. IN THE EVENT, TH E ASSESSEE DOES NOT CO-OPERATE BY PRODUCING THE BOOKS OF ACCOU NTS AND OTHER INFORMATION CALLED FOR BY THE ASSESSING OFFIC ER OR IF THE ASSESSING OFFICER ON EXAMINATION OF THE BOOKS OF AC COUNTS AND OTHER DOCUMENTS FINDS THAT THERE ARE DISCREPANC IES WHICH THE ASSESSEE IS NOT ABLE TO EXPLAIN, THE ASSESSING OFFICER WOULD BE AT LIBERTY TO TAKE AN INDEPENDENT DECISION IN TH E MATTER IN ACCORDANCE WITH LAW. THE ASSESSING OFFICER SHALL AF FORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE.' 10. CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE SPECIFIC PLEA OF THE ASSESSEE, IN THE INTERESTS OF JUSTICE IN THIS CASE ALSO, WE ARE INCL INED TO SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH SI MILAR DIRECTIONS. WE DO SO AND DIRECT THE ASSESSING OFFIC ER TO RE- EXAMINE THE MATTER, AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND OT HER INFORMATION, AND RE-DETERMINE THE INCOME ACCORDINGL Y. THE DIRECTIONS GIVEN IN THE ORDER OF THIS TRIBUNAL DATE D 13.8.2013, EXTRACTED ABOVE, APPLY MUTATIS MUTANDIS TO THIS CASE AS WELL. ASSESSEE IS DIRECTED TO COOPERATE WIT H THE ASSESSING OFFICER AND COMPLY WITH THE NOTICES, AND THE ASSESSING OFFICER IS ITA NO.1360 & 1409/HYD/2013 M/S . SUJANA TOWERS LTD., HYDERABAD DIRECTED TO COMPLETE THE ASSESSMENT AFRESH IN ACCORDANCE WITH LAW AFTER GIVI NG REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE . 7. RESPECTFULLY FOLLOWING THE DECISION OF THE COORD INATE BENCH IN ASSESSEES OWN CASE FOR A.Y 2009-10, WE SET ASID E THE ISSUE TO THE FILE OF THE AO TO DECIDE THE MATTER AFTER GIVIN G ONE MORE ITA NOS.1621 & 1191 OF 2014 SUJANA TOWERS LTD HYDER ABAD PAGE 6 OF 6 OPPORTUNITY TO THE ASSESSEE. BOTH THE APPEALS ARE A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH, 2015. S D/ - S D/ - (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 18 TH MARCH, 2015. VNODAN/SPS COPY TO: 1. M/S.SUJANA TOWERS LTD, PLOT NO.18 SUJANA PLAZA, NAG ARJUNA HILLS, HYDERABAD 500082 2. THE ASSTT. CIT, CIRCLE 3(2) 7 TH FLOOR, B BLOCK IT TOWERS, AC GUARDS, HYDERABAD 500004 3. THE CIT(A)-IV HYDERABAD 4. THE CIT-III HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER