N.Krishna Reddy, Hyderabad V. ITO, Hyderabad

ITA 1470/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3336 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: S RAMA RAO
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA P0OJARI, ACCOUNTANT MEMBER ITA NO.1470/HYD/10 : ASSE SSMENT YEAR 2006-07 SHRI N.KRISHNA REDDY, HYDERABAD. ( PAN ADAPN 1530 H ) V/S. INCOME-TAX OFFICER, WARD-4(3), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SMT. NIVEDITA BISWAS O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE ARS 2006-07 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS). 2. GROUND OF APPEAL NO.1 OF THE ASSESSEE IS GENER AL IN NATURE AND NEEDS NO ADJUDICATION. 3. GROUND OF APPEAL NO.2 OF THE ASSESSEE IS AS UN DER- 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN HOLDING THAT THE PROVISIONS U/S. 44AF OF THE I.T./ACT ARE N OT APPLICABLE TO THE FACTS OF THE CASE. THE LEARNED COMMISSIONER OF INCO ME-TAX(APPEALS) OUGHT TO HAVE SEEN THAT ACCORDING TO THE PROVISIONS OF SEC.44AF, IF THE TURNOVER IS LESS THAN RS.40 LAKHS, THE PROVISIO NS OF THE SAID SECTION WOULD APPLY AND THE ASSESSMENT HAS TO BE M ADE IN ACCORDANCE WITH THE SAID PROVISIONS. LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRESSED TH IS GROUND OF APPEAL. IT IS ACCORDINGLY REJECTED. ITA NO.1470./HYD/10 SHRI N.KRISHNA REDDY, HYDERABAD. 2 4. GROUND OF APPEAL NO.3 OF THE ASSESSEE IS AS UN DER- 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN HOLDING THAT THERE IS ANY DIFFERENCE IN THE SALES AND FURTH ER ERRED IN CONFIRMING THE ADDITION OF RS.80,356/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALES WITHOUT CORRESPONDING PURCHASES . THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE S EEN THAT THE FACT THAT THE AMOUNT IS ALREADY CREDITED AS SALES A ND, THEREFORE, DOES NOT REPRESENT INCOME. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ASSESSEE IS IN THE BUSINESS OF POULTRY FARM AND THEREFORE, SELLING LIVESTOCK AFTER GROWING THE CHICKS. HE SUBMITTED THAT THE ASSESSEE WAS HAVING OPENING STOCK OF RS.32,000 AND HAS PURCHASED FEED AND HAS MADE A SALE AFTER GR OWING THE CHICKS AND THEREFORE, NO ADDITION ON THIS COUNT WAS CALLED FOR . 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REL IED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). SHE SUBMITTE D THAT THERE WAS A DIFFERENCE OF RS.80,356 IN THE STOCK AND THEREFORE, THE ADDITI ON MADE WAS JUSTIFIED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ASSESSEE WAS HAVING OPENING STOCK OF RS.32,000 AND HAS MADE PURCHASES OF FEED ON 5.4.2005 FOR RS.58,055 AND ON 7.4.2005 FOR RS.4,500 AND HAS MADE SALES OF RS.1,74,911 UPTO 10.4.2005. THE DIFFERENCE IN THE S TOCK AVAILABLE AND THE SALE FIGURE HAS BEEN EXPLAINED BY THE ASSESSEE BY STATIN G THAT THE ASSESSEE HAS PURCHASED/PROCURED CHICKS AND THEREAFTER, HAS SOLD AFTER GROWING THEM. THERE IS NO MATERIAL ON RECORD TO DISCREDIT THE EXPLANATION OF THE ASSESSEE. ACCORDINGLY, WE DELETE THE ADDITION MADE BY THE ASSESSING OFFICE R AND THE GROUND OF APPEAL NO.3 OF THE ASSESSEE IS ALLOWED. 8. GROUND OF APPEAL NO.4 OF THE ASSESSEE IS AS UN DER- 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN M AKING AN ADDITION OF RS.5,80,754/- BY APPLYING THE PROVISIONS OF SEC.40A (3) OF THE I.T. ACT. ITA NO.1470./HYD/10 SHRI N.KRISHNA REDDY, HYDERABAD. 3 9. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT OUT OF THE AMOUNT IN DISPUTE, THE ASSESSEE HAS MOSTLY MADE THE PAYMENTS PER ACCOUNT PAYEE CHEQUES AND THEREFORE, THE MATTER MAY BE REST ORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. THE LEARNED DEP ARTMENTAL REPRESENTATIVE HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. SHE RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT IT SHALL BE IN THE INTEREST S OF JUSTICE TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ITS CASE AND TO PROVE THAT SOME OF THE PAYMENTS DISALLOWED BY THE ASSESSING OFFICER UNDER S.40A(3) OF THE ACT WERE IN FACT, PAID BY ACCOUNT PAYEE CHEQUES/DRAFTS. ACCORD INGLY, THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REDECIDE THE SAME AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE SHALL BE AT LIBERTY TO FILE EVIDENCE IN SUPPORT OF ITS CASE BEFORE THE ASSESSING OFFICER. WE DIRECT ACCORDINGLY. 11. GROUND OF APPEAL NO.5 OF THE ASSESSEE IS AS U NDER- 5. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN L EVYING INTEREST U/S. 234B OF RS.62,649. 12. WE HAVE HEARD THE PARTIES. THIS GROUND IS MER ELY CONSEQUENTIAL AND HENCE, WE DIRECT THE ASSESSING OFFICER ACCORDINGLY. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13.5.2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 13 TH MAY, 2011 ITA NO.1470./HYD/10 SHRI N.KRISHNA REDDY, HYDERABAD. 4 COPY FORWARDED TO: 1. SHRI N.KRISHNA REDDY, C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3-6-643, ST. NO. 9, HIMAYATNAGAR, HYDERABAD 500029. 2. INCOME TAX OFFICER , WARD 4 ( 3 ), HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) V, HYDERABAD 4. COMMISSIONER OF INCOME TAX IV , HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S