Kotameedi Hussain Basha , Allagadda V. Income Tax Officer, Ward-1, Nandyal

ITA 1681/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6428 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-03-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 15-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 80C; 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1681/HYD/2019 A.Y. 2011 - 12 KOTAMEEDI HUSSAIN BASHA, KURNOOL, ANDHRA PRADESH 518533. PAN: AEKPH 5607 N VS. THE INCOME TAX OFFICER, WARD - 1, NANDYAL. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI K.C. DEVDAS REVENUE BY: SHRI M.N. MURTHY NAIK, DR DATE OF HEARING: 11/03/2021 DATE OF PRONOUNCEMENT: 16 /04/2021 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), KURNOOL IN APPEAL NO. 10306/CIT(A) - KNL/2018 - 19, DATED 05/08/2019 PASSED U/S. 143(3) R.W.S 147 OF THE ACT FOR THE A.Y. 2011 - 12. 2. THE ASSESSEE HAS RAISED SEVEN GROUNDS IN HIS APPEA L AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: - 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS IN LAW AS WELL AS FACTS OF THE CASE. 2. THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE APPELLANT WITHOUT ALLOWING PROPER /SUFFICIENT OPPORTUNITY TO THE APP ELLANT. 3. THE HONBLE CIT(A) OUGHT TO HAVE OBSERVE D THAT THE ASSESSING OFFICER PROCEEDED T CONCLUDE THAT THE ASSESSEE EFFECTED PURCHASES TO THE TUNE OF RS. 4.77 CRS DURING THE 2 ACCOUNTING YEAR WITHOUT ANY BASIS AND THEREFORE SUCH CONCLUSION IS NOT SUSTAINA BLE. 4. WITHOUT PREJUDICE TO THE ABOVE, THE HONBLE CIT(A) OUGHT TO HAVE OBSERVED THAT ESTIMATION OF PROFIT @ 7.5% ON TOTAL PURCHASE IS NOT SUPPORTED BY ANY MATERIAL ON RECORD AND THEREFORE OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER FOR DELETION OF THE SAME. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE INCOME FROM BUSINESS COMPUTED BY THE A.O. AT RS. 35,75,304/ - IS WITHOUT ANY BASIS OR SUPPORTING EVIDENCE AND THEREFORE THE SAME IS LIABLE TO BE DELETED AND THE HONBLE CIT(A) OUGHT TO HAVE DIRECT ED THE A.O. FOR DELETION OF THE SAME. 6. THE HONBLE CIT(A) OUGHT TO HAVE DIRECTED FOR ALLOWING CLAIM U/S. 80C AS THE SAME WAS SUPPORTED BY PROPER VOUCHER. 7. THE HONBLE CIT(A) OUGHT TO HAVE DIRECTED THE A.O. TO DELETE THE ADDITION OF RS. 1,50,000/ - MADE UNDER THE HEAD OTHER SOURCES IGNORING THE CLAIM OF THE ASSESSEE THAT THE SAME WAS DERIVED FROM AGRICULTURE (THOUGH THE ASSESSEE DECLARED RS. 1 LAKH ONLY AS AGRICULTURE INCOME THE ASSESSING OFFICER MADE THE ADDITION OF RS. 1,50,000/ - . 8. ANY OTHER GROUND WILL BE RAISED AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF POULTRY FILED HIS ORIGINAL RETURN OF INCOME FOR THE AY 2011 - 12 ON 17/6/2011 DECLARING INCOME OF RS. 2,29,950/ - . THEREAFTER I T WAS NOTICED BY THE DDIT (INV.), UNIT - 1(4), PUNE THAT THE ASSESSEE HAS PURCHASED POULTRY PRODUCTS / BIRDS FROM M/S. VENKEY S GROUP FOR RS. 4,77,24,055/ - DURING THE RELEVANT ASSESSMENT YEAR . I T WAS ALSO REVEALED FROM THE RETURN OF INCOME THAT THE ASSESSEES POULTRY PURCHASE WAS ONLY RS. 43,88,600/ - . THEREFORE, NOTICE U/S. 148 OF THE ACT WAS ISSUED TO THE ASSESSEE . S UBSEQUENTLY T HE LD. AO COMPLETED THE ASSESSMENT U/S. 143(3) R.W.S 147 OF THE ACT ON 18/12/2018 WHEREIN THE LD. AO ESTIMATED THE INCOME OF THE ASSESSEE AT 7.5% ON THE PURCHASES OF RS. 4,77,24,055/ - WHICH WORKS OUT TO RS. 3 5,75,305/ - AS THE ASSESSEE HAD FAILED TO MAINTAI N ITS BOOKS OF ACCOUNT AND EXPLAIN THE 3 DIFFERENCE BETWEEN THE PURCHASES DECLARED IN HIS RETURN OF INCOME AND THE ACTUAL PURCHASE . THE LD. AO ALSO MADE AN ADDITION OF RS. 1,52,000/ - UNDER THE HEAD INCOME FROM OTHER SOURCES AND DISALLOWED THE CLAIM OF DEDUCTION U/S. 80C OF THE ACT FOR RS. 1,00,000/ - AS THE ASSESSEE HAS FAILED TO PRODUCE THE EVIDENCE FOR PAYMENT OF INSURANCE PREMIUM. ON APPEAL, THE LD. CIT (A) CONFIRMED THE ORDER OF T HE LD. AO SINCE THE ASSESSEE COULD NOT PROVIDE ANY EXPLANATION FOR DELETING THE ADDITION MADE BY THE LD. AO. 4. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD. AO FOR FRESH CONSIDERATION BECAUSE TH E ASSESSEE IS NOW ABLE TO PRODUCE THE REQUISITE EVIDENCE FOR DELETING THE ADDITION MADE BY HIM. THE LD. AR FURTHER SUBMITTED THAT THE MARGIN OF PROFIT EARNED BY THE ASSESSEE IN THIS TRADE IS EXCEPTIONALLY LOW AND IF THE ADDITION MADE BY THE LD. AO IS SUSTA INED , IRREPARABLE LOSS WILL BE INFLICTED ON THE ASSESSEE. THE LD. DR VEHEMENTLY OPPOSED TO THE SUBMISSION OF LD. AR AND PRAYED FOR CONFIRMING THE ORDER OF THE LD. REVENUE AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERI ALS ON RECORD. FROM THE FACTS OF THE CASE , IT IS APPARENT THAT THE ASSESSEE HAS NOT MAINTAINED HIS BOOKS OF ACCOUNTS PROPERLY DUE TO WHICH THE LD. REVENUE AUTHORITIES HAD LEFT WITH NO OTHER OPTION BUT TO 4 ESTIMATE THE INCOME OF THE ASSESSEE BASED ON HIS TU RNOVER. NOW SINCE THE LD. AR HAS COME UP WITH THE PLEA THAT THE ASSESSEE IS IN A POSITION TO PRODUCE ALL THE REQUISITE MATERIALS BEFORE THE REVENUE TO ESTABLISH THE GENUINENESS OF THE PROFIT DECLARED IN HIS RETURNED INCOME AND CONSIDERING THE NATURE OF THE BUSINESS OF THE ASSESSEE, IN THE INTEREST OF JUSTICE, I HEREBY REMIT THE ENTIRE MATTER BACK TO THE FILE OF THE LD. AO FOR FRESH CONSIDERATION. I ALSO HEREBY DIRECT THE ASSESSEE AND HIS REPRESENTATIVE TO PROMPTLY COOPERATE BEF ORE THE LD. REVENUE AUTHORITIES IN THEIR PROCEEDINGS FAILING WHICH THEY SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW AND MERITS BASED ON THE MATERIALS ON RECORD. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. PRONOUNCED IN THE OPEN COURT ON THE 16 TH APRIL, 2021. S D/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 16 TH APRIL, 2021. OKK COPY TO: - 1) KOTAMEEDI HUSSAIN BASHA C/O. B. NARSING RAO & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO. 92, JUBILEE HILLS, HYDERABAD 500 096. 5 2) OFFICE OF THE INCOME TAX OFFICER, WARD - 1, SANJEEVA NAGAR, NANDYAL. 3) THE CIT (A), KURNOOL 4) THE PR. CIT, KURNOOL. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE