G Vikram, Hyderabad V. DCIT, Hyderabad

ITA 1693/HYD/2008

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7509 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 25-11-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S RAMA RAO
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 143(3); 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1693/HYD/2008 ASSTT. YEAR: 2004-05 SRI G. VIKRAM, HYDERABAD. (PAN: ACWPG 4718 K) VS DCIT, CIR - 8(1), G. HYDERABAD. APPELLANT RESPONDENT APPELLANT BY : SRI S. RAMA RAO RESPONDENT BY : SRI B.V. PRASAD REDDY DATE OF HEARING : 01-03-2012. DATE OF PRONOUNCEMENT : -03-2012. ORDER PER SAKTIJIT DEY, J.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 15-2-2008 PASSED BY THE CIT (A)-III , HYDERABAD IN ITA NO.0327/DCIT CIR-8(1)/CIT(A)-III/0 5- 06 AND IT PERTAINS TO THE ASSESSMENT YEAR 2004-05. 2. THE APPEAL HAS BEEN FILED WITH THE DELAY OF 177 DAYS. THE APPELLANT HAS FILED AN APPLICATION BEFOR E US PRAYING FOR CONDONING THE SAID DELAY FOR THE REASON S STATED THEREIN. THE LEARNED AUTHORISED REPRESENTA TIVE FOR THE ASSESSEE FILED PAPERS BEFORE US CONTAINING PRESCRIPTIONS AND OTHER MEDICAL PAPERS IN SUPPORT O F HIS CONTENTION THAT THE ACCOUNTANT SRI VAHEED BASHA WAS ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 2 SUFFERING FROM SERIOUS HEART DISEASE AND WAS CONFIN ED TO BED. ULTIMATELY, THE ACCOUNTANT UNDER-WENT A CARDI AC AND CARDIOTHORACIC SURGERY. IN THIS CONTEXT, THE L EARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE INVITED O UR ATTENTION TO PAGE-14 OF THE PAPER BOOK AND SUBMITTE D THAT DUE TO THESE COMPELLING CIRCUMSTANCES, THE APP EAL COULD NOT BE FILED WITHIN THE TIME. 3. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE OBJECTED TO THE CONDONATION OF DELAY . AFTER CONSIDERING THE GROUNDS TAKEN FOR CONDONATION OF DELAY AND GOING THROUGH THE PAPERS SUBMITTED BEFORE US, WE ARE OF THE VIEW THAT THE APPELLANT WAS PREVENTED BY GENUINE AND SUFFICIENT CAUSE FROM FILING THE APPEAL WITHIN TIME. HENCE, WE CONDONE THE DELAY AND ADMIT THE AP PEAL ON MERIT FOR DISPOSAL. 4. IN THE PRESENT APPEAL WHICH RELATES TO THE ASSESSMENT YEAR 2004-05, THE ASSESSEE HAS FILED F IVE GROUNDS OUT OF WHICH GROUND NOS. 2,3 AND 4 ARE EFFE CTIVE GROUNDS AND THEY ARE REPRODUCED BELOW:- 1. THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.10,35,059/- MADE TOWARDS UNACCOUNTED PURCHASES BY APPLYING THE PROVISIONS OF SEC. 69 OF THE IT ACT. THE LD. CIT (A) OUGHT TO HAVE SEEN THAT THERE IS NO EVIDENCE TO THE EFFECT THAT THE PURCHASE CONSIDERATION WAS ACTUALLY PAID BY THE APPELLANT HEREIN. ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 3 2. THE LD. CIT (A) ERRED IN HOLDING THAT THERE IS ANY UNDISCLOSED SALE AND FURTHER ERRED IN ARRIVING AT THE INCO0ME FROM SUCH SALE AT 13% OF RS.5,35,363/- 3. THE LD. CIT (A) ERRED IN HOLDING THAT 10% OF THE EXPENDITURE CLAIMED UNDER VARIOUS HEADS IS NOT ALLOWABLE AS A DEDUCTION AND ACCORDINGLY, ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE OF RS.53,700/-. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PLYING OF TRANSPORT VEHI CLES. A SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 27-9-2005. DURING THE SURVEY OPERATIONS, CERTAIN DIARIES NUMBERED AS 23, 27 & 28 CONTAINED DETAILS OF TRANSACTIONS WORTH OF RS.2,68,06,253 MADE IN THE FINANCIAL YEAR 2003-04 W ERE FOUND. IN THE COURSE OF ASSESSMENT PROCEEDINGS UN DER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER IS SUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKING HIM TO REP LY AS TO WHY THE ENTRIES AMOUNTING TO RS.2,68,06,253/- FO UND IN THE DIARIES RECOVERED FROM HIS PREMISES SHALL NO T BE TREATED AS UNDISCLOSED RECEIPTS. THE ASSESSEE, IN HIS REPLY DATED 23-12-2006 SUBMITTED THAT THE DIARIES CONTAINED DETAILS OF PURCHASES, SALES, PAYMENTS, RE CEIPTS, ESTIMATES, QUOTATIONS, ENQUIRIES AND DRAWLS RIGHT F ROM INCEPTION TILL THE DATE OF SURVEYS. A STATEMENT WA S ALSO RECORDED FROM THE ASSESSEE ON 26-12-2006 IN THE COU RSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER AFTER VERIFYING THE ENTRIES IN THE DIARIES WITH THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE FOUND THAT AS P ER ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 4 THE IMPOUNDED DIARIES, THE TOTAL PURCHASES OF THE ASSESSEE DURING THE FINANCIAL YEAR 2003-04 WERE RS.45,96,858/-. HOWEVER, IN THE TRADING ACCOUNT AS PER THE BOOKS OF THE ASSESSEE, PURCHASES HAVE BEEN SHOW N AT RS.30,26,436/-. THE ASSESSING OFFICER THEREFORE T REATED THE DIFFERENTIAL AMOUNT OF RS.15,70,422/- AS UNACCO UNTED PURCHASES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. SIMILARLY, WHILE COMPARING THE FIGURES CONTAINED IN THE DIARIES IN THE BOOKS OF ACCOUNTS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS SHOWN A SALE OF RS.33,20,588/- IN THE TRADING ACCOUNT AGAIN ST THE ACTUAL SALES OF RS.38,58,951/- AS FOUND IN THE DIAR IES. THE ASSESSING OFFICER TREATED THE DIFFERENTIAL AMOU NT OF RS.5,35,363/- AS UNACCOUNTED SALES OF THE ASSESSEE AND ESTIMATED THE GROSS PROFIT AT 13% ON THE UNACCOUNTE D SALES AND ADDED AN AMOUNT OF RS.69,597/-. THE ASSESSING OFFICER ALSO DISALLOWED 20% OF THE TOTAL EXPENSES CLAIMED ON AN ESTIMATE BASIS AND ADDED BAC K AN AMOUNT OF RS.1,07,399/-. THE ASSESSEE THEREAFT ER FILED AN APPEAL BEFORE THE CIT (A)-III, HYDERABAD. THE CIT (A) WHILE DISPOSING OF THE APPEAL ALLOWED SET OFF OF THE UNACCOUNTED SALES OF RS.5,35,363/- AGAINST THE UNACCOUNTED PURCHASES OF RS.15,70,422/- AND RESTRIC TED THE ADDITION UNDER SECTION 69 OF THE ACT TO RS.10,3 5,069/- THE CIT (A) HOWEVER SUSTAINED THE ADDITION OF RS.69,597/- BY APPLYING 13% GP. SO FAR AS THE DISALLOWANCE OF EXPENDITURE IS CONCERNED, THE CIT ( A) HELD THE DISALLOWANCES AT 10% OF THE EXPENDITURE CLAIMED AND REDUCED THE ADDITION TO RS.53,703/-. ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 5 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE IN THE COURSE OF HIS ARGUMENT INVITED OUR ATTENTION TO A STATEMENT AT PAGE-39 OF THE PAPER BO OK WHICH CLAIMED TO HAVE BEEN FILED BEFORE THE CIT (A) DURING THE APPEAL HEARING. REFERRING TO THE AFORES AID STATEMENTS, THE LEARNED AR OF THE ASSESSEE SUBMITTE D THAT THE ASSESSING OFFICER HAS NOT CONSIDERED FIGUR ES TO THE TUNE OF RS.11,56,782/- WHICH ARE VERY MUCH MENTIONED IN THE DIARIES RECOVERED DURING THE SURV EY OPERATION AND THE SAME ARE PLACED AT PAGES 1 TO 24 OF THE PAPER BOOK. ACCORDING TO THE LEARNED AR OF TH E ASSESSEE, IF ALL THE ENTRIES MENTIONED IN THE STATE MENT AT PAGE-39 OF THE PAPER BOOK ARE TO BE CONSIDERED, THE N THERE WILL BE NO UNACCOUNTED PURCHASES OR SALES AS FOUND BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSEE HAVING ADM ITTED THE ABOVE FIGURES MENTIONED IN THE DIARIES RECORDED IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ADDITION MADE UNDER SECTION 69 OF THE ACT IS JUSTIFIED. 8. WE HAVE HEARD RIVAL SUBMISSIONS OF THE PARTIES A ND PERUSED THE MATERIAL AVAILABLE ON RECORD. AFTER GO ING THROUGH THE ORDER PASSED BY THE CIT (A), WE FIND TH AT THE CIT (A) HAS NOT DEALT WITH OR CONSIDERED THE STATEM ENT SUBMITTED BEFORE HIM BY THE ASSESSEE WHICH IS AT PA GE-39 OF THE PAPER BOOK. WHEN THE ASSESSEE HAS SPECIFICA LLY RAISED THIS ISSUE BEFORE HATE CIT (A), GIVING DETAI LS OF ENTRIES MADE IN THE IMPOUNDED DIARIES WHICH HAVE NO T BEEN CONSIDERED BY THE ASSESSING OFFICER, THE CIT ( A) ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 6 SHOULD HAVE EITHER TAKEN UP THE EXERCISE HIMSELF OR CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER TO F IND OUT AS TO WHETHER ALL THE ENTRIES IN THE DIARIES HAVE B EEN PROPERLY CONSIDERED WHILE CALCULATING THE TOTAL PUR CHASES AND SALES MENTIONED IN THE IMPOUNDED DIARIES. IF T HE CONTENTIONS OF THE ASSESSEE ARE FOUND TO BE CORRECT , THEN NO ADDITION COULD HAVE BEEN MADE UNDER SECTION 69 O F THE ACT BASING UPON THE PURCHASES AND SALES FIGURES COMPUTED BY THE ASSESSING OFFICER. IN THE AFORESAI D FACTS AND THE CIRCUMSTANCES OF THE CASE, WE THINK IT JUST AND PROPER TO SET ASIDE THIS ISSUE IN SO FAR AS IT RELA TES TO THE ADDITION OF RS.10,35,059/- UNDER SECTION 69 OF THE ACT IS CONCERNED TO THE FILE OF THE CIT (A). THE CIT (A) SHOULD DO WELL TO VERIFY THE ENTRIES MENTIONED IN THE STAT EMENT FURNISHED BY THE ASSESSEE APPEARING AT PAGE-39 OF T HE PAPER BOOK WITH THE ENTRIES MADE IN THE IMPOUNDED DIARIES TO FIND OUT WHETHER SUCH ENTRIES HAVE ACTUA LLY BEEN LEFT OUT AND NOT CONSIDERED BY THE ASSESSING O FFICER WHILE CALCULATING PURCHASE AND SALES FIGURES IN THE ASSESSMENT ORDER. THE CIT (A), IF HE MAY SO LIKE, MAY CALL FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON THIS ISSUE. NEEDLESS TO SAY THE CIT (A) SHOULD AFFORD A N OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE. HENCE GROUND NO.2 IS DECIDED ACCORDINGLY. 8. SINCE GROUND NO.3 IS INTER-LINKED WITH THE GROUN D NO.2 MENTIONED ABOVE, IT IS ALSO SET ASIDE TO THE F ILE OF THE CIT (A) FOR FRESH ADJUDICATION. ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 7 9. SO FAR AS GROUND NO.4 IS CONCERNED, THIS RELATES TO DISALLOWANCE OF EXPENSES AMOUNTING TO RS.53,700/-. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS DISAL LOWED 20% OF THE EXPENSES ON AN ESTIMATE BASIS. THE CIT (A) HAS RESTRICTED THE SAME TO 10% OF THE TOTAL EXPENSE S CLAIMED. CONSIDERING THE NATURE OF EXPENSES CLAIME D AND TAKING INTO ACCOUNT THE TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE, WE THINK IT PROPER TO DI SALLOW AN AMOUNT OF RS.25,000/- FROM THE EXPENSES CLAIMED BY THE ASSESSEE. TO SUM UP, GROUND NOS. 2 AND 3 ARE S ET ASIDE TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICA TION AND GROUND NO.4 IS ALLOWED IN PART. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 07 -03-201 2. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY) JUDICIAL MEMBER DATED THE 7 TH MARCH, 2012. COPY FORWARDED TO: 1. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.103, INDIRADEVI NILAYAM, STREET NO.7, HIMAYATNAGAR, HYDERABAD., 2. DCIT, CIR-8(1), HYDERABAD. 3. CIT (A)-III, HYDERABAD. 4. THE CIT CONCERNED, HYDERABAD 5. THE DR, ITAT, HYDERABAD JMR* ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 8 ITA NO.1693/HYD/08 G. VIKRAM, HYDERABAD. =============================== 9