Anagha Surface Transport Private Limited, Hyderabad V. DY.CIT, Cir-1(1), Hyderabad

ITA 1779/HYD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74460 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 10-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JEEVAN LAL LAVADIYA
• Assessee Lawyers: S RAMA RAO
• Keywords: Business income; Depreciation; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1779/HYD/12 : ASSTT. YEAR 2009 - 10 M/S. ANAGH A SURFACE TRANSPORT PVT. LTD., HYDERABAD ( PAN - AADCA 2036 J) V/S. DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 9, HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI JEEVANLAL LAVADIYA DR DATE OF HEARING 7.1.2014 DATE OF PRONOUNCEMENT 07.1.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX( APPEALS) II, HYDERABAD, DATED 14.09.2012 FOR THE ASSESSMENT YEAR 2009 - 10. 2. AT THE OUTSET, IT MAY BE NOTED THAT THERE IS A DELAY OF THREE DAYS IN THE FILING OF THIS APPEAL BY THE ASSESSEE. A PETITION SEEKING CONDONATION OF DELAY HAS BEEN FILED, EXPLAINING THE DELAY AS HAVING ARISEN ON ACCOUNT OF SICKNESS OF MANAGING DIR E CTOR OF THE ASSESSEE COMPANY, WHO WAS SUFFERING FROM VIRAL FEVER DURING THE PERIOD FROM 4.12.2012 TO 7.12.2012 AND WAS NOT IN A POSITION TO TRAVEL TO HYDERABA D FOR SIGNING THE APP EAL PAPERS, AND THE WEEK - END HOLIDAYS THAT FELL ON 8.12.2012 AND 9.12.2012, BEING SATURDAY AND SUN D AY. WE ARE CONVINCED WITH THE REASONABLENESS O F THE CAUSE FOR THE DELAY. WE ACCORDINGLY CONDONE THE SAME AND PROCEED TO DISPOSE OF THE APPEAL ON MERITS. 3. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE REJECTION OF BOOK RESULTS AND MAKING ESTIMATED ADDITION TO THE INCOME FROM I TA NO. 1779 / HYD/2012 M/S. ANAGHA SURFACE TRANSPORT PVT. LTD., HYD ERABAD 2 BUSINESS DISCLOSED BY THE ASSESSEE, BESIDES MAKING SEPARATE ADDITION ON ACCOUNT OF INTEREST. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS A COMPA N Y IN WHICH PUBLIC ARE NOT SUBSTANTIALLY INTERESTED AND I S ENGAGED IN TRANSPO R T CONTRACT BUSINESS, BESIDES TRADING IN PETROL, DIESEL AND OTHER PRO D U C TS. ASSESSEE HAS FIELD E - RETURN OF INCOME FOR THE ASSESSME NT YEAR 2009 - 10 ON 24.9.2009 ADMITTING T OTAL INCOME OF R S .75,94,266. THE ASSESSING OFFICER, R EJ E C TIN G THE BOOK RESULTS, ESTIMATED THE INCOME FROM TRANSPORT CONTRACTS AT 8% OF THE TURNOVER CLEAR OF DEPRECIATION FOLLO W IN G THE ORDER OF THE CIT(A) II, IN THE EARLIER ASSESSMENT YEARS , WHICH, INCLUDING THE PROFITS FROM SALE OF TYRES, WORKED OUT TO RS.1,53,41,752. HE ALSO ESTIMATED THE INCOME FROM THE PETROL BUNK BUSINESS AT 2% OF THE TURNOVER, WHICH WORKED OUT TO R S .18,81,365, AND ALSO SEPARATELY ADDED RS.49,912 BEING INTEREST CREDITED IN THE BOOK S OF ACCOUNT. WITH THE ADDITIONS M ADE ON THESE COUNTS, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF R S .1,72,27 , 030, VIDE ORDER O F ASSESSMENT DATED 30.12.2011 PASSED UNDER S.143(3) OF TH E INCOM E - TAX ACT, 1961. 5. ON APPEAL, THE CIT(A) FOLLOWING HIS APPELLATE ORD E RS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, U P HELD THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE INCOME FROM TRANSPORT BUSIN E S S AT 8% OF THE GROSS RECEIPTS CLEAR OFF DEPRECIATION. HE ALSO UPHELD THE ACTION OF THE ASSESSING OFFICER IN APPLYING THE VERY SAME RATE OF 8% EVEN IN RESPECT OF SALE PROCEEDS OF TYRES; AND ESTIMATION OF INCOME FROM PETROL BUNK APPLYING A RATE OF 2%; AND MAKING SEPARATE ADDITION OF RS.49,912 ON ACCOUNT OF INCOME BY WAY OF INTEREST. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE PREFERRED THIS SECOND APPEAL BEFORE US, WITH THE FOLLOWING GROUNDS - 1) THE O R DER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) I S ERRONEOUS BOTH ON FACTS AND IN LAW. I TA NO. 1779 / HYD/2012 M/S. ANAGHA SURFACE TRANSPORT PVT. LTD., HYD ERABAD 3 2) THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CON F IRMIN G TH E ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS O F ACCOUN T WHEN THE APPELLANT MAINTAINED PROPER BOOK S OF ACCOUNT. 3) THE COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CON F I RM IN G THE ESTIMATION OF IN C OM E FROM TRANSPO R T BUSIN E SS AT 8% WITHOUT CONSIDERING THE FACT THAT PROPER BOOK S OF ACCOUNT WERE MAIN T AINED AND THE RATE ADOPTED BY THE ASSESSING OFFICER IS TOO HIGH IN THE LIN E OF THE BUSINESS. 4) THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CONFIRMING THE ASSESSING OFFICER IN RESORTING TO ESTIM A TION OF INCOME FROM SALE OF TYRES AND FURTHER ERRED IN CON F IRMIN G THE RATE OF PROFIT AT 8%. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE TYRES WERE CONSUMED BY THE APPELLANT FOR ITS OWN BUSINESS PURPOSES AND, THER EF ORE , NO PROFIT IS ATTRIBUTABLE. 5) THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CONFIRMING THE ES T IM A TION OF INCOME FROM PETROL BUNK MADE BY THE ASSESSING OFFICER AT 2% WITHOUT CONSIDERING THE FACT THAT THE APPELLANT MAINTAINED PROPER BOOKS OF ACCOUN T AND THE OILS WERE CONSUMED BY THE APPELLANT ITSELF. 6) THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN NOT ALLOWIN G DE D UC T ION OF FINANCE CHARGES AND THE DEPRECIATION CLAIM E D WHEN AN ESTIMATION OF INCOME IS RESORTED TO. 7) THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN CONFIRMIN G TH E AC T ION OF THE ASSESSING OFFICER IN SEPARATELY ADD I NG RS.49,912/ - REPRESENTING THE INTEREST INCOM E WHEN THE BU S IN E SS INCOME IS ESTIM A TED. 8) .. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE ISSUES REL A TING TO ESTIMATION OF INCOME FROM TRANSPORT AND PETROL BUNK BUSINESS OF THE ASSESSEE, AND SEPARATE ADD ITIONS MADE TOWARDS DEPRECIATION AND OTHER INCOME NOTWITHSTANDING THE ESTIMATION OF BUSINESS INCOME, WERE SUBJECT MATTER OF APPEAL BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, AND THE TRIBUNAL, VIDE ITS ORDER DATED 11.3.2013 IN ITA NOS.8 AND 9/HYD/2012, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES FOR THOSE YEARS AND RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION AND DISPOSAL. COPY OF THE SAID ORDER OF THE TRIBUNAL IS ALSO FURNISH ED BEFORE US. WE FIND THAT THE ISSUES INVOLVED IN THIS APPEAL ARE COVERED BY THE SAID DECISION OF THE TRIBUNAL FOR EARLIER YEARS. WE , OF COURSE, FIND SLIGHT I TA NO. 1779 / HYD/2012 M/S. ANAGHA SURFACE TRANSPORT PVT. LTD., HYD ERABAD 4 MATERIAL DIFFERENCE IN THE FACT UAL BACKGROUND IN THE YEAR UNDER APPEAL, INASMUCH AS THE ASSESSEE PRODUCED BOOKS OF ACCOUNT BEFORE THE REVENUE AUTHORITIES IN THE COURSE OF PROCEEDINGS FOR ASSESSMENT YEAR 2009 - 10 , WHEREAS THE SAME WERE NOT PRODUCED BEFORE THE REVENUE AUTHORITIES FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, AND FOR THAT REASON THE TRIBUN AL S E T ASIDE THE MATTERS FOR THOSE YEARS TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO THE ASSESSING OFFICER TO GIVE OPPORTUNITY TO THE ASSESSEE TO FURNISH THE BOOKS AND THEN REDECIDE THE MATTERS, AFTER EXAMINING SUCH BOOKS, IF PRODUCED, IN AC CORDANCE WITH LAW. STILL, IN VIEW OF THE FACT THAT THE IMPUGNED ORDER OF THE CIT(A) IS BASED ON THE APPELLATE ORDERS PASSED BY HIM FOR TH E ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 WHICH WERE SET ASIDE BY THE TRIBUNAL AS NOTED ABOVE, AND ALSO SINCE THE MATTE RS FOR THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 ARE BEFORE THE ASSESSING OFFICER FOR RECONSIDERATION AS PER THE DIRECTIONS OF THE TRIBUNAL, CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE IMPUGNED ORDER O F THE CIT(A) AN REST ORE THE MATTER FOR THIS YEAR ALSO TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO REFRAME THE ASSESSMENT IN CONSONANCE WITH THE VIEW THAT MAY BE TAKEN FOR THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, ON VARIOUS ISSUES INVOLVED IN ALL THESE YEARS. HE SHALL OF COURSE, GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE MAKING THE ASSESSMENT AFRESH IN ACCORDANCE WITH LAW. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 7.1.2014 SD/ - SD/ - ( C HANDRA POOJARI ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 7 T H JANUARY, 2014 I TA NO. 1779 / HYD/2012 M/S. ANAGHA SURFACE TRANSPORT PVT. LTD., HYD ERABAD 5 COPY FORWARDED TO: 1. M/S. ANAGHA SURFACE TRANSPORT PVT. LTD., C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 . DY. COMMISSIONER OF INCOME - TAX, CIRCLE 1(1) , HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD 4. COMMISSIONER OF INCOME - TAX I HYDERABAD 5. DEPARTMENTAL REPR ESENTATIVE, ITAT, HYDERABAD. B.V.S