Sri krishna Jewellers Private Limited , Hyderabad V. Dy. Commissioner of Income Tax , Circle-3(2), Hyderabad

ITA 1807/Hyd/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7572 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 07-01-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 16-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 142(1); 143(1); 192; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1807/HYD/2019 ASSESSMENT YEAR: 2016-17 SRI KRISHNA JEWELLERS PRIVATE LIMITED, HYDERABAD [PAN: AASCS4373H] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.C.DEVDAS, AR FOR REVENUE : SHRI ROHIT MUJUMDAR, DR DATE OF HEARING : 07-01-2021 DATE OF PRONOUNCEMENT : 20-01-2021 O R D E R PER BENCH : THIS ASSESSEES APPEAL FOR AY.2016-17 ARISES FROM TH E CIT(A)-3, HYDERABADS ORDER DATED 25-10-2019 PASSED IN CASE NO.10162/DCIT-3(2)/HYD/CIT(A)-3/2018-19, IN PROCEED INGS U/S.143(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE ISSUE THAT ARISES F OR APT ADJUDICATION IN THE INSTANT CASE IS THAT OF CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION ESTIMATING NET PROFIT OF THE ASSESSEE IN JEWELLERY BUSINESS @ 3.40%, THEREBY REJE CTING ITS BOOKS OF ACCOUNTS. ITA NO. 1807/HYD/2019 :- 2 -: 2.1. WE NOTICE FROM A PERUSAL OF THE ASSESSMENT 21-12- 2018 THAT THE ASSESSING OFFICER HAD TAKEN NOTE OF THE DEPARTME NTS SURVEY ACTION DT.23-09-2011. THE ASSESSEES DIRECTOR HAD ALLEGEDLY AGREED TO DECLARE NET INCOME OF RS.2.70 CRO RE. PAGES NOS.2 TO 5 OF THIS ASSESSMENT ORDER REVEALS THAT SINCE T HE ASSESSEE HAD NOT DISCLOSED ITS INCOME OF RS.1,98,95,0 40/- ONLY @ 2.02% OF THE TURNOVER. 2.2. THE ASSESSING OFFICER PUT THE ASSESSEE ON SHOW CAUSE AND THEREAFTER REJECTED THE BOOKS MAINLY ON THE GROUND THAT IT HAD NOT MAINTAINED THE AUTHENTICATED RECORD OF SALE EXCHANGED THE OLD GOLD SOLD EARLIER AND ALSO THAT IT FA ILED TO VERIFY REPAIRS/MAINTENANCE ETC. SINCE THE CORRESPONDI NG VOUCHERS WERE SELF-ATTESTED ONLY. 3. BOTH THE LOWER REPRESENTATIVES REITERATE THEIR RESPECTI VE STANDS AGAINST AND IN SUPPORT OF THE IMPUGNED ADDITION D URING THE COURSE OF HEARING. THE ASSESSEE HAS ALSO FILED A DATA SHEET, A PAPER BOOK RUNNING INTO 192 PAGES INTER ALIA CONTAINING : COMPUTATION SHEET, SECTION 142(1) NOTICE WIT H REPLY, LETTER DT.05-10-2018 BEFORE THE ASSESSING OFFIC ER, SECTION 142(1) NOTICE DT.20-11-2018 WITH REPLY, SECTI ON 142(1) NOTICE DT.03-12-2018 WITH REPLY, COPY OF INCOME TAX RE TURN ALONG WITH COMPUTATION, FORMS 3CA AND 3CD, COPY OF AN NUAL REPORT WITH AUDITED FINANCIALS AND AUDIT REPORT, COMPARA TIVE STATEMENT OF TURNOVER AND GROSS PROFIT RATE FROM AYS.201 5-16 TO 2018-19, SECTION 143(1) INTIMATION FOR AY.2015-16 & 2018- 19, SECTION 143(3) ASSESSMENT ORDER FOR AY.2017-18 AN D ITS DIRECTORS STATEMENT DT.23-09-2016 RECORDED DURING THE SURVEY, FOLLOWED BY A COMPILATION OF CASE RECORDS. WE TAKE DUE ITA NO. 1807/HYD/2019 :- 3 -: NOTE THEREOF AND OBSERVE THAT THE DEPARTMENT HAS FAILED TO COLLECT ANY MATERIAL AGAINST THE ASSESSEE; RIGHT FROM SU RVEY TILL ASSESSMENT, WHICH COULD SUGGEST THAT ITS BOOK RESULTS D O NOT REFLECT TRUE STATE OF THE BUSINESS IN ANY MANNER; WHATS OEVER. THE CBDTS LANDMARK CIRCULAR(S) DT.10-03-2003; AS RE ITERATED ON 18-12-2014, MAKES IT CLEAR THAT SUCH ADMISSIONS MA DE DURING THE COURSE OF A SEARCH OR SURVEY DO NOT HOLD ANY SIGNIFICANCE IN ABSENCE OF THE SUPPORTIVE MATERIAL FOU ND OR SEIZED. COUPLED WITH THIS, THE ASSESSING OFFICER HAS F AILED TO REFER TO ANY PARTICULAR SHORTFALL REGARDING SALE/EXCHA NGE OF OLD GOLD SALES/PURCHASES BILLS FORMING PART OF RECORD. H E HAD ALSO NOT SOUGHT TO VERIFY THE ALLEGED SELF-ATTESTED VOUCHERS CORRECTNESS FROM PAYEES END AS WELL. WE THUS QUOTE ( 2020) [425 ITR 673] (KARNATAKA) CIT VS. BANJARA DEVELOPERS AND CONSTRUCTIONS PVT. LTD., AND CIT VS. BILAHARI INVESTMENT (P) LTD., (2008) [299 ITR 1] (SC) AND CONCLUDE THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW AND ON F ACTS IN REJECTING ASSESSEES CONSISTENT METHOD OF MAINTAINING BOOKS OF ACCOUNTS THEREBY ESTIMATING ITS NET PROFIT @3.4% RESULTI NG IN THE IMPUGNED CONSEQUENTIAL ADDITION. THE SAME IS DIRE CTED TO BE DELETED THEREFORE. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.GO DARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 20-01-2021 TNMM ITA NO. 1807/HYD/2019 :- 4 -: COPY TO : 1.SRI KRISHNA JEWELLERS PRIVATE LIMITED, 8-2-626/2, SRI KRISHNA HOUSE, 2 ND FLOOR, ROAD NO.10, BANJARA HILLS, HYDERABAD. 2.THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(2 ), HYDERABAD. 3.CIT(APPEALS)-3, HYDERABAD. 4.PR.CIT-3, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.