Sreenivas Kotla , Hyderabad V. Asst. Commissioner of Income Tax, Circle-4(1), Hyderabad

ITA 1817/Hyd/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7508 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 20-08-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 10-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM BABU
• Keywords: Income from undisclosed sources; FORM 26AS
• Section: 143(3); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO.1817/HYD/2018 ASSESSMENT YEAR:2015 - 16 SREENIVAS KOTLA, HYDERABAD. PAN: ATAPK 1572 G VS. ACIT, CIRCLE - 4(1), IT TOWERS, MASABTANK, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI A.V. RAGHU RAM REVENUE BY: SHRI RAMBABU, DR DATE OF HEARING: 20 /08/2020 DATE OF PRONOUNCEMENT: 01 /09/2020 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 1, HYDERABAD IN APPEAL NO.0278/CIT(A) - 1, HYD/2017 - 18/2018 - 19, DATED 11/07 /2018 PASSED U/S. 143(3) R.W.S 250(6) FOR THE AY 2015 - 16. 2. THE ASSESSEE HAS RAISED FOUR GROUNDS IN HIS APPEAL, HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD. AO WHO HAD ADDED THE SERVICE TAX COLLECTED AND REMITTED TO THE GOVERNMENT TREASURY BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE RELYING ON THE FORM 26AS. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF SUPPLYING MANPOWER UNDER THE NAME AND STYLE OF M/S NAKSHATRA HOUSE - KEEPING SERVICES. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY 2015 - 16 ON 30/09/2015 DECLARING HIS TOTAL INCOME AS RS. 74,97,310/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 27/12/2017 WHEREIN THE LD. AO MADE ADDITION OF RS.50,24,475/ - AS THE UNACCOUNTED INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT (A) CONFIRMED THE ORDER OF THE LD. AO. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. AO THAT THE ASSESSEE HAS DECLARED HIS TURNOVER A S RS. 5,25,92,355/ - . HOWEVER, IT WAS REVEALED FROM FORM 26AS THAT THE TURNOVER OF THE ASSESSEE WAS RS. 5,76,74,833/ - . SINCE, THE ASSESSEE DID NOT RECONCILE THE DIFFERENCE, THE LD. AO TREATED THE SAME AS THE UNACCOUNTED REVENUE AND ADDED TO THE INCOME OF THE ASSESSEE WHICH WORKS OUT TO RS. 50,82,478/ - . ON APPEAL, THE LD. CIT (A) CONFIRMED THE ORDER OF THE LD. AO BECAUSE THE ASSESSEE DID NOT PRODUCE A NY DOCUMENTARY EVIDENCE TO SUPPORT HIS STAND. 5. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT ONE MORE OPPORTUNITY MAY BE PROVIDED TO THE ASSESSEE TO PRODUCE THE DOCUMENTARY EVIDENCE BEFORE THE LD. REVENUE AUTHORITIES OTHERWISE, IT WILL LEAD TO MI SCARRIAGE OF JUSTICE BECAUSE, FACTUALLY THE DIFFERENCE AMOUNT OF RS. 50,82,478/ - WAS THE SERVICE TAX COLLECTED FROM THE CLIENTS OF THE ASSESSEE AND REMITTED TO THE GOVERNMENT TREASURY. THEREFORE, THE AMOUNT OF RS. 50,82,478/ - DOES NOT CONSTITUTE TURNOVER OF THE ASSESSEE. THE LD. DR THOUGH 3 VEHEMENTLY OBJECTED TO THE SUBMISSIONS OF THE LD. AR, FINALLY CONCEDED TO THE REQUEST OF THE LD. AR. 6. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY PERUSED THE MATERIALS ON RECORD. KEEPING IN VIEW THE FACTS AND CI RCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER IS REQUIRED TO BE REMITTED BACK TO THE FILE OF LD. AO FOR FRESH CONSIDERATION BECAUSE IF THE CLAIM OF THE ASSESSEE IS TRUE THAT THE AMOUNT OF RS. 50,82,478/ - IS THE SERVICE TAX COLLECTE D BY THE ASSESSEE FROM HIS CLIENTS AND REMITTED TO THE GOVERNMENT TREASURY, THEN IT CANNOT BE TREATED AS THE TURNOVER OF THE ASSESSEE AND THE ADDITION MADE BY THE LD. AO WHICH IS FURTHER CONFIRMED BY THE LD. CIT (A) WILL BE ERRONEOUS. THEREFORE, IN THE IN TEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. AO FOR FRESH CONSIDERATION AND TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH MERIT AND LAW KEEPING IN VIEW OF OUR OBSERVATION STATED HEREIN ABOVE. IT IS ORDERED ACCORDINGLY. 7. IN T HE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE F IRST SEPTEMBER, 2020. SD/ - SD/ - (P. MADHAVI DEVI) (A. MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD , DATED: FIRST SEPTEMBER, 2020. OKK 4 COPY TO: - 1) SREENIVAS KOTLA C/O. A.V. RAGHU RAM & P. VINOD, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD - 1. 2) ACIT, CIRCLE - 4(1), IT TOWERS, MASABTANK, HYDERABAD. 3) THE CIT (A) - 1, HYDERABAD. 4) THE PRINCIPAL COMMISSIONER OF INCOME TAX - 1, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE