Rachakattla Yadagiri, Hyderabad V. Income Tax Officer, Ward-15(2), Hyderabad

ITA 1885/Hyd/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5962 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 19-01-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 17-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Unexplained investment
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1 88 3/HYD/1 7 200 9 - 1 0 RACHAKATLA YADAGIRI, HYDERABAD [PAN: AFAPR6584B] INCOME TAX OFFICER, WARD-15(2), HYDERABAD 1884/HYD/17 201 0 - 1 1 1885/HYD/17 201 2 - 1 3 1886/HYD/17 201 3 - 1 4 1887/HYD/17 201 4 - 1 5 671/HYD/18 201 5 - 1 6 FOR ASSESSEE : SHRI B.SHANTHI KUMAR, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 19-01-2021 DATE OF PRONOUNCEMENT : 03-02-2021 O R D E R PER BENCH : THESE SIX ASSESSEES APPEALS FOR AYS.2009-10, 2010- 11, 2012-13, 2013-14, 2014-15 & 2015-16 ARE DIRECTED AGA INST THE CIT(A)7, HYDERABADS ORDERS; ALL DATED 05-09-201 7 EXCEPT FOR AY.2015-16 DT.15-02-2018, PASSED IN APPEAL NOS.512/2016-17, 513/2016-17, 514/2016-17, 515/2016 -17, 516/2016-17 & 012/CIT(A)-7/2017-18 INVOLVING PROCEE DINGS U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT] HEARD BOTH THE PARTIES. CASE FILES PERUSED. RACHAKATLA YADAGIRI (GROUP) :- 2 -: 2. IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE ASSESSEES IDENTICAL FOUR SUBSTANTIVE GROUNDS RAISED IN THE INSTANT BATCH OF SIX APPEALS SEEKS TO REVERSE BOTH THE L OWER AUTHORITIES ACTION ASSESSING THE ALLEGED SUPPRESSED GROSS RECEIPTS OF RS.17,05,140/-, RS.8,74,500/- (IN FORMER TWO AYS.2009-10 & 2010-11) TO THE EXTENT OF 100% FOLLOWED B Y SIMILAR ADDITIONS OF RS.1,03,65,275/-, RS.89,54,524/ -, RS.89,98,282/- AND 1,66,10,192/- IN LATTER FOUR ASSES SMENT YEARS TO THE TUNE OF 50%; IN THE CORRESPONDING ASSESSME NTS FOLLOWED BY THE CIT(A)S ORDERS GRANTING RELIEF TO THE EXTENT OF 10% (IN AYS.2012-13 TO 2015-16); RESPECTIVELY. 3. LEARNED AUTHORISED REPRESENTATIVE VEHEMENTLY CONTEND ED DURING THE COURSE OF HEARING THAT IT IS NOT THE GROSS A MOUNT OF THE ALLEGED SUPPRESSED GROSS RECEIPTS BUT ONLY THE PRO FIT ELEMENT EMBEDDED THEREIN WHICH DESERVES TO BE ASSESSED IN THE ASSESEES HANDS. CASE LAW DCIT VS. PANNA CORPORA TION [74 DTR 89] (GUJ), CIT VS. SHARDA REAL ESTATE PVT. LTD., [9 9 DTR 100] (MP-HC) IS CITED IN SUPPORT OF ASSESSEES PROFIT ELEMENT ASSESSMENT CONTENTION AS WELL. 4. MR.PANDEY, PLACED A VERY STRAY RELIANCE ON THE LOW ER AUTHORITIES ACTION UNDER CHALLENGE. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE FOREGOING RIVAL PLEADINGS. WE MAKE IT CLEAR FIRST OF ALL THAT BOTH THE LOWER AUTHORITIES HAVE ADOPTED A MUTUAL CONTRADICTOR Y STAND IN ASSESSING THE ASSESSEES ENTIRE ALLEGED SUPPR ESSED GROSS RECEIPTS IN FORMER TWO YEARS 2009-10 & 2010-11 FOLLOWED BY ASSESSMENT OF 50% IN ASSESSMENT(S) AND 40% IN CIT( A)S RACHAKATLA YADAGIRI (GROUP) :- 3 -: ORDER(S); RESPECTIVELY (SUPRA) IN THE LATTER FOUR ASSE SSMENT YEARS. IT IS THEREFORE APPARENT THAT SUCH AN APPROACH NO T GIVING THE DUE BENEFIT OF THE ALLEGED CORRESPONDING BU SINESS EXPENSES IS NOT SUSTAINABLE PER SE. THE FACT ALSO REMAINS THAT THE CASE NOW RELIED UPON BY THE ASSESSEES BEHEST DEAL S WITH AN INSTANCE OF REAL ESTATE DEVELOPMENT BUSINESS THAN REA L ESTATE COMMISSION ACTIVITY CARRIED OUT IN ALL THESE SIX ASSESSMENT YEARS BEFORE US. 6. LEARNED COUNSEL ALSO FAILS TO DISPUTE THAT THE ASSE SSEE HAS NOT PLACED ON RECORD ANY VOUCHER OF THE CORRESPON DING INSTANCES OF EXPENSES AND DETAILS PERTAINING TO THE ALLE GED SUPPRESSED GROSS RECEIPTS. BE THAT AS IT MAY, THERE CAN BE HARDLY ANY DISPUTE THAT THE ENTIRE RECEIPTS DERIVED IN THE COURSE OF THE ASSESSEES COMMISSION AGENT BUSINESS AL SO REQUIRES EXPENSES FOR MARKET PRESENCE AND PUBLIC REL ATIONS ETC. 7. WE THEREFORE DEEM IT APPROPRIATE IN THE GIVEN FACTS AND CIRCUMSTANCES THAT A LUMP-SUM PROFIT ELEMENT ASSESSMENT O F 30% OF THE ALLEGED SUPPRESSED GROSS RECEIPTS IN ALL TH ESE SIX ASSESSMENT YEARS WOULD BE JUST AND PROPER WITH A RIDER THAT THE SAME SHALL NOT BE TAKEN AS A PRECEDENT IN ANY OTHER ASSESSMENT YEAR. THE ASSESSING OFFICER IS DIRECTED TO FINALISE CONSEQUENTIAL COMPUTATION AS PER LAW. THIS FIRST SUBST ANTIVE GROUND IN ALL THESE ASSESSMENT YEARS AND SOLE ISSUE IN ITA NO.671/HYD/2018 AND 1886/HYD/2017 ARE PARTLY ACCEPTED IN FOREGOING TERMS. RACHAKATLA YADAGIRI (GROUP) :- 4 -: 8. THE ASSESSEES IDENTICAL SECOND ISSUE IN AYS.200 9-10 AND 2010-11 CHALLENGE CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION DISALLOWING 50% OF THE MISCELLANE OUS EXPENSES. BOTH THE LEARNED REPRESENTATIVES FAIL TO DISP UTE THAT SUCH AN ESTIMATION CANNOT BE AGREED WITH IN ENTIRETY AS THE ASSESSEE HAS TO PLACE ON RECORD ALL THE CORRESPONDING EVIDENCE AND THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE NOT PIN- POINTED THE SPECIFIC DEFAULTS IN THE CORRESPONDING DE TAILS. WE THEREFORE DEEM IT APPROPRIATE TO LUMPSUM DISALLOWANCE O F 25% WILL MEET THE ENDS OF JUSTICE IN BOTH THESE ASSESSMENT YEARS UNDER THE RELEVANT HEADS. THE SAME SHALL ALSO NOT BE TAKEN AS A PRECEDENT IN ANY OTHER ASSESSMENT YEAR. THE ASSESSIN G OFFICER IS DIRECTED TO FINALISE CONSEQUENTIAL COMPUTAT ION. THE ASSESSEES FORMER TWO APPEALS ITAS 1883/HYD/2017 AN D 1884/HYD/2017 FOR AYS.2009-10 AND 2010-11 ARE PARTLY ALLOWED IN ABOVE TERMS. 9. WE NOW ADVERT TO AYS.2012-13 AND 2014-15 RAISING T HE SECOND ISSUE OF OTHER COMMISSION INCOME ADDITIONS OF RS.1,42,980/- AND RS.3,60,720/-; RESPECTIVELY. LEAR NED COUNSEL IS FAIR ENOUGH IN NOT PRESSING THESE TWO GROU NDS. KEEPING IN MIND SMALLNESS OF THE AMOUNTS INVOLVED. T HE ASSESSEES APPEAL ITA NO.1887/HYD/2017 FOR AY.2014- 15 IS PARTLY ALLOWED IN FOREGOING VERY TERMS. 10. WE ARE NOW LEFT WITH AY.2012-13 INVOLVING ASSESS EES APPEAL ITA NO.1885/HYD/2017. ITS THIRD SUBSTANTIVE GR OUND RAISED HEREIN SEEKS ALSO REVERSE BOTH THE LOWER AUTHOR ITIES ACTION ADDING ALLEGED UNEXPLAINED INVESTMENT OF RS.13,40,626/- IN THE COURSE OF ASSESSMENT AS UPHELD IN THE RACHAKATLA YADAGIRI (GROUP) :- 5 -: CIT(A)S ORDER. LEARNED COUNSEL IS FAIR ENOUGH IN NOT DISPUTING THE ADDITION IN THIS CASE IN PRINCIPLE. HIS ONLY CAS E IS THAT THE BOTH THE ASSESSING OFFICER AND THE CIT(A) OUGHT TO HAVE CONSIDERED THE ASSESSEES CASE FOR GRANTING TELESCOPI NG BENEFIT IN VIEW OF THE EARLIER YEARS INCOME ASSESSED. THIS CLINCHING ASPECT HAS GONE UNREBUTTED FROM DEPARTMENTAL SIDE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO CONSIDER THE ASSESSEES TELESCOPING CLAIM AS PER LAW. THIS APPEAL ITA NO.1885/HYD/2017 IS ALSO ACCEPTED IN PART IN ABOVE TER MS. 11. ALL THESE ASSESSEES APPEALS ARE PARTLY ALLOWED IN ABOVE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE R ESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 03-02-2021 TNMM RACHAKATLA YADAGIRI (GROUP) :- 6 -: COPY TO : 1.SHRI RACHAKATLA YADAGIRI, C/O.B.SHANTHI KUMAR, ADVOCATE, 111, TARAMANDAL COMPLEX, 5-9-13, SAIFABAD , HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-15(2), HYDERABAD. 3.CIT(APPEALS)-7, HYDERABAD. 4.PR.CIT-7, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.