M/s Nuziveedu Swathi Costal Consortium, Hyderabad V. ACIT., Circle-8(1), Hyderabad, Hyderabad

ITA 1890/HYD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2698 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 12-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. AY. APPELLANT RESPONDENT 1890/HYD/14 2009-10 M/S. NUZIVEEDU SWATHI COASTAL CONSORTIUM, HYDERABAD [PAN: AAAAN3839R] ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8(1), HYDERABAD 818/HYD/16 2011-12 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8(1), HYDERABAD M/S. NUZIVEEDU SWATHI COASTAL CONSORTIUM, HYDERABAD [PAN: AAAAN3839R] FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR FOR REVENUE : SHRI A.G.V. PRASAD, DR DATE OF HEARING : 09-08-2017 DATE OF PRONOUNCEMENT : 09-08-2017 O R D E R PER CHANDRA POOJARI, A.M. : THESE TWO APPEALS ARE FILED BY BOTH ASSESSEE AND REV ENUE AGAINST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOM E TAX (APPEALS), FOR THE AYS. 2009-10 & 2011-12. ITA NO. 1890/HYD/2014 (ASSESSEES APPEAL): 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NOS. 1890/HYD/14 818/HYD/16 :- 2 - : 1. THE ORDER OF THE LEARNED CIT(A), VIJAYAWADA IS AGAINST LAW AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE BOOKS RESULTS CANNOT BE REJECTED WITHOUT GIVING A FINDING AS TO H OW THE CORRECT PROFITS CANNOT BE DEDUCTED FROM THE BOOKS OF ACCOUNTS, ESPE CIALLY IN A CASE WHERE NO DEFECTS IN THE BOOKS OF ACCOUNT WERE POINTED OUT . 3. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LEAR NED CIT(A) OUGHT TO HAVE APPRECIATED THAT ESTIMATION OF PROFITS AT 5% O F THE TURNOVER IS EXCESSIVE, UNREASONABLE AND WITHOUT ANY COGENT MATE RIAL. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T HAVING REGARD TO THE FACTS OF THE CASE THAT THE OPERATING PROFIT IS MORE THAN THE NORMAL PROFIT IN A SIMILAR LINE OF BUSINESS, THE DEDUCTION TOWARDS D EPRECIATION, AND INTEREST ON BORROWED FUNDS SHOW HAVE BEEN ALLOWED F ROM THE ESTIMATED PROFIT. 5. FOR THESE OR ANY OTHER GROUND OR GROUNDS THAT MA Y BE URGED AT THE TIME OF HEARING OF THE APPEAL. 3. IN THIS CASE, ASSESSING OFFICER (AO) ESTIMATED THE INCOME OF THE ASSESSEE AT 5% OF THE GROSS RECEIPTS. ON APPEAL, CIT CONFIRMED THE SAME. NOW THE CONTENTION OF THE LD.AR IS THAT THE ORD ER OF THE LOWER AUTHORITIES IS VERY CRYPTIC AND THEY BLINDLY F OLLOWED THE EARLIER ORDER OF THE TRIBUNAL IN ITA NOS. 225/HYD/20 10 AND 725/HYD/2010 FOR THE AYS. 2006-07 & 2007-08 DT. 26-11 -2010, IT IS TO BE SET ASIDE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR OPINION, THERE IS A FO RCE IN THE ARGUMENT OF THE LD.AR THAT THE AO CANNOT ESTIMATE THE INCOM E OF THE ASSESSEE WITHOUT REJECTING THE BOOKS OF ACCOUNT BY SP EAKING ORDER. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE REM IT THE ENTIRE ISSUE-IN-DISPUTE TO THE FILE OF AO FOR FRESH CONSIDERA TION AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NOS. 1890/HYD/14 818/HYD/16 :- 3 - : 5. IN THE RESULT, THIS APPEAL OF ASSESSEE IN ITA NO. 1890/HYD/2014 IS PARTLY ALLOWED FOR STATISTICAL PURPOS ES. ITA NO. 818/HYD/2016 (REVENUES APPEAL): 6. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) HAS ERRED IN BOTH FACTS OF THE CASE AND LAW. 2. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT THE BASIC FACTS FOR THE AY. 2006-07 AND AY. 2011-12 ARE SAME IN THIS CA SE. 3. THE CIT(A) HAS NOT APPRECIATED THE FACT THAT THE ASSESSING OFFICER HAS STRICTLY FOLLOWED ALL THE PROVISIONS OF SECTION 144 OF THE IT ACT BEFORE REJECTING THE BOOKS OF ACCOUNTS AND ESTIMATED THE B USINESS INCOME FOLLOWING THE HON'BLE ITAT ORDER PASSED IN ASSESSEE S OWN CASE FOR THE AY. 2006-07. 4. ANY OTHER GROUND ARISES DURING THE COURSE OF APP EAL PROCEEDINGS. 7. IN THIS CASE, AO ESTIMATED THE INCOME OF THE ASSESSE E AT 5% OF THE GROSS RECEIPTS. HOWEVER, CIT(A) DELETED THE ADD ITION CONSIDERING CERTAIN ADDITIONAL EVIDENCE AND ARGUMENTS WHICH ARE NOT PLACED BEFORE THE AO. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR OPINION, WHAT ARE THE D OCUMENTS PLACED BEFORE THE CIT(A) SHOULD HAVE BEEN CONFRONTED TO AO FOR HIS COMMENTS WHICH THE CIT(A) FAILED TO DO SO. IN VIEW O F THIS, WE REMIT THE ENTIRE ISSUE TO THE FILE OF THE AO FOR FRESH C ONSIDERATION AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSE E. ITA NOS. 1890/HYD/14 818/HYD/16 :- 4 - : 9. IN THE RESULT, APPEAL OF REVENUE IN ITA NO. 818/HY D/2016 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. TO SUM-UP, BOTH ASSESSEES APPEAL AND REVENUES APPEAL ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH AUGUST, 2017 UPON CONCLUSION OF HEARING SD/- SD/- (P. MADHAVI DEVI) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEM BER HYDERABAD, DATED 9 TH AUGUST, 2017 TNMM COPY TO : 1. M/S. NUZIVEEDU SWATHI COASTAL CONSORTIUM, C/O. A .V. RAGHU RAM, ADVOCATE, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8 (1), HYDERABAD. 3. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8( 1), HYDERABAD. 4. CIT (APPEALS)- VIJAYAWADA. 5. CIT (APPEALS)-2, HYDERABAD. 6. CIT-II, HYDERABAD. 7. PR. CIT-2, HYDERABAD. 8. D.R. ITAT, HYDERABAD. 9. GUARD FILE.