Ramisetty Srinivasa Rao, Khammam V. Income Tax Officer, Ward-1, Khammam

ITA 2092/Hyd/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1871 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 27-11-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 11-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Business income
• Section: 143(3); 142(1); 143(1); 201; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND S HRI V. DURGA RAO , JUDICIAL MEMBER I TA NO . 2092 / HYD/201 7 A SSESSMENT Y EAR : 20 1 3 - 1 4 RAMISETTY SRINIVASA RAO , HYDERABAD . PAN AHKPR 0906 M VS. INCOME - TAX OFFICER, WARD 1, HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S HRI M.V. ANIL KUMAR REVENUE BY: SHRI NILANJAN DEY DATE OF HEARING: 27 / 1 1 / 201 9 DATE OF PRONOUNCEMENT: 04 / 1 2 /201 9 O R D E R PER V. DURGA RAO, J.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) 7 , HYDERABAD, DATED 10 / 1 0/201 7 FOR THE AY 201 3 - 1 4 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , A WHOLESALE TRADER IN MAIZE, FILED HIS RETURN OF INCOME FOR THE AY 2013 - 14 ADMITTING TOTAL INCOME AT RS. 9,51,030/ - ON 21/10/2014, WHICH WAS PROCESSED U/S 143(1) OF THE I.T. ACT. SUBSEQUENTLY, THE CASE WAS SEL ECTED FOR SCRUTINY AND ACCORDINGLY, NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED ON THE ASSESSEE. THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 14/03/2015 BY ESTIMATING THE NET INCOME @ 1% ON THE TOTAL SALES OF RS. 40,41,11,28 6/ - , WHICH WORKED OUT TO RS. 40,41,113/ - . I.T.A. NO. 2092/H /1 7 RAMISETTY SRINIVASA RAO, HYD. 2 2.1 THE AO OBSERVED THAT AS THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE TOTAL EXPENDITURE INCURRED BY WAY OF PRODUCING THE NECESSARY BOOKS AND REGISTERS, WHICH ARE THE PRIMARY EVIDENCES FOR THE PURPOSE OF EXAMINI NG THE GENUINENESS OF THE EXPENDITURE INCURRED, THE EXPLANATION OFFERED BY THE ASSESSEE REGARDING ADMISSION OF LOW NET PROFIT CANNOT BE ACCEPTED TO SINCE THE EXPENDITURE INCURRED BY THE ASSESSEE COULD NOT BE VERIFIED WITH REFERENCE TO THE NECESSARY EVIDENC ES. IN VIEW OF THE ABOVE OBSERVATIONS, THE AO REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE U/S 145(3) OF THE ACT ON THE SALES MADE BY THE ASSESSEE AND ESTIMATED THE NET TAXABLE INCOME OF THE ASSESSEE @ 1% ON THE TOTAL SALES OF RS. 40,41,11,286/ - , WHICH WO RKED OUT TO RS. 40,41,113/ - . 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) UPHELD THE ORDER OF AO BY OBSERVING AS UNDER: 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND FINDINGS OF THE ASSE SSING OFFICER CAREFULLY. THE ASSESSING OFFICER ESTIMATED NET PROFIT OF THE ASSESSEE @ 1% ON TOTAL SALES OF R S .44,41,11,286/ - ON ACCOUNT OF NON - PRODUCTION OF BOOKS OF ACCOUNTS, BILLS AND VOUCHERS ETC. ON SIMILAR CIRCUMSTANCES, ESTIMATION OF NET PROFIT AT 1% OF TURNOVER WAS ALSO MADE BY THE ASSESSING OFFICER IN THE A.Y.2012 - 13 AND NO APPEAL WAS FILED AGAINST THE OR DER OF ASSESSMENT DATED 19 - 3 - 2015. IN OTHER WORDS, THE APPELLANT HAS ACCEPTED THE NET PROFIT MARGIN AT 1% IN THE A.Y.2012 - 13. IN THE A.Y.2011 - 12 ALSO, THE ASSESSEE HIMSELF DECLARED NET PROFIT IN THE RETURN OF INCOME AT 0.74% ON TURNOVER. ASSESSEE HIMSELF R EQUESTED THE ASSESSING OFFICER TO ESTIMATE THE NET PROFIT AT 0.50% OF TURNOVER VIDE HIS LETTER DATED 11 - 3 - 2016 ADDRESSED TO THE ASSESSING OFFICER. THEREFORE, IT APPEARS THAT THE ASSESSEE HAS DELIBERATELY AVOIDED PRODUCTION OF BOOKS OF ACCOUNTS SUBSTANTIATI NG THE EXPENSES CLAIMED DURING THE ASSESSMENT YEAR 2013 - 14. THEREFORE, THERE IS NO REASON TO INTERFERE WITH THE ACTION OF THE ASSESSING OFFICER IN ESTIMATION OF INCOME AT 1% OF THE TURNOVER. HENCE, ALL THE GROUNDS OF APPEAL FILED BY THE APPELLANT ARE REJEC TED. I.T.A. NO. 2092/H /1 7 RAMISETTY SRINIVASA RAO, HYD. 3 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE PREFERRED AN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) AS WELL AS THE ASSESSING OFFICER ERRED IN LAW AND FACTS OF THE CASE IN NOT APPRECIATING THE FACT THAT THE ESTIMATION OF INCOME AT 1% OF THE TOTAL TURNOVER OF RS. 40,41,11,286/ - IS ON HIGHER SIDE. 2. THE CIT(A) AS WELL AS THE ASSESSING OFFIC ER OUGHT TO HAVE CONSIDERED THE FACT THAT COST OF TRANSPORT, SALARIES AND OTHER ADMINISTRATIVE AND FINANCE COST HAVE INCREASED, THE ESTIMATION AT 1% IS ON HIGHER SIDE. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE BOOKS OF ACCOUNT AND VOUCHER S HAVE BEEN LOST IN ROAD ACCIDENT, CERTIFICATE FROM THE POLICE HAVE BEEN SUBMITTED, MAY HAVE DISALLOWED A PERCENTAGE OF EXPENSES INSTEAD OF REJECTING THE BOOKS AND ESTIMATION OF INCOME, IS BAD IN LAW. 4. YOUR APPELLANT SUBMITS THAT THE ASSESSING OFFICER OUGHT TO HAVE DISALLOWED 5% OF THE FREIGHT AND OTHER EXPENSES IN ABSENCE OF BOOKS AND NOT ESTIMATION OF INCOME AT 1% OF THE TURNOVER OF RS. 40,41,11,286/ - WHICH IS ON HIGHER SIDE . 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON R ECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. WHILE CONFIRMING THE ORDER OF AO, THE CIT(A) GAVE A CATEGORICAL FINDING THAT THE ASSESSEE HAD ACCEPTED THE NET PROFIT MARGIN AT 1% IN THE AY 2012 - 13 AND NO APPEAL WAS FILED AGAINST THE ASSESS MENT ORDER. EVEN IN AY 2011 - 12 ALSO, THE ASSESSEE HIMSELF HAS DECLARED THE NET PROFIT IN THE RETURN OF INCOME AT 0.74% ON TURNOVER. FURTHER, THE CIT(A) OBSERVED THAT THE ASSESSEE HAS DELIBERATELY AVOIDED PRODUCTION OF BOOKS OF ACCOUNT SUBSTANTIATING THE EX PENSES CLAIMED DURING THE AY 2013 - 14. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND I.T.A. NO. 2092/H /1 7 RAMISETTY SRINIVASA RAO, HYD. 4 UPHOLDING THE SAME, WE DISMISS THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 4 TH DECEMBER , 201 9. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER SD / - ( V. DURGA RAO ) JUDICIAL MEMBER HYDERABAD, DATED 4 TH DECEMBER , 201 9 . KV COPY FORWARDED TO: 1. SHRI RAMISETTY SRINIVASA R AO, C/O M. ANANDAM & CO., CAS., 7A, SURYA TOWERS, SP ROAD, SECUNDERABAD 03. 2 . INCOME - TAX OFFICER, WARD 1, KHAMMAM. 3 . CIT ( A ) 7 , HYDERABAD. 4. PR. CIT 7 , HYDERABAD. 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE