Latha C.Mohan , Chennai V. Commissioner of Income Tax (Appeals)-2, Chennai

ITA 2113/CHNY/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 7807 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-02-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: K SENGUTTUVAN; M SUBATHRA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 2113/CHNY/2017 / ASSESSMENT YEAR : 2012-13 SMT. MOHAN LATHA CHANDRA, SHOP NO. 4, LUZ GINZA, 140A, ROYAPETTAH HIGH ROAD, MYLAPORE, CHENNAI 600 004. [PAN: AABPL 3991Q] VS. ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 1, CHENNAI. ( / APPELLANT) ( #$& /RESPONDENT ) ASSESSEE BY : SHRI. K. SENGUTTUVAN & M. SUBATHRA, ADVOCATE REVENUE BY : SHRI. B. SAGADEVAN, JCIT 0 /DATE OF HEARING : 17.12.2018 0 /DATE OF PRONOUNCEMENT : 27.12.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI IN ITA NO. 78/CIT(A)-2/2015-16 DATED 23.05.2017 FOR ASSESSMENT YEAR 2012-13. :-2-: ITA NO.2113/CHNY/2017 2. SMT. MOHAN LATHA CHANDRA, THE ASSESSEE , IS A P ROPRIETRIX OF KANYA BEAUTY PARLOUR HAVING BRANCHES AT VARIOUS PLACES IN CHENNAI AND BANGALORE. SHE IS ALSO A DIRECTOR IN M/S SPALON INDIA PVT, LTD., WHICH IS ALSO IN THE BUSINESS OF RUNNING BEAUTY PAR LOURS. BASED ON THE INFORMATION THAT THE CHARGES FOR THE BEAUTY SERVICE S WERE EXORBITANT BUT THE RECEIPTS SHOWN IN HER RETURN ARE COMPARATIVELY VERY LOW, THE NET PROFIT DECLARED IS ONLY 2.62% OF THE TURNOVER WHICH IS ALSO VERY LOW FOR A SERVICE PROVIDER ETC, A SURVEY WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 10.5.2013 BY THE INVESTIGATION W ING OF THE DEPARTMENT TO VERIFY THE CORRECTNESS OF THE ACCOUNT S MAINTAINED BY THE ASSESSEE. IN THE COURSE OF SURVEY, CERTAIN BOOKS A ND DOCUMENTS WERE IMPOUNDED AND THE BACK-UP OF ALL THE SYSTEMS AVAILA BLE IN THE ACCOUNTS DEPARTMENT WERE TAKEN. A THOROUGH STUDY OF THEM RE VEALED THAT A VERY SYSTEMATIC AND DETAILED PROCEDURE OF ACCOUNTING HAS BEEN FOLLOWED BY THE KANYA GROUP, CULMINATING IN SUMMARIZING OF THE RECEIPTS PERTAINING TO THE VARIOUS OUTLETS, IN A SINGLE FILE NAMED OUT LET METRICS, THE ASSESSING OFFICER FOUND THAT YEAR AFTER YEAR, START ING FROM FY 2008-09 TO FY 2011-12, THERE WAS A CLEAR DIFFERENCE, TOTALL ING RS. 8.69 CRORES IN ALL, BETWEEN THE TURNOVER AS REFLECTED IN THE OUTLE T METRICS AND IN THE RETURNS OF INCOME FILED BY THE ASSESSEE. FOR FY 20 11-12 PERTAINING TO AY 2012-13 I.E. THE YEAR IN QUESTION, THIS DIFFEREN CE CAME TO RS. 1,18 CRORES. BESIDES, A DIFFERENCE (I.E. EXCESS CLAIM) O F RS. 1.46 CRORES IN THE :-3-: ITA NO.2113/CHNY/2017 EXPENDITURE SUCH AS SALARIES, RENT AND STAFF WELFAR E FOR FY 2011-12 IN THE RETURN OF INCOME, AS COMPARED TO THE EXPENSES R EFLECTED IN THE OUTLET METRICS, WAS ALSO FOUND. THUS, WHILE MAKI NG THE ASSESSMENT FOR ASSESSMENT YEAR 2012-13, BASED ON THE MATERIAL /DOC UMENTS /INFORMATION FOUND DURING THE COURSE OF SURVEY, CON CLUDED THAT THERE HAS BEEN SUPPRESSION OF RECEIPTS AND IN VIEW OF THE ASSESSEES ADMISSION TO OFFER THE DIFFERENCE IN RECEIPTS AS HE R INCOME IN THE RESPECTIVE ASSESSMENT YEARS, THE AO ADDED BACK A SU M OF RS. 1.18 CRORES TO THE RETURNED INCOME TREATING IT AS AN UN ACCOUNTED INCOME. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) . THE CIT(A) UPHELD THE ADDITION. AGAINST THAT ORDER, THE ASSES SEE FILED THIS APPEAL. 3. DURING THE HEARING, IT WAS SUBMITTED, INTER ALI A, THAT CERTAIN MATERIALS WERE NOT SHOWN TO THE ASSESSEE ETC. IN TH IS REGARD, THE DR SUBMITTED THAT THE AO COMPLIED WITH THE DIRECTIONS OF THE HONBLE ITAT, AND INVITED OUR ATTENTION TO THE RELEVANT PORTION OF THE AOS LETTER DATED 10.12.2018, WHICH IS EXTRACTED AS UNDER: THE HONBLE ITAT HAD DIRECTED THE REVENUE TO OPEN THE HARD DISK IN PRESENCE OF THE ASSESSEE. ACCORDINGLY LETTERS DATE D 30.08.2018 AND 06.12.2018 WERE ISSUED TO THE ASSESSEE. IN RESPONS E, SMT. LATHA C. MOHAN ATTENDED THIS OFFICE ON 07.11.2018. THE IMPO UNDED HARD DISK WAS OPENED IN THE PRESENCE OF TWO WITNESSES. A PRINT O UT OF THE EXCEL SHEET TAKEN FROM THE HARD DISC WHICH WAS RELIED UPON IN T HE ASSESSMENT ORDER HAS BEEN FURNISHED TO THE ASSESSEE. TWO CERTIFIED COPIES OF THE SAID EXCEL SHEET HAS BEEN ENCLOSED HEREWITH. FURTHER, IT IS S UBMITTED THAT A MIRROR :-4-: ITA NO.2113/CHNY/2017 COPY OF THE ENTIRE HARD DISK WHICH WAS IMPOUNDED DU RING THE COURSE OF THE SURVEY HAS BEEN FURNISHED TO THE ASSESSEE. HOWEVER, THE AR PLEADED THAT COPIES OF SWORN STATEM ENTS RECORDED FROM THE ASSESSEE WAS NOT FURNISHED AND HENCE, THE ASSESSEE COULD NOT DEFEND HER CASE PROFESSIONALLY. THE LD DR OPPOSED I T FROM THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROU GH RELEVANT MATERIAL. THE ASSESSEE PLEADS THAT THE IMPUGNED ADD ITIONS WERE MADE BASED ON UNRELIABLE MATERIAL, STATEMENTS ETC, WHIL E THE REVENUE SUPPORTS ITS STAND FROM THE ORDERS OF THE LOWER AUT HORITIES. SINCE THE ADDITIONS ARE CLAIMED TO HAVE BEEN MADE ON THE BASI S OF IMPOUNDED MATERIAL ETC, ON THE FACTS AND CIRCUMSTANCES OF THI S CASE , WE DEEM IT FIT TO REMIT THE ISSUES BACK TO THE AO FOR A FRESH EXAM INATION WITH A DIRECTION TO THE AO TO SPECIFY THE ISSUES ON WHICH THE IMPUGNED ADDITIONS ARE BEING MADE TO THE ASSESSEE , FURNISH COPIES OF ALL RELEVANT MATERIAL, IN ACCORDANCE WITH ESTABLISHED PROCEDURE, ON WHICH HE RELIES IN SUPPORT OF HIS STAND TO THE ASSESSEE, AFFORD AD EQUATE OPPORTUNITY TO THE ASSESSEE AND THEN DECIDE THE ISSUES IN ACCORDAN CE WITH LAW. THE ASSESSEE SHALL LAY ALL MATERIALS IN SUPPORT OF HER STAND AND COMPLY WITH THE REQUIREMENTS OF THE AO IN ACCORDANCE WITH LAW. THE AO IS ALSO AT LIBERTY TO CONDUCT APPROPRIATE ENQUIRY AS DEEMED FI T, HOWEVER, SHALL :-5-: ITA NO.2113/CHNY/2017 AFFORD ADEQUATE OPPORTUNITY TO THE ASSESSEE ON THE MATERIAL ETC WHICH WOULD USED AGAINST HER, IF ANY. THUS, THE ASSESS EES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 27 TH DAY OF DECEMBER, 2018 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 5 /DATED: 27 TH DECEMBER, 2018 JPV 0#6787 /COPY TO: 1. &/ APPELLANT 2. #$& /RESPONDENT 3. : ) (/CIT(A) 4. : /CIT 5. 7# /DR 6. = /GF