Seela Rama Rao, Visakhapatnam V. THE ITO, Srikakulam

ITA 22/VIZ/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8956 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 12-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI D. MANMOHAN, HONBLE VICE-PRESIDENT ITA NO. 22/VIZ/2015 (ASST. YEAR : 2011-12) SEELA RAMA RAO, SRI VENKATESWARA COLONY, J.R. PURAM, RANASTHALAM, SRIKAKULAM DISTRICT. VS. ITO, WARD-1, SRIKAKULAM. PAN NO. BAVPS 6545 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C. SUBRAHMANYAM - FCA. DEPARTMENT BY : SHRI M.K. SETHI SR. DR DATE OF HEARING : 03/05/2017. DATE OF PRONOUNCEMENT : 03/05/2017. O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A), VISAKHAPATNAM AND IT PERTAINS TO ASSESSMENT YEAR 2011-12. 2. THE ASSESSEE IS ADMITTEDLY ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF IMFL. THE ASSESSEE OBTAINED LICENCE TO CARRY ON THE BUSINESS OF IMFL IN AN AUCTION FOR AN AMOUNT OF 45 LAKHS FOR ONE YEAR. DUE TO LOW TURNOVER AND MORE LICENCE FEE, IT RESULTED IN REDUCTION IN PROFIT. IN FACT, ASSESSEE DECLARED GROSS PROFIT OF 40,03,043/- WHICH WAS 36% OF THE TURNOVER AND NET PROFIT OF 3,41,126/- WHEREAS, ASSESSING OFFICER ESTIMATED THE INCOME AT 20% OF THE TURNOVER. 2 ITA NO. 22/VIZ/2015 (SEELA RAMA RAO) 3. LD. CIT(A), ON THE OTHER HAND, WAS OF THE VIEW THAT ESTIMATE OF INCOME AT 10% OF PURCHASE PRICE WOULD BE REASONABLE AND ACCORDINGLY DIRECTED THE ASSESSING OFFICER. 4. FURTHER AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE ASSESSING OFFICER ALSO MADE CERTAIN ADDITIONS REFERABLE TO UNEXPLAINED INVESTMENTS, WHICH WERE CONFIRMED BY THE LD. CIT(A). 6 . THE ASSESSEE PREFERRED AN APPEAL CHALLENGING THE ADDITIONS CONFIRMED BY THE LD. CIT(A). 7. GROUND NOS. 1.0 TO 1.3 ARE CONTESTED, REFERABLE TO THE PERCENTAGE OF PROFIT ADOPTED BY THE LD. CIT(A) ON PURCHASE AND SALE OF IMFL, WHEREAS LEARNED COUNSEL HAS NOT RAISED ANY SUBMISSIONS WITH REGARD TO GROUND NOS. 1.4 TO 1.7; THE SAME ARE REJECTED. 8 . WITH REGARD TO GROUND NOS. 1.0 TO 1.3, LEARNED COUNSEL SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES, ITAT VISAKHAPATNAM BENCH CONSISTENTLY ESTIMATED THE INCOME AT 5% OF THE PURCHASED CLEAR OF ALL DEDUCTIONS. 9 . I HAVE HEARD SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE RECORD. 10 . CONSISTENT WITH THE VIEW TAKEN BY THE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF PANDAVA RAMA RAO (ITA NO. 118/VIZ/2015), I HOLD THAT 3 ITA NO. 22/VIZ/2015 (SEELA RAMA RAO) INTERESTS OF JUSTICE WOULD BE FAIRLY MET, IF THE NET INCOME IS ESTIMATED AT 5% OF THE PURCHASES CLEAR OF ALL EXPENDITURE/ DEDUCTIONS. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT TODAY I.E. 03 RD DAY OF MAY, 2017. SD/- (D. MANMOHAN) VICE-PRESIDENT DATED : 03 ST MAY, 2017. VR/- COPY TO: 1. THE ASSESSEE SEELA RAMA RAO, SRI VENKATESWARA COLONY, J.R. PURAM, RANASTHALAM, SRIKAKULAM DISTRICT. 2. THE REVENUE ITO, WARD-1, SRIKAKULAM. 3. THE CIT-2, VISAKHAPATNAM. 4. THE CIT(A), VISAKHAPATNAM. 5. THE D.R., VISAKHAPATNAM. 6. GUARD FILE. BY ORDER