Golla Naga Seshulu, Kurnool, Kurnool V. ITO, Ward -1, Kurnool, Kurnool

ITA 234/HYD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98495 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 31-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2015
• Court: TRIBUNAL
• Department Lawyers: SESHA SRINIVAS
• Assessee Lawyers: K NEERAJA
• Keywords: Business income; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 234/HYD/2015 ASSESSMENT YEAR: 2010-11 GOLLA NAGA SESHULU, KURNOOL [PAN: CCNPS8764C] VS THE INCOME TAX OFFICER, WARD-I, KURNOOL (APPELLANT) (RESPONDENT) FOR ASSESSEE : SMT. K. NEERAJA, AR FOR REVENUE : SHRI SESHA SRINIVAS, DR DATE OF HEARING : 31-08-2015 DATE OF PRONOUNCEMENT : 18-09-2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-IV, HYDERABAD DATED 22-10-2014 . ASSESSEE HAS RAISED AS MANY AS SEVEN GROUNDS MAINLY ON THE REASO NS OF RESTRICTING THE NET INCOME ESTIMATION TO 2.5% BY LD. CIT(A) FOL LOWING HER OWN ORDER FOR AY. 2009-10 AND NOT KEEPING THE APPEAL PENDING FOR THREE MONTHS AS REQUESTED BY ASSESSEE AS APPEAL FOR AY. 2009-10 WAS PENDING BEFORE THE ITAT. 2. BRIEFLY STATED, ASSESSEE IN THE BUSINESS OF TRAD ING IN CHICKEN AND EGGS AND HAS FILED RETURN OF INCOME OF RS. 1,89,539 /- ALONG WITH AGRICULTURAL INCOME OF RS. 80,000/-. ASSESSING OFF ICER (AO) OBTAINED THE I.T.A. NO. 234/HYD/2015 GOLLA NAGA SESHULU :- 2 -: DETAILS FROM M/S. SNEHA FARMS PVT. LTD. AND NOTICED THAT ASSESSEE HAS PURCHASED LIVE BIRDS TO THE TUNE OF RS. 8.23 CRORES . ASSESSEE WAS ASKED TO EXPLAIN IN THE TRANSACTIONS. ASSESSEE FILED A B ANK STATEMENT STATING THAT ALL THE SALE PROCEEDS WERE DEPOSITED IN THE BA NK ACCOUNT AND PAYMENTS WERE MADE FROM THE BANK ACCOUNT AND PREPAR ED A TENTATIVE P&L A/C IN SUPPORT OF HIS TRANSACTIONS. AO NOTICED THAT THE VARIOUS CLAIMS CANNOT BE SUBSTANTIATED BY ASSESSEE AND AFTE R REJECTING THE BOOKS OF ACCOUNTS, ESTIMATED THE INCOME AT 5% ON THE STOC K PUT FOR SALE WHICH WAS DETERMINED AT RS. 8,50,50,000/-. THE INCOME WAS ARRIVED AT RS. 42,52,500/- AND THE SAME WAS BROUGHT TO TAX ALONG W ITH THE AGRICULTURAL INCOME OFFERED. AO FOLLOWED HIS OWN COMPUTATION IN AY. 2009-10. LD. CIT(A) IN SPITE OF REQUEST FROM ASSESSEE FOR KEEPIN G THE APPEAL IN ABEYANCE TILL THE DISPOSAL OF APPEAL BY THE ITAT, F OLLOWED HER OWN ORDER IN AY. 2009-10 AND DIRECTED THE AO TO ESTIMATE THE NET INCOME AT 2.5% OF THE TURNOVER NET OF ALL EXPENSES, SUBJECT TO ASS ESSED INCOME NOT BEING LESS THAN THE RETURNED INCOME. ASSESSEE IS AGGRIEV ED. 3. AT THE OUTSET, IT WAS FAIRLY ADMITTED THAT THE O RDER FOR AY. 2009-10 WHICH WAS SUBJECT MATTER OF APPEAL BEFORE THE ITAT WAS HEARD AND DISPOSED OF BY THE ITAT IN ASSESSEES OWN CASE IN I TA NO. 807/HYD/2014 FOR AY. 2009-10 DT. 24-12-2014 AND THE ISSUE WAS SE T ASIDE TO THE FILE OF AO. 4. THE ORDER OF ITAT IN PARA 3 IS AS UNDER: 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT I S OBSERVED THAT IN THE ABSENCE OF ANY REGULAR BOOKS OF ACCOUNTS MAINTA INED BY THE ASSESSEE OR ANY RELEVANT DETAILS AND DOCUMENTS MAIN TAINED TO SUPPORT AND SUBSTANTIAL THE FIGURES REFLECTED IN TH E TRADING AND PROFIT AND LOSS ACCOUNT, IT IS A FIT CASE TO ESTIMA TE THE INCOME OF THE ASSESSEE FROM THE BUSINESS OF TRADING IN CHICKEN AN D EGGS AS RIGHTLY HELD BY THE AUTHORITIES BELOW. SUCH ESTIMATE, HOWE VER, SHOULD BE FAIR AND REASONABLE HAVING REGARD TO ALL THE FACTS OF THE CASE INCLUDING ESPECIALLY THE NATURE OF THE BUSINESS OF THE ASSESSEE. IN ORDER TO ASCERTAIN WHAT IS FAIR AND REASONABLE ESTI MATE, IT IS I.T.A. NO. 234/HYD/2015 GOLLA NAGA SESHULU :- 3 -: NECESSARY TO SEE THE PAST HISTORY OF ASSESSEES OWN CASE AS WELL AS THE PROFIT NORMALLY DECLARED BY OTHER ASSESSEES/CAR RYING ON THE SIMILAR BUSINESS. AS SUBMITTED BY THE LD. COUNSEL F OR THE ASSESSEE IN THIS REGARD, THE ASSESSEE IN FACT CARRIED ON THE BUSINESS OF TRADING IN CHICKEN AND EGGS ON WHOLESALE BASIS ONLY FOR A YEAR OR TWO AND CLOSED THE SAME IMMEDIATELY AFTER THE YEAR UNDER CONSIDERATION. IN SUCH CIRCUMSTANCES, IT IS ALL TH E MORE NECESSARY TO FIND OUT THE NET PROFIT DECLARED IN OTHER COMPARABL E CASES. A PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, HOW EVER, SHOWS THAT NEITHER THE A.O. NOR THE LD. CIT(APPEALS) HAS REFER RED TO ANY COMPARABLE CASE AND NOT EVEN THE ASSESSEE HAD MADE ANY ATTEMPT TO BRING ON RECORD THE NET PROFIT RATES DECLARED IN THE COMPARABLE CASES. WE THEREFORE CONSIDER IT FAIR AND PROPER AN D IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE RELATING TO ESTIMATION OF THE BUSINESS INCOME OF THE ASSESSEE TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH ON THE BASIS OF TRADING RESULTS DECLARED IN COMPARABLE CASES. NEEDLESS TO OBSERVE THAT THE A.O. SHALL AFFORD PROP ER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE DE CIDING THIS ISSUE AND WILL ENSURE THAT THE NET PROFIT TO BE ESTIMATED BY HIM IN NO CASE SHALL EXCEED 2.5% OF THE ASSESEES TURNOVER/SALES. 5. RESPECTFULLY FOLLOWING THE SAME, SINCE FACTS ARE SIMILAR IN BOTH THE ASSESSMENT YEARS, WE ALSO SET ASIDE THE ORDER OF AO AND CIT(A) ON THIS ISSUE AND DIRECT THE AO TO COMPLETE THE ASSESSMENT ORDER AS PER THE DIRECTIONS GIVEN IN AY. 2009-10, AFTER GIVING DUE OPPORTUNITY TO ASSESSEE. 6. ASSESSEES APPEAL IS ACCORDINGLY ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH SEPTEMBER, 2015 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 18 TH SEPTEMBER, 2015 TNMM I.T.A. NO. 234/HYD/2015 GOLLA NAGA SESHULU :- 4 -: COPY TO : 1. GOLLA NAGA SESHULU, D.NO. 44-16, PRAKASH NAGAR, KURNOOL. 2. THE INCOME TAX OFFICER, WARD-I, KURNOOL. 3. CIT (APPEALS)-IV, HYDERABAD. 4. CIT-III, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.