Penumala Vasanthamala, Tuni V. The Income Tax Officer, Ward-1, , Tuni

ITA 271/VIZ/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3148 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 10-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D MANOJ KUMAR
• Keywords: Business income
• Section: 44AD; 201; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 271 & 272 / VIZ /201 9 (ASST. YEAR : 20 13 - 14 & 20 14 - 1 5 ) SMT. PENUMALA VASANTHAMALA, PROP. JANAKI MEDICALS, D.NO. 5 - 17 - 33/1, RED CONVENT STREET, WARD - 16, TUNI. V S . IT O , WARD - 1, TUNI . PAN NO. ANKPV 4124 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI , ADV OCATE . DEPARTMENT BY : SHRI D. MANOJ KUMAR, SR. DR DATE OF HEARING : 05 / 1 1 /201 9 . DATE OF PRONOUNCEMENT : 15 / 1 1 /201 9 . O R D E R PER V. DURGA RAO , JUDICIAL MEMBER TH E S E APPEAL S BY THE SAME ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 2 , GUNTUR , BOTH DATED 22 /0 3 /201 9 FOR THE ASSESSMENT YEARS 20 13 - 14 & 2014 - 1 5 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS AN INDIVIDUAL , RUNNING A MEDICAL STORE IN THE NAME AND STYLE OF M/S. JANAKI MEDICALS . A SURVEY U/SEC. 13 3 A OF THE INCOME TAX ACT, 1961 2 ITA NO S . 27 1 & 2 72/VIZ/2019 ( SMT. PENUMALA VASANTHAMALA ) (HEREINAFTER REFERRED TO AS 'ACT') WAS CONDUCTED IN THE BUSINESS PREMISES I.E. , M/S. RAHUL LAPAROSCOPIC AND MATERNITY HOSPITAL ON 25/03/2015 . DURING THE COURSE OF SURVEY , IT WAS NOTICED THAT THERE WAS A MEDICAL STORE WITHIN THE HOSPITAL IN THE NAME AND STYLE OF M/S. JANAKI MEDICALS, MAINTAINED BY THE ASSESSEE . IN THE SURVEY, SOME BOOKS AND REGISTERS PERTAINS TO M/S. JANAKI MEDICALS WERE FOUND IN THE HOSPITAL PREMISES AND IMPOUNDED . DURING THE COURSE OF STATEMENT , IT IS QUESTIONED ABOUT THE FILING OF INCOME TAX RETURNS FOR THE PHARM A STORE. THE ASSESSEE SUBMITTED THAT SHE HAS NOT FILED RETURN OF INCOME FOR THE A.Y. 2014 - 15 . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ON VERIFICATION OF IMPOUNDED MATERIAL , IT WAS FOUND THAT ASSESSEE RECEIVED AN AMOUNT OF RS. 34,93,336/ - AND 20% OF GROSS PROFIT WORKED OUT TO RS. 6,98,667/ - , WHEREAS THE ASSESSEE SHOWN INCOME FROM MEDICAL STORE IS RS. 1,24,304/ - . THEREFORE, THERE IS AN ESCAPEMENT OF RS. 5,74,363/ - IS TREATED AS UNDISCLOSED INCOME AND ADDED TO INCOME RETURNED. 3 . ON APPEAL , LD. CIT(A) HAS OBSERVED THAT ASSESSEE HERSELF WORKED OUT 20% NET PROFIT ON PHARMA SALES AS FOUND IN THE IMPOUNDED MATERIAL . THEREFORE, THE ASSESSING OFFICER HAS ADOPTED THE SAME PERCENTAGE FOR THE SUPPRESSED TURNOVER AND ADDITION 3 ITA NO S . 27 1 & 2 72/VIZ/2019 ( SMT. PENUMALA VASANTHAMALA ) WAS MADE. WITH THIS OBSERVATION, LD. CIT(A) CONFORMED THE ORDER OF THE ASSESSING OFFICER. 4 . AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER HIMSELF HAS MENTIONED THAT ON VERIFICATION OF IMPOUNDED MATERIAL, ASSESSEE HAS RECEIVED AN AMOUNT OF RS.34 ,93,336/ - AND 20% OF GROSS PROFIT WORKED OUT TO RS.6,98,667/ - AND ADDED THE ENTIRE AMOUNT IN THE HANDS OF THE ASSESSEE WITHOUT CONSIDERING THE EXPENDITURE INCURRED . THE LD.CIT(A) HAS WRONGLY CONSIDERED 20% AS NET PROFIT INSTEAD OF GROSS PROFIT , T HEREFORE, THE ADDITION MADE IS ON HIGHER SIDE AND REQUESTED TO REDUCE THE SAME. 6 . ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. 8 . I N THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE HAS RECEIVED GROSS PROFIT AT 20% AND WORKED OUT TO RS. 6,98,667/ - AS BUSINESS INCOME OF THE ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE WITHOUT CONSIDERING THE 4 ITA NO S . 27 1 & 2 72/VIZ/2019 ( SMT. PENUMALA VASANTHAMALA ) EXPENDITURE INCURRED BY THE ASSESSEE , THEREFORE THE ENTIRE GROSS PROFIT SHOWN BY THE ASSESSEE CANNOT BE CONSIDERED AS AN INCOME OF THE ASSESSEE. THE LD. CIT(A) ALSO WRONGLY TAKEN A NOTE THAT ASSESSEE H ER SELF HAS SOWN NET PROFIT WHICH IS CONTRARY TO THE FACTS OF THE CASE . UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT THE ADDITION TO THE EXTENT OF 8% AS PROVIDED U/SEC. 44AD OF THE ACT IS REASONABLE AND JUS TIFIABLE . ACCORDIN GLY, WE MODIFY THE ORDER PASSED BY THE LD. CIT(A) AND PARTLY ALLOW THE APPEAL OF THE ASSESSEE. 9. ITA NO. 272/VIZ/2019 IS CONCERNED, THE FACTS INVOLVED IN THIS APPEAL IS SIMILAR TO THE FACTS INVOLVED IN ITA NO. 27 1 /VIZ/2019 , THEREFORE OUR DECISION IN PRECEDING PARAGRAPH S SHALL APPLY MUTATIS MUTANDIS TO THIS APPEAL ALSO. 10 . IN THE RESULT, APPEAL S FILED BY THE ASSESSEE ARE PARTLY ALLOWED ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 5 T H DAY OF NOV . , 201 9 . S D / - S D / - (D.S. SUNDER SINGH) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 5 T H NOVEMBER , 201 9 . VR/ - 5 ITA NO S . 27 1 & 2 72/VIZ/2019 ( SMT. PENUMALA VASANTHAMALA ) COPY TO: 1. THE ASSESSEE SMT. PENUMALA VASANTHAMALA, PROP. JANAKI MEDICALS, D.NO. 5 - 17 - 33/1, RED CONVENT STREET, WARD - 16, TUNI. 2. THE REVENUE ITO, WARD - 1, TUNI. 3. THE PR. CIT - 2, VISAKHAPATNAM. 4. THE CIT(A) - 2, GUNTUR. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.