Bhoomatha Parboiled Rice & Oil Mill,Karimanagar, Hyderabad V. ACIT, Karimnagar

ITA 280/HYD/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3381 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1993-1994
• Appeal Filed On: 22-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A (SMC), HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.280/HYD/2011 : ASSESSMENT YEA R 1993-94 M/S. BHOOMATHA PARBOILED RICE & OIL MILLS, KARIMNAGAR. ( PAN AFIPB 0872 J ) VS ASSTT. COMMISSIONER OF INCOME - TAX, KARIMNAGAR (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CHAITANYAKUMAR/ SHRI RAVI SESHADRI RAO RESPONDENT BY : SMT. NIVEDITA BISWAS O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERA BAD DATED 10.12.2010 FOR THE ASSESSMENT YEAR 1993-94. 2. AT THE OUTSET, IT MAY BE NOTED THAT THERE IS A DELAY OF SEVEN DAYS IN THE FILING OF THIS APPEAL BY THE ASSESSEE . A PETITION HAS BEEN FILED SEEKING CONDONATION OF DELAY. CONSIDERING TH E REASONS FOR THE DELAY NARRATED IN THAT PETITION AND THE SMALLNESS O F THE DELAY INVOLVED, I CONDONE THE DELAY AND PROCEED TO DISPOSE OFF THIS APPEAL ON MERITS. 3. THE ONLY EFFECTIVE GRIEVANCE OF THE ASSESSEE I N THIS APPEAL IS AGAINST THE ESTIMATION OF ITS NET INCOME FOR THE YEAR UNDER APPEAL AT RS.1 LAKHS, AS AGAINST LOSS OF RS.3,42,580 DECLARED BY THE ASSESSEE IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER S.148 OF THE INCOME-TAX ACT. ITA NO.28 0/H/2011 M/S. BHOOMATHA PARBOILED RICE & OIL MILLS, KARIM NAGAR. 2 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF RICE AND PADDY MILLING. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT FILED THE DETAILS FILED CALLED FOR. VOUCHERS AND D ETAILS FOR PURCHASES AND SALES WERE NOT FILED. EVEN THE YIELD REGISTER IS NO T PRODUCED, THOUGH A STATEMENT RECORDING THE YIELD ARRIVED AT 71.10 % W AS FILED. HE FURTHER NOTICED THAT IN THE STATEMENT FIELD ALONGWI TH THE RETURN, NO QUANTITATIVE DETAILS WERE FURNISHED. IN THE ABSEN CE OF QUANTITATIVE DETAILS, THE ASSESSING OFFICER NOTED THAT THE FIGUR ES MENTIONED IN THE YIELD STATEMENT COULD NOT BE CORRELATED AND IT WAS NOT POSSIBLE TO VERIFY THE CORRECTNESS OF THE YIELD ADMITTED. THE ASSESSIN G OFFICER FURTHER NOTICED FROM THE CASH BOOK THAT ON 22.7.1992, THERE WAS A CASH PAYMENT OF RS.30,000 MADE TO M/S. SIVAJYOTHI ENTERP RISES AT PAGE 148, ABOUT WHICH NO INFORMATION COULD BE FURNISHED BY TH E ASSESSEE, MUCH LESS THE JUSTIFICATION FOR MAKING PAYMENT IN CASH I NSTEAD OF CHEQUE. CONSIDERING THESE DEFECTS AND DEFICIENCIES IN THE A CCOUNTS AND ALSO OBSERVING THAT IN THE ABSENCE OF ANY CLARIFICATION REGARDING THE CREDITS AND DEBITS IN THE BOOKS, IT IS DIFFICULT TO COME TO CONCLUSION THAT THE ASSESSEE CORRECTLY ACCOUNTED FOR THE PROFIT FROM BU SINESS, ASSESSING OFFICER REJECTED THE BOOK RESULTS. TAKING INTO ACC OUNT THE NATURE OF THE ASSESSEES BUSINESS AND THE VOLUME OF TURNOVER AND THE LOSS CLAIMED BY THE ASSESSEE, THE ASSESSING OFFICER ESTIMATED TH E NET INCOME OF THE ASSESSEE AT RS.1,00,000 AND COMPLETED THE ASSESSMEN T ON THE SAID NET INCOME OF RS.1,00,000, VIDE ORDER OF ASSESSMENT DATED 21.3.1997 FRAMED UNDER S.143(3) READ WITH S.147 OF THE ACT. BY THE IMPUGNED APPELLATE ORDER DATED 10.12.2010, WHICH WAS PASSED IN THE SECOND ROUND OF APPELLATE PROCEEDINGS BEFORE THE CIT(A), THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING T HE NET INCOME OF THE ASSESSEE AT RS.1,00,000, AS AGAINST LOSS DECLARED O F RS.3,42,582, FOR ITA NO.28 0/H/2011 M/S. BHOOMATHA PARBOILED RICE & OIL MILLS, KARIM NAGAR. 3 THE YEAR UNDER APPEAL. AGGRIEVED BY THE ACTION OF THE CIT(A), THE ASSESSEE PREFERRED THE PRESENT APPEAL BEFORE THIS T RIBUNAL. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS EVIDENT FROM THE IMPUG NED ASSESSMENT ORDER THAT IT IS ON ACCOUNT OF THE ASSESSEES INABI LITY TO FURNISH NECESSARY BILLS/VOUCHERS, DETAILS CALLED FOR AND EX PLANATIONS FOR VARIOUS ENTRIES IN THE BOOKS, THAT THE ASSESSING OFFICER RE SORTED TO ESTIMATION OF THE ASSESSEES INCOME FROM BUSINESS, BY REJECTING T HE BOOK RESULTS. IN THE EARLIER ROUND OF APPELLATE PROCEEDINGS, THIS TR IBUNAL HAS SET ASIDE THE ORDER OF THE CIT(A) AND RESTORED THE MATTER TO THE FILE OF THE CIT(A) WITH A DIRECTION TO GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND DECIDE THE MATTER ON MERITS IN ACCORDA NCE WITH LAW. IN THE PROCEEDINGS THAT ENSUED THEREAFTER BEFORE THE C IT(A), CONSIDERING THE SUBMISSION OF THE ASSESSEE THAT IT WAS IN POSSE SSION OF THE BOOKS OF ACCOUNT WHICH CAN BE PRODUCED, THE CIT(A) REMANDED THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO CALL FOR AND VERIFY THE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS AND MAKE NECESSARY ENQ UIRIES FOR ASCERTAINING THE CORRECTNESS OF CREDITS/LIABILITIES AND GENUINENESS OF PURCHASES, SALES AND EXPENSES, AND THEN TO SUBMIT T HE REMAND REPORT. THE ASSESSING OFFICER, IN THE REMAND REPORT SUBMITT ED TO THE CIT(A), NARRATING INTER-ALIA THE NON-SUBMISSION OF CASH BOO K FOR THE RELEVANT PERIOD BY THE ASSESSEE, JUSTIFIED THE DETERMINATION OF ASSESSEES NET INCOME FOR ASSESSMENT AT RS.1 LAKH. THE CIT(A), A FTER CONSIDERING THE SAID REMAND REPORT OF THE ASSESSING OFFICER AND THE SUBMISSIONS OF THE ASSESSEE BEFORE HIM, ULTIMATELY UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER DETERMINING THE ASSESSEES NET IN COME AT RS. 1 LAKH. ITA NO.28 0/H/2011 M/S. BHOOMATHA PARBOILED RICE & OIL MILLS, KARIM NAGAR. 4 6. IT IS EVIDENT FROM THE IMPUGNED ORDERS OF TH E LOWER AUTHORITIES, THAT IN SPITE OF REPEATED OPPORTUNITIE S GIVEN, ASSESSEE COULD NOT FURNISH THE DETAILS CALLED FOR TO THE SAT ISFACTION OF THE ASSESSING OFFICER. MORE IMPORTANTLY, THE ASSESSEE COULD NOT FILE THE CASH BOOK, WHICH IS CRUCIAL FOR DETERMINING THE COR RECTNESS OF THE ACCOUNTS MAINTAINED BY THE ASSESSEE. IN THE CIRCUM STANCES, THE ASSESSING OFFICER IS JUSTIFIED IN DRAWING ADVERSE I NFERENCE AGAINST THE ASSESSEE AS TO THE COMPLETENESS AND CORRECTNESS OF THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE, AND RESORTING T O ESTIMATION OF ASSESSEES INCOME. HOWEVER, AS FAR AS ESTIMATION O F INCOME OF THE ASSESSEE AT RS. 1 LAKH, AS AGAINST LOSS CLAIMED OF RS.3,42,580, WE FIND THAT THE ESTIMATION MADE BY THE ASSESSING OFFICER I S ON HIGH SIDE, AND IT WOULD MEET THE ENDS OF JUSTICE IF THE NET INCOME OF THE ASSESSEE IS ESTIMATED AT RS.50,000. ACCORDINGLY, ORDER OF THE CIT(A) IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO COMPLETE T HE ASSESSMENT OF THE ASSESSEE ON A NET ESTIMATED INCOME OF RS.50,000 AS AGAINST LOSS DECLARED OF RS.3,42,580. TO THIS EXTENT, GROUNDS O F THE ASSESSEE IN THIS APPEAL ARE ALLOWED IN PART. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALL OWED. ORDER PRONOUNCED ON 28.4.2011 SD/- (CHANDRA POOJARI) A CCOUNTANT MEMBER DATED THE 28TH APRIL, 2011 ITA NO.28 0/H/2011 M/S. BHOOMATHA PARBOILED RICE & OIL MILLS, KARIM NAGAR. 5 COPY FORWARDED TO: 1 . M/S. BHOOMATHA PARBOILED RICE & OIL MILLS ( KARIMNAGAR ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3-6 -643, ST. NO.9, HIMAYATNAGAR, HYDERABAD 500029. 2. ASSTT. COMMISSIONER OF INCOME - TAX, KARIMNAGAR 3. CIT (A) I II , HYDERABAD 4. COMMISSIONER OF INCOME - TAX , II , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S.