M/s Elite Tourist home, Trichur V. ADCIT, Trichur

ITA 289/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65014 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: R KRISHNA IYER
• Keywords: Revised return
• Section: 263

Judgement Text

1 ITA NO.289/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO.289/COCH/2011 (ASSESSMENT YEAR 2006-07) M/S ELITE TOURIST HOME VS THE ADDL C.I.T. RANGE- 2 THOZHUPADAM ROAD TRICHUR CHELAKKARA, TRICHUR PAN : AACFG5029M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R KRISHNA IYER RESPONDENT BY : SMT. S VIJAYAPRABHA DATE OF HEARING : 04-12-2012 DATE OF PRONOUNCEMENT : 07-12-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER U/S 263 PASSED BY THE ADMINISTRATIVE COMMISSIONER DATED 29- 03-2011 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR T HE TAXPAYER SUBMITTED THAT THE TAXPAYER HAS FILED THE RETURN OF INCOME ON 31-10-2006 AND THE REVISED RETURN WAS FILED ON 04-12-2007. IN THE ORI GINAL RETURN OF INCOME, 2 ITA NO.289/COCH/2011 THE TAXPAYER HAS OFFERED RS.10,09,060 AS INCOME FOR TAXATION. IN THE REVISED RETURN, THE TAXPAYER HAS OFFERED ADDITIONAL INCOME OF RS.2,58,000. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSING O FFICER MADE A LUMP SUM ADDITION OF RS.6 LAKHS ON SALE OF LIQUOR. ACCORDIN G TO THE LD.REPRESENTATIVE, THE ASSESSING OFFICER HAS FIXED THE INCOME AT RS. 1 3,51,060. REFERRING TO THE INCOME DETERMINED FOR THE EARLIER ASSESSMENT YEAR, THE LD.REPRESENTATIVE SUBMITTED THAT THE INCOME ESTIMATED BY THE ASSESSIN G OFFICER FOR THE YEAR UNDER CONSIDERATION IS VERY REASONABLE. HOWEVER, T HE ADMINISTRATIVE COMMISSIONER FOUND THAT THE ADDITIONAL INCOME OFFER ED IN THE REVISED RETURN TO THE EXTENT OF RS.2,58,000 IS ABOUT 140% O F THE COST OF GOODS. SINCE THERE WAS A DIFFERENCE OF RS.9,54,880 BETWEEN THE ESTIMATED SALES AND THE ACTUAL SALES IN THE REVISED RETURN, THE DIF FERENCE SHALL BE TREATED AS INCOME. ACCORDING TO THE LD.REPRESENTATIVE, SINCE THE ASSESSING OFFICER HAS REASONABLY ESTIMATED THE LUMP ADDITION OF RS.6 LAKH S ON THE BASIS OF THE REVISED RETURN, IT CANNOT BE SAID THAT THE ACTION O F THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REV ENUE. THE ASSESSING OFFICER COMPUTED THE INCOME ON ONE METHOD AND THE C OMMISSIONER OF INCOME-TAX(A) HAS COMPUTED THE INCOME ON THE OTHER METHOD. THEREFORE, IT CANNOT BE SAID THAT THE ORDER OF THE ASSESSING O FFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. ON THE CONTRARY, SMT. S VIJAYAPRABHA, THE LD.DR S UBMITTED THAT IN THE REVISED RETURN, THE TAXPAYER DISCLOSED THE SALE VAL UE AT RS.2,40,86,849 WHEREAS IN THE ORIGINAL RETURN IT WAS AT RS.2,31,31 ,969. THE INCOME AS PER THE ORIGINAL RETURN WAS RS.6,96,880. THE DIFFERENC E BETWEEN THE TURNOVER 3 ITA NO.289/COCH/2011 TO THE EXTENT OF RS.9,54,880 WAS NOT TAKEN AS INCOM E BY THE ASSESSING OFFICER. ACCORDING TO THE LD.DR, WHEN THE SALE VAL UE OF THE GOODS WAS DECLARED AT RS.2,40,86,849 INSTEAD OF RS. 2,31,31,9 69 THE DIFFERENCE OF RS.9,54,880 HAS TO BE TAKEN AS INCOME. THIS WAS NO T DONE BY THE ASSESSING OFFICER. THEREFORE, THE ADMINISTRATIVE COMMISSIONE R FOUND THAT THERE WAS AN ERROR IN THE ORDER OF THE ASSESSING OFFICER WHIC H IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY THE ASSESSING OFFICER WAS DIRECTED TO REDO THE ASSESSMENT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THE TAXPAYER HAS FILED A REVISED RETURN DISCLOSING THE SALES TURNOVE R AT RS.2,40,86,869. SALES AS PER THE BOOKS OF ACCOUNT WAS RS.2,31,31,969. TH EREFORE, AN AMOUNT OF RS.9,54,880 WAS DISCLOSED AS SALES OUTSIDE THE BOOK S OF ACCOUNT. IT IS NOT KNOWN WHETHER THE CORRESPONDING PURCHASES WERE ALSO EFFECTED OUTSIDE THE BOOKS OF ACCOUNT. IF THE CORRESPONDING PURCHAS ES WERE ALSO MADE OUTSIDE THE BOOKS OF ACCOUNT, THEN WHAT IS TO BE AD DED IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH SALES. IF THERE WAS NO CO RRESPONDING PURCHASE AND THE GOODS ORIGINALLY PURCHASED WAS SOLD AT A HI GHER COST OF RS.2,40,86,849, THEN THE DIFFERENCE OF RS.9,54,880 HAS TO BE TREATED AS INCOME. THESE FACTS NEED TO BE VERIFIED. THEREFOR E, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADMINISTRATIVE COMMISSI ONER HAS RIGHTLY EXERCISED HIS JURISDICTION AND DIRECTED THE ASSESSIN G OFFICER TO REDO THE ASSESSMENT. THIS TRIBUNAL DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE 4 ITA NO.289/COCH/2011 LOWER AUTHORITY. ACCORDINGLY, THE ORDER OF THE ADM INISTRATIVE COMMISSIONER IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE TAXPAYER STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07 TH DAY OF DECEMBER, 2012. (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 07 TH DECEMBER, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH 5 ITA NO.289/COCH/2011 1. DATE OF DICTATION : 04-12 2. DATE OF PLACING THE DRAFT ORDER BEFORE THE MEMBER : 05-12 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.PS : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER: 5. DATE OF RETURN OF THE ORDER TO PS AFTER APPROVAL : 6. DATE OF PRONOUNCEMENT : 7. DATE ON WHICH THE FILE ALONG WITH THE ORDER SENT TO BC : 8. NO. OF PAGES OF DICTATION PADS ATTACHED TO THE FILE : 06 9. NO. OF PAGES OF DRAFT COPY OF THE ORDER ATTACHED TO THE FILE :