YENUGANTI SRINIVASAN, CHENNAI V. ITO NON CORPORATE WARD 8(1), CHENNAI

ITA 3120/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0566 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 15-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.3120/CHNY/2018 ! ' / ASSESSMENT YEAR : 2015-2016. SHRI. YENUGANTI SRINIVASAN, NO.64, THIRUPATHY NAGAR MAIN ROAD, VALASARAVAKKAM, CHENNAI 600 087. VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 8(1) CHENNAI. [PAN ABGPS 8645C] ( / APPELLANT) ( /RESPONDENT) # $ % / APPELLANT BY : SHRI. D. ANAND, ADVOCATE &' # $ % /RESPONDENT BY : SHRI. R. CLEMENT RAMESH KUMAR, IRS, ADDL. CIT. ( ) $ * /DATE OF HEARING : 08-08-2019 +,'! $ * /DATE OF PRONOUNCEMENT : 17-09-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-9(I/C), CHENNAI (CIT(A) FOR SHORT) DATED 28.09.2018 FOR THE ASS ESSMENT YEAR (AY) 2015-2016. ITA NO.3120/2018 :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCO ME (APPEALS)-9, IS WRONG, ILLEGAL AND OPPOSED TO FACTS OF THE INSTANT CASE. 2. THE LEARNED CIT(A)-9 ERRED IN SUSTAINING AN ADDI TION OF SUM OF RS.17,45,000/- AS THE CURRENT YEARS BUSINESS INC OME. 3. THE LEARNED CIT(A)-9 ERRED IN TREATING THE ENTIR E ADDITIONAL TURNOVER REPORTED BY THE APPELLANT IN REVISED RETUR N AS THE BUSINESS INCOME OF THE APPELLANT. 4. THE LEARNED CIT(A)-7 OUGHT TO HAVE SEEN THAT THE APPELLANT IS ENGAGED ONLY IN THE BUSINESS OF CONSTRUCTION AND DOES NOT HAVE ANY ALTERNATE SOURCE OF INCOME. THE LEARNED CI T(A)-9 OUGHT TO HAVE CONFINED HIS ADDITION TO THE GROSS PR OFIT AND ERRED IN TREATING THE ENTIRE ADDITIONAL TURNOVER OF FERED BY THE APPELLANT AS THE INCOME OF THE APPELLANT. 5. THE LEARNED CIT(A)-9 ERRED IN SUSTAINING THE ADD ITION MADE BY THE ASSESSING OFFICER A SUM OF RS.3,03,000/- UND ER THE HEAD OTHER CONSTRUCTION RECEIPTS. FOR THESE AND OTHER GROUNDS THAT MAY BE RENDERED AT THE TIME OF HEARING IT IS MOST HUMBLY PRAYED THAT THE HONBL E TRIBUNAL MAY BE PLEASED TO ALLOW THE APPELLANTS APPEAL AND THUS RENDER JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSIN ESS OF CIVIL CONSTRUCTION. THE RETURN OF INCOME FOR THE AY 2015- 2016 WAS FILED ON 23.08.2015 DISCLOSING TOTAL INCOME OF G14,20,820/- . AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT W AS COMPLETED BY THE INCOME TAX OFFICE R, NON CORPORATE WARD 8(1), CHENNAI VIDE ORDER DATED 27.12.2017 PASSED U/S. 14 3(3) OF THE ITA NO.3120/2018 :- 3 -: INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTA L INCOME OF G 1,12,28,820/-. WHILE DOING SO, THE AO MADE AN ADD ITION OF G1,09,29,990/- BEING ALLEGED DIFFERENCE ON TURNOVER BETWEEN RETURN OF INCOME, SALES TAX AND SERVICE TAX. 4. THE BRIEF FACTUAL BACKGROUND IS AS UNDER:- ASSESSEE ALONGWITH TWO OTHERS CO-OWNED A PROPERTY BEING PLOT NO.166, KISHNAMACHARI NAGAR, MADURAVOYAL MADUR A ALAPAKKAM VILLAGE, ADMEASURING 3060 SQ.FT OF LAND. THE INTE REST OF THE APPELLANT IN THE SAID PROPERTY IS ABOUT 1/3 RD . DURING THE ASST. YEAR. 2014-15, THE APPELLANT VENTURED TO DEVELOP THE SAID PROPERTY THR OUGH HIS PROPRIETARY CONCERN SRIPATHY BUILDERS AND OBTAINED PERMISSI ON TO BUILD SIX FLATS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER FOUND THAT TURNOVER OF G1,69,55,000/- WAS DISCLOSE D TO SERVICE TAX DEPARTMENT, TURNOVER OF G1,77,60,000/- WAS DISCLOS ED TO SALES TAX DEPARTMENT AND G1,00,00,000/- WAS DISCLOSED IN THE RETURN OF INCOME. WHEN ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCIE S, ASSESSEE HAD STATED THAT THE TURNOVER DISCLOSED TO THE SALES TA X DEPARTMENT IS CORRECT. HOWEVER, IN RESPECT OF SERVICE TAX, TURN OVER IS LOWER ON ACCOUNT OF SOME DIFFERENCE IN CALCULATION AND WITH REGARDS TO THE TURNOVER DISCLOSED IN THE RETURN OF INCOME, IT WAS STATED THAT RECEIPT OF G59,85,000/- WAS TO BE CONSIDERED IN THE NEXT YEAR AS THE POSSESSION ITA NO.3120/2018 :- 4 -: OF THE FLAT WAS HANDED OVER ONLY IN THE SUBSEQUENT YEAR. ACCORDINGLY, CORRESPONDING RECEIPTS AND EXPENSES WERE EXCLUDED, THEREBY RESULTING IN THE TURNOVER OF G1,00,00,000/-. IT WAS FURTHER SUBMITTED THAT THE BOOKS OF ACCOUNTS WERE LOST IN THE FLOODS AND THERE FORE ON THE TURNOVER OF G1,00,00,000/- PRESUMPTIVE RATE OF 8% WAS APPLIED. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE AS SESSEE AND COMPLETED THE ASSESSMENT BY MAKING ADDITION ON ACC OUNT OF DIFFERENCE ON ACCOUNT OF THE TURNOVER OF G77,60,00 0/- AND G17,45,000/- BEING AMOUNT RECEIVED ON SALE MADE IN THE EARLIER YEARS BUT CORRESPONDING EXPENSES WAS CLAIMED IN THIS YEA R. 5. BEING AGGRIEVED BY THE ABOVE ADDITIONS, AN APPEAL W AS PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDE R CONFIRMED THE ADDITIONS. 6. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT DURING THE ASSESSMENT YEAR 2014-15, ASSESSEE HAD COMPLETED THE SALE OF TWO FLATS BELON GING TO MS. MANJU G KURUP AND MS. LOGESWARI AND THE CORRESPONDING TU RNOVER WAS BOOKED IN THE IMMEDIATE PRECEDING YEAR AND THE INCO ME WAS OFFERED TO TAX UNDER PRESUMPTIVE RATE OF TAX. IT IS FURTH ER STATED THAT THIS AMOUNT WAS RECEIVED IN THE SUBSEQUENT ASSESSMENT YE AR I.E THE YEAR ITA NO.3120/2018 :- 5 -: UNDER CONSIDERATION AND THE SAME WAS AGAIN OFFERED TO TAX THOUGH IT WAS SUFFERED TAX IN THE EARLIER ASSESSMENT YEAR AND THEREFORE PLEADED THAT SAME NEEDS TO BE DELETED FROM THE TAXABLE INCO ME FOR THE YEAR UNDER CONSIDERATION. IT WAS FURTHER SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE POSSESSION OF THE FLATS EX CEPT ONE FLAT PURCHASED BY ONE SHRI. ANANDAKUMAR WAS HANDED OVER TO THE BUYER AND THE SALE CONSIDERATION OF THE SAID FLAT WAS OFF ERED TO TAX FOR THE YEAR UNDER CONSIDERATION AND THE ASSESSEE HAD ALSO FILED REVISED RETURN DISCLOSING ADDITIONAL INCOME OF G2,98,810/-, THERE BY ENHANCING THE RETURNED INCOME TO G14,20,800/-, WHICH CONSTITUTE 8% OF THE TOTAL GROSS RECEIPT OF G1,77,60,000/-. IT IS FURTHER SUB MITTED THAT WHEN THE INCOME IS OFFERED TO TAX UNDER PRESUMPTIVE RATE OF 8%, THERE IS NO WARRANT TO MAKE ANY FURTHER ADDITIONS. 7. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 8. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. ADMITTEDLY, ASSESSEE BEFORE US IS IN THE BU SINESS OF CIVIL CONSTRUCTION AND NO BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE ASSESSING OFFICER FOR WHATSOEVER REASONS AND THE DI SCREPANCIES BETWEEN TURNOVER REPORTED IN THE INCOME TAX RETURN, SALES TAX AND SERVICE TAX STANDS EXPLAINED BEFORE ASSESSING OFFIC ER. THE INCOME ITA NO.3120/2018 :- 6 -: WHICH WAS OFFERED TO TAX IN EARLIER YEARS CANNOT B E AGAIN TAXED IN THE SUBSEQUENT YEARS. SIMILARLY, INCOME WHICH WAS OFFER ED TO TAX IN THE SUBSEQUENT YEAR CANNOT BE TAXED IN THE PRESENT YEAR . IN THE CIRCUMSTANCES, STATUTE SPECIFIES PRESUMPTIVE RATE OF 8%, ON THE GROSS RECEIPTS. THIS CAN BE TAKEN AS GUIDING FACTOR AND THE INCOME OFFERED BY THE ASSESSEE AT G14,20,800/- CAN BE ACCEPTED AS REASONABLE PROFIT AND THERE IS NO SCOPE OF ANY FURTHER ADDITIONS. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 17TH DAY OF SEPTEMBER, 2019, A T CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER -) / CHENNAI . / DATED: 17TH SEPTEMBER, 2019. KV /0 $0& *12032'* / COPY TO: 0 1 . # / APPELLANT 3. 0 ( 4*056 / CIT(A) 5. 278 0& * 9 / DR 2. &' # / RESPONDENT 4. 0 ( 4* / CIT 6. 8:0;) / GF