Mettupalayam Sabapati Palanivelu, Visakhapatnam V. The Income Tax Officer, Ward-1, , Srikakulam

ITA 326/VIZ/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4838 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 23-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Section: 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI N.K. CHOUDHRY, HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON'BLE ACCOUNTANT MEMBER I.T.A. NO. 326 /VIZ/2019 (ASST. YEAR : 201 3 - 1 4 ) METTUPALAYAM SABAPATI PALANIVELU, PLOT NO.6, ROOM NO.7, BANKERS COLONY, BEHIND DEEPAMAHAL, SRIKAKULAM. VS. INCOME TAX OFFICER WARD - 1 , SRIKAKULAM. PAN NO. AFQPP 9356 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.SUBRAHMANYAM , FC A DEPARTMENT BY : SHRI B.RAMA KRISHNA , SR. DR DATE OF HEARING : 13 / 09 /2021 . DATE OF PRONOUNCEMENT : 23 / 0 9 /2021 . O R D E R PER BENCH THIS APPEAL HAS BEEN PREFERRED BY THE A SSESSEE AGAINST THE ORDER DATED 03 / 05 /2019 IMPUGNED HEREIN PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 2 [FOR SHORT , LD. COMMISSIONER] , GUNTUR U/SEC. 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') FOR THE A.Y. 20 13 - 1 4 . 2. HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THOUGH , THE ASSESSEE HAS RAISED FIVE GROUNDS OF 2 ITA NO. 326 / VIZ /2019 ( METTUPALAYAM SABAPATI PALANIVELU ) APPEAL, HOWEVER, AT THE TIME OF HEARING, HE CONFINE D ONLY TO GROUND NO.2 WHICH RELATES TO CONFIRMATION OF ADDITION MADE BY THE AO ON THE GROSS RECEIPTS PERTAINING TO MACHINERY HIRE CHARGES. 3 . THE AO CONSIDER E D THE MACHINERY HIRE CHARGES AT RS. 9,82,500/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE AND ALSO ESTIMATED THE INCOME @ 12.5% ON THE GROSS RECEIPTS, AGAINST WHICH THE ASSESSEE WENT ON APPEAL BEFORE THE L D. COMMISSIONER. THE L D. COMMISSIONER SCALED DOWN THE ESTIMATED INCOME TO 8%, HOWEVER, SUSTAINED THE ADDITION QUA MACHINERY HIRE CHARGES RECEIVED FROM OTHERS WHENEVER THE MACHINE RY IS NOT USED FOR HIS OWN BUSINESS BY HOLDING THAT THE ASSESSEES REGULAR BUSINESS HAS NO CONNECTION WITH THE HIRING MACHINERY ACTIVITY . REGULAR BUSINESS IS SEPARATE AND HIRING MACHINERY IS A SEPARATE ACTIVITY . THE L D. COMMISSIONER FURTHER HELD THAT THE AO HAS ESTIMATED PROFIT ONLY ON ASSESSEES REGULAR BUSINESS. 4 . LD. A R DURING THE COURSE OF ARGUMENT EMPHASISED THAT BECAUSE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED AT 8% BY THE L D. COMMISSIONER, THEREFORE NO SEPARATE ADDITION IS WARRANTED . LD. AR , ALTERNATIVELY , PRAYED FOR SUST ENANCE OF ADDITION @ 25% OF THE MACHINERY HIRE CHARGES . 5. ON THE OTHER HAND, LD. DR THOUGH REFUTED THE CLAIM OF THE ASSESSEE, HOWEVER CONTENDED FOR AFFIRMATION OF ADDITION AT LEAST TO THE EXTENT OF 50% OF THE RECEIPTS. 6 . CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES AS THE INCOME OF THE ASSESSEE HAS ALREADY BEEN ESTIMATED @8% AND ACCEPTED BY THE PARTIES , HOWEVER, AS PRAYED FOR BY THE ASSESSEE 3 ITA NO. 326 / VIZ /2019 ( METTUPALAYAM SABAPATI PALANIVELU ) AND AGREED BY THE LD DR , FOR THE ENDS OF JUSTICE WE DEEM IT APPROPRIATE TO ADD 50% OF THE MACHINER Y HIGHER CHARGES IN THE INCOME OF THE ASSESSEE INSTEAD OF 100% OF THE GROSS RECEIPT ON THAT ACCOUNT AS DONE BY THE AUTHORITIES BELOW. HENCE ORDERED ACCORDINGLY. 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PAR T LY ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 3 R D DAY OF SEP. , 2021 . S D / - S D / - (D.S. SUNDER SINGH) ( N.K. CHOUDHRY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 3 R D SEP. , 20 2 1 . VR/ - COPY TO: 1. THE ASSESSEE - METTUPALAYAM SABAPATI PALANIVELU, PLOT NO.6, ROOM NO.7, BANKERS COLONY, BEHIND DEEPAMAHAL, SRIKAKULAM. 2. THE REVENUE INCOME TAX OFFICER, WARD - 1, SRIKAKULAM. 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.