Pragathi Road Carriers, Hyderabad V. Income Tax Officer, Ward-7(2), Hyderabad

ITA 343/Hyd/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1569 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 28-08-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 19-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Reasonable cause; Revised return
• Section: 143(1); 201

Judgement Text

IN THE INCOME TAX A PPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 343 / HYD/201 8 ASSESSMENT YEAR: 20 13 - 14 PRAGATHI ROAD CARRIERS, HYDERABAD. PAN A AFFP 8356 H VS. INCOME - TAX OFFICER, WARD 7 ( 2 ), HYDERABAD. A PPELLANT RESPONDENT ASSESSEE BY: S H RI K.A. SAI PRASAD REVENUE BY: S HRI SOLGY JOSE T. KOTTARAM DATE OF HEARING: 2 8 / 0 8 / 201 9 DATE OF PRONOUNCEMENT: 06 / 0 9 /201 9 O R D E R PER S HRI S. RIFAUR RAHMAN , A .M. T H IS IS AN APPEAL OF THE ASSESSEE FOR THE AY 20 13 - 1 4 AGAINST THE ORDER OF CIT(A) 3 , HYDERABAD , DATED, 0 3/1 0 /201 7 . 2. ON PERUSAL OF RECORD, WE FIND THAT THIS APPEAL WAS FILED BY THE ASSESSEE BEFORE US WITH A DELAY OF 31 DAYS. TO THIS EFFECT, THE ASSESSEE FILED AN AFFIDAVIT, AFFIRMING THEREIN THAT, THE ORDER OF THE CIT(A) WAS MISPLACED BY ITS ACCOUNTANT, DUE TO WHICH, THE DELAY WAS OCCURRED IN FILING THE APPEAL. IT WAS, THEREFORE, REQUESTED TO CONDONE THE DELAY AS IT WAS NOT INTENTIONAL AND BEYOND ITS CONTROL. SINCE, THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN FILING THE APPEAL BELATEDLY, WE CONDONE THE SAI D DELAY AND ADMIT THE APPEAL FOR HEARING AND ADJUDICATION. I.T.A. NO. 343 /HYD/1 8 PRAGATHI ROAD CARRIERS, HYD. 2 3 . BRIEF FACTS OF THE CASE ARE , THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF GOODS THROUGH ITS OWN VEHICLES AS WELL AS HIRED VEHICLES , FILED ITS O RIGINAL RETURN OF INCOME F OR AY 2 013 - 14 ON 29/09/2013 DECLARING TOTAL INCOME OF RS. 6,76,040/ - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 ( IN SHORT THE ACT). SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 27/12/2014 DECLARING TOTAL INCOME OF RS. 8,72,630 / - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICE U/S 143 ( 2) DATED 02/09/2014 WAS ISSUED AND SERVED ON THE ASSESSEE, FOR WHICH THERE WAS NO RESPONSE FROM THE ASSESSEE. HOWEVER, THE LD. AR OF THE ASSESSEE APPEARED ON 13/07/2015 AND F ILED THE REQUIRED INFORMATION. 3.1 DURING THE COURSE OF ASSESSMENT PROCEE D INGS, AR OF THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 1 3.07.2015 WAS ASKED TO FURNISH THE BOOKS OF ACCOUNTS ALONG WITH ALL BILLS AND VOUCHERS PER TAINING TO LORRY HIRE CHARGES, DELIVERY CHARGES AND OWN LORRY HIRE CHARGES TO VERIFY GENUINENESS AND CORRECTNESS OF THESE EXPENDITURE. AR ON 06.01.2016 FURNISHED INFORMATION AS PER LETTER DT.22 - 1 2 - 2015 AND PARTIAL BILLS AND VOUCHERS RELATED TO THE FREIGHT RECEIPTS AND OTHER EXPENDITURE AND ASKED FOR MORE TIME AS ALL BILLS AND VOUCHERS ARE HUGE NUMBER AND BULKY. THEREAFTER, THE AR HAS GIVEN ANOTHER OPPORTUNITY TO PRODUCE THE DETAILS. THE AR HAS PRODUCED SOME OF THE BILLS & VOUCHERS AND CASH BOOK FOR VERIFIC ATION. THE AO NOTED THAT E XCEPT THESE, AR HAS NOT PRODUCED REMAINING BILLS & VOUCHERS AND OTHER BOOKS. IN THE BILLS & VOUCHERS PRODUCED, DISCREPANCIES WERE FOUND. THEREFORE, THE AO WAS OF THE VIEW THAT I N THE ABSENCE OF INCOMPLETE BILLS & VOUCHERS SO PRODU CED AND DISCREPANCIES FOUND THEREIN, BOOKS OF ACCOUNTS MAINTAINED BY ASSESSEE WER E NOT RELIABLE. FURTHER, T HE AO OBSERVED THAT THE ASSESSEE IS OPERATING NOT ONLY HIRED I.T.A. NO. 343 /HYD/1 8 PRAGATHI ROAD CARRIERS, HYD. 3 VEHICLES BUT ALSO HIS OWN VEHICLES, W HICH A RE MORE T HAN THE HIRED ONE . ACCORDING TO HIM, THE PROFIT WILL NORMALLY BE MORE. CONSIDERING THE FACTS OF THE CASE AND IN THE ABSENCE OF ALL THE BILLS & VOUCHERS FOR VERIFICATION , THE AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE NET PROFIT @ 5% OF TURNOVER OF RS.24,32,18,9 43/ - (INDIRECT INCOME), WHICH COMES TO RS.72,96,568/ - . 4. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) . 5. BEFORE THE CIT(A), THE ASSESSEE, INTER - ALIA, CONTENDED THAT T HE ASSESSING OFFICER IS NOT JUSTIFIED IN ESTIMATI NG THE INCOME AT 5% OF THE TURNOVER WITHOUT SHOWING ANY SPECIFIC EVIDENCE OF DEFAULT TO REJECT THE BOOKS OF ACCOUNTS WHICH ARE AUDITED U/ S.44AB OF THE IT ACT. THE GENUINENESS OF THE BUSINESS TRANSACTIONS ARE CERTIFIED BY A QUALIFIED CHARTED ACCOUNTANT AND T HE A SSESSEE IS DOING BUSINESS SINCE LONG TIME, FILING REGULAR RETURN OF INCOME ADMITTING THE PROFIT DERIVED FROM THE BUSINESS. THE ASSESSING OFFICER OBSERVED THAT THE A SSESSEE IS USING ITS OWN VEHICLES WHICH FETCHES MORE INCOME, THIS MAY BE TRUE TO SOME EXTENT BUT NUMBER O F CIRCUMSTANCES OBSTRUCT THE PROFIT FROM OWN VEHICLES SUCH AS ACCIDENTS, REPAIRS AND THEFTS ETC. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) UPHELD THE ORDER OF THE AO. 7. AGGRIEVED BY THE ORDER OF CIT(A), THE A SSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED FIRST APPELLATE AUTHORITY IS NOT CORRECT EITHER ON FACTS OR IN LAW AND IN BOTH. I.T.A. NO. 343 /HYD/1 8 PRAGATHI ROAD CARRIERS, HYD. 4 2. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT AND ESTIMATING THE INCOME AT 5% OF GROSS RECEIPTS. 3. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE FACT THAT THE DISALLOWANCE ACCEPTED BY THE APPELLANT IN THE SUBSEQU ENT ASST.YEAR.2014 - 15 IS RS.7, 00 ,231 AND NOT RS.70, 00 ,231 AS MENTIONED BY THE FIRST APPELLATE AUTHORITY 4. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE FACT THAT THE INCOME ESTIMATED BY THE ASSESSING OFFICER IS ON HIGHER SIDE. 5. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND OR ALTER ANY OF THE GROUNDS AT THE TIME OF HEARING OF APPEAL. 8. LD. AR SUBMITTED BEFORE US THAT THE AO HAS ESTIMATED THE INCOME OF THE ASSESSEE @5% BY REJECTING THE BOOKS, AGAINST WHICH, ASSESSEE WAS IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED A WRITTEN SUBMISSION OBJECTING TO THE ESTIMATION OF INCOME AND WHILE SUBMITTING, BY MISTAKE, ASSESSEE HAS BROUGHT TO THE NOTICE OF LD. CIT(A), ASSESSMENT ORDER FOR AY 2014 - 15, IN WHICH, THE AO HAS DISALLOWED TO THE EXTENT OF RS. 7,00,231/ - , BUT, INSTEAD OF QUOTING THE ABOVE AMOUNT, BY MISTAKE, THE ASSESS EE HAS MENTIONED AS RS. 70,00,231/ - . BASED ON THE ABOVE FINDINGS FOR THE AY 2014 - 15, LD. CIT(A) HAS CONFIRMED THE ESTIMATION OF INCOME IN THIS AY. HE SUBMITTED A SMALL WORKING SHEET. LD. AR SUBMITTED THAT BECAUSE OF WRONG AMOUNT, DUE TO TYPOGRAPHICAL ERROR , ASSESSEE HAS BROUGHT TO THE NOTICE OF CIT(A), WHICH WAS THE MATERIAL APPLIED BY THE CIT(A) TO COME TO THE CONCLUSION THAT THE ESTIMATION MADE BY THE AO IS PROPER. HE BROUGHT TO OUR NOTICE THE AYS FOR AY 2011 - 12, 2012 - 13, AND 201 4 - 1 5 AND IN ALL THESE AYS , AO HAS CONSISTENTLY DISALLOWED CERTAIN AMOUNTS AND THE INCOME IS IN AROUND 2%. HE CONTENDED THAT ESTIMATION OF INCOME AT 5% IN THIS AY IS TOO HIGH. I.T.A. NO. 343 /HYD/1 8 PRAGATHI ROAD CARRIERS, HYD. 5 9. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY BILLS OR VOUCHERS BEFORE ANY TAX AUTHORITIES AND HE SUPPORTED THE FINDINGS OF LD. CIT(A). 10. IN THE REJOINDER, THE LD. AR SUBMITTED THAT ALL THE VOUCHERS WERE ALREADY SUBMITTED BEFORE THE AO. IN THIS REGARD, HE BROUGHT TO OUR NOTICE THE ASSESSMENT ORDERS. 11. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT ASSESSEE HAS SUBMITTED BEFORE US THE ASSESSMENT ORDERS FOR THE AYS 2011 - 12, 2012 - 13 & 2014 - 15 AND IN ALL THESE AYS, THE AO HAS DISALLOWED TO THE EXTENT OF RS. 2,42,700/ - IN AY 2011 - 12, RS. 2,18,430/ - IN AY 2012 - 13 AND RS. 7,00,231/ - IN AY 2014 - 15. SINCE THE AO WAS REGULARLY VERIFYING ALL THE RECORDS OF THE ASSESSEE AND COMPLETED THE RESPECTIVE ASSESSMENTS BY DISALLOWING CERTAIN AMOUNTS IN THE RANGE OF RS. 2 TO 7 LAKHS AN D FURTHER ASSESSEES BOOKS, WHICH WERE SUBMITTED BEFORE THE AO, ARE REGULARLY AUDITED BY A QUALIFIED ACCOUNTANT, BY FOLLOWING THE RATIONALE OF CONSISTEN CY , WE REJECT THE CONTENTION OF THE AO TO ESTIMATE THE INCOME OF THE ASSESSEE. FOR THE SAKE OF JU STICE, WE REMIT THIS ISSUE BACK TO THE FILE OF AO TO VERIFY THE INFORMATION SUBMITTED BY THE ASSESSEE BEFORE HIM AND COMPLETE THE ASSESSMENT UNDER CONSIDERATION IN LINE WITH THE OTHER ASSESSMENTS MADE BY OTHER AOS. ACCORDINGLY, GROUNDS RAISED BY THE ASSESS EE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 343 /HYD/1 8 PRAGATHI ROAD CARRIERS, HYD. 6 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 5 T H SEPTEMBER , 2019. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 5 TH SEPTEMBER , 201 9. KV COPY FORWARDED TO: 1. PRAGATHI ROAD CARRIERS, CH. PARTHASARATHY & CO., 1 - 1 - 298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST. NO. 1, ASHOKNAGAR, HYDERABAD 500 020. 2 . ITO, WARD NO. 7 ( 2 ), SIGNATURE TOWERS, 8 TH FLOOR, OPP. BOTANICAL GARDENS, KONDAPUR, HYDERABAD . 3 . CIT (A) - 3 , HYDERABAD 4. PR. CIT - 3 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE