Jaya Sree Julakanti , Hyderabad V. Income Tax Officer, Ward-15(1), Hyderabad

ITA 347/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4393 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 20-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment
• Section: 143(3); 201

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES : BENCH A HYDERABAD (THROUGH VIDEO CONFERENCE ) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 347 /HYD./201 8 ASSESSMENT YEAR : 201 3 - 14 SMT JAYA SREE JULAKANTI . VS. ITO , WARD 15( 1 ) HYDERABAD HYDERABAD [PAN: A FOPJ2429K ] (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI S.RAMA RAO, ADV FOR REVENUE: SHRI SUNIL KUMAR PANDEY, D.R. DATE OF HEARING : 24 /02/2021 DATE OF PRON OUNCEMENT : 20 /05/2021 O R D E R PER S.S. GODARA, J.M. TH IS ASSESSEE S APPEAL FOR AY 2013 - 14 ARISE S FROM CIT(A) - 7 HYDERABADS ORDER DATED 15.1 2. 201 7 PASSED IN CASE NO. 257 /201 5 - 2 16 INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 FOR SHORT THE ACT . H EARD BOTH THE PARTIES . C ASE FILE P ERUSED. 2. C OMING TO THE ASS ESSEES FIRST AND FOREMOST SUBSTANTIVE GRIEVANCE THAT BOTH THE L OWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN ESTIMATING 5% OF THE COST OF GOODS SOLD AS INCOME IN RETAIL LIQUOR BUSINESS, MR. RAMA RAO INVITED OUR ATTENTION TO THE CIT (A)S DETAILED DISCUSSION IN PARA 5.2 THAT THIS TRIBUNAL S COORDINATE BENCH DECISION ( S ) HAVE ALREADY ADOPTED 2 TO 3% AS THE INCOME ELEMENT THEREOF. W E FIND NO MERIT IN ASS ESSEES INSTANT STAND PER SE SINCE NEITHER SUCH ESTIMATION CAN BE TAKEN AS A PRECEDENT AS PER (1993) 202 ITR 222 (AP) CIT VS B.R. CONSTRUCTIONS (FB) NOR HE HAS FILED ON RECORD A LL THE CORRE SPONDING DETAILS IN SUPPORT OF SUCH A MEAGER PROFIT RATE . T HE FACT ALSO REMAINS THAT THE D EPARTMENT HAS NOT DRAWN ANY COMPARATIVE CHART OF THE PROFIT ELEMENT IN RETAIL LIQUOR SALES BUSINESS IN AND AROUND ASSESSEES LOCALITY. FACED WITH THIS SITUATION W E DEEM IT PROPER TO RESTRICT THE IMPUGNED 5% PROFIT ELEMENT TO 4.5% ONLY WITH THE RIDER THAT THE SAME SHALL NOT BE TREATED AS A PRECEDENT IN ANY OTHER CASE. THIS FIRST SUBSTANTIVE GROUND IS TREATED AS PARTLY ALLOWED IN FOREGOING TERMS. 3. LEARNED COUNSE L IS FAIR ENOUGH IN NOT PRESSING THE ASSESSEES SECOND SUBSTANTIAL GRIEVANCE CHALLENGING CORRECTNESS OF BOTH LOWER AUTHORITIES ACTION IN MAKING UNEXPLAINED INVESTMENTS ADDITION IN 3 CA R OF RS. 14 , 02 , 742 / - PROVIDED SHE IS GRANTED TELESCOPING BENEFIT Q UA THE FOREGOING ISSUE AGAINST THIS LATTER ISSUE . THE R EVENUE IS EQUALLY FAIR IN NOT DENYING THE FACT THAT NO SUCH TELE SCOPING HAS BEEN CONSIDERED IN BOTH THE LOWER AUTHORITIES ORDERS . WE THEREFORE UPHOLD THE IMPUGNED UNEXPLAINED INVESTMENT ADDITION OF RS.14,02,742/ - IN PRINCIPLE AND DIRECT THE ASSESSING OFFICER TO GRANT TELESCOPING OF NET INCOME ADDITION PERTAINING TO THE FOREGOING FIRST ISSUE AGAINST THE SAME AS PER LAW. THIS SECO ND SUBSTANTIVE GRIEVANCES TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 4. THE ASSESSEES THIRD SUBSTANTIVE GRIEVANCE AVERS THAT BOTH THE L OWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN TREATING A SUM OF RS. 12 LAKHS AS UNEXPLAINED IN THE COURSE OF ASSESSMENT AS UPHELD IN THE CIT(A)S ORDER . THE CIT(A)S DETAILED DISCUSSION QUA INSTANT THIRD ISSUE READS AS FOLLOWS : 7.1. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED AS UNDER: - THE AO IS OF THE VIEW THA T THE OPENING BALANCE OF RS12 LAKHS CANNOT BE ACCEPTED AS THE ASSESSEE DID NOT PROVIDE ANY INFORMATION. THE APPELLANT IS SUBMITTING COPIES OF THE RETURNS OF INCOME SHOWING THE AGRICULTURAL INCOME FROM HOUSE PROPER AND INCOME FROM INTEREST IT CAN BE SEEN FROM THE RETURNS OF INCOME FILED THAT SHE HAD SUBSTANTIAL SOURCES AND THE OPENING CAPITAL OF RS12 LAKHS INVESTED IN THE BUSINESS WERE FROM OUT OF SUCH SOURCES. THEREFORE, AO IS NOT JUSTIFIED IN TREATING THE ENTIRE OPENING BALANCE OF RS12 LAKHS AS INCOME O F THE ASSESSEE. 4 7.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT CAREFULLY. THE APPELLANT DID NOT FURNISH AY DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER ABOUT THE DETAILS OF PAST SAVINGS EVEN BEFORE THE UNDERSIGNED THE APPELLANT DID NOT FU RNISH ANY DETAILS ABOUT AGRICULTURAL ACTIVITIES CARRIED OUT IN THE PAST, THE EVIDENCES IN SUPPORT OF CLAIM HENCE THE ADDITION IS CONFIRMED. 4.1. L EARNED COUNSEL REITERATED ASSESSEES STAND THAT THE IMPUGNED SUM OF RS. 12 LAKHS REPRESENTS ASSESSEES PAST SAVINGS AND CASH WITHDRAWALS ETC . N O DETAILS MUCH LESS H ER CASH FLOW STATEMENT TO THIS EFFECT F O RM PART OF THE CASE RE CORD BEFORE US . A ND ALSO THAT SHE HAD FURTHER FACED SIMILAR UNEXPLAINED INVESTMENT ADDITION IN CAR (SUPRA) AS WELL . WE THUS FIND NO REASON TO INTERFERE IN THE IMPUGNED ADDITION , IN VIEW OF ALL THESE FACTS AND CIRCUMSTANCES . T HE SAME IS DIRECTED TO BE CONFIRMED . 4.2. MR. RAMA RAO D ID NOT PRESS FOR ASSESSEES LAST SUBSTANTI VE GROUND CHALLENGING INTEREST INCOME AD DITION OF RS.5,334/ - KEE PING IN MIND SMALL NESS OF THE AMOUNT INVOLVED . THIS GROUND IS REJECTED ACCORDINGLY . THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOVE TERMS. PRONOUNCED IN OPEN COURT ON 20 TH MAY, 2021. SD/ - SD/ - (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 20 TH MAY, 2021. 5 * GMV COPY OF THE ORDER FORWARDED TO: 1. SMT JAYA SREE JULAKANTI, C/O SRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. ITO, WARD 1 5 (1), HYDERABAD. 3 . ACIT, RANGE 15, HYDERABAD - 4 . CIT (A) - 7 , HYDERABAD. 5 . PR.CIT - 7 , HYDERABAD 6 .D R, ITAT, HYDERABAD. 7 . GUARD FILE.