G.V.V.Satyanarayana, Kadiyapulanka V. The Income Tax Officer, Ward-2(3), , Rajahmundry

ITA 38/VIZ/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3985 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 27-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Keywords: Set aside
• Section: 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. 3 8 /VIZ/2020 (ASST. YEAR : 2012 - 13 ) G.V.V. SATYANARAYANA, D.NO. 5 - 103/1, KADIYAPULANKA TOWER STREET , KADIYAM MANDAL, EAST GODAVARI DISTRICT. V S. ITO, WARD - 2( 3 ) RAJAMAHENDRAVARAM. PAN NO. AJAPG 2742 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI, ADVOCATE. DEPARTMENT BY : SHRI B.SATYANARAYANA RAJU , SR. DR DATE OF HEARING : 15 / 02 /2021 . DATE OF PRONOUNCEMENT : 17 / 0 2 /2021 . O R D E R PER N.K. CHOUDHRY , JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 04 /11/2019 IMPUGNED HEREIN PASSED BY THE LD.CIT(A), RAJAMAHENDRAVARAM U/SEC. 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') FOR THE A.Y. 20 1 2 - 1 3 . 2 ITA NO. 38 / VIZ /2020 ( G.V.V. SATYANARAYANA ) 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT(A) IS NOT CORRECT IN DISMISSING THE APPEAL PREFERRED BY THE ASSESSEE AND SHOULD HAVE APPRECIATED THE FACTS OF THE CASE IN APPEAL. 2. THE LD. CIT(A) IS NOT CORRECT IN SUSTAINING THE ADDITION OF RS. 9,68,416/ - WHICH IS THE ESTIMATED PROFITS IN BANANA TRADE. 3. THE LD. CIT(A) SHOULD HAVE APPRECIATED THE COMPARABLE CASES SUBMITTED BY THE ASSESSEE TO ASSESS THE PROFIT FROM BANANA BUSINESS; AND 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 3 . THE ONLY ISSUE UNDER CHALLENGE IN THIS APPEAL RELATES TO AFFIRMATION OF ADDITION OF RS. 9,68,416/ - QUA ESTIMATED PROFIT @8% IN BANANA TRADE. AS PER THE AO, THE CASH DEPOSITS AS CONFIRMED BY THE BUYERS OF THE ASSESSEE WERE AT RS. 1,21,05,200/ - ON WHICH THE ASSESSEE DID N O T OFFER ANY INCOME IN HIS RETURN OF INCOME, T HEREFORE, TREATING THE SAID CASH DEPOSITS AS SALE PROCEEDS OF THE ASSESSEE QUA BANANA TRADING , THE INCOME IN RESPECT THEREOF WAS ESTIMATED @8% WHICH WORKED OUT TO RS. 9,68,416/ - AND RESULTED INTO ADDITION TO THE TOTAL INCOME OF THE ASSESSEE . 4 . ON APPEAL THE LD. CIT(A), AFFIRMED THE ACTION OF THE AO BY HOLDING AS UNDER: - 5. I HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD , WRITTEN SUBMISSIONS MADE BY THE APPELLANT AND THE 3 ITA NO. 38 / VIZ /2020 ( G.V.V. SATYANARAYANA ) ASSESSMENT ORDER. THE APPELLANT CHALLENGED THE ONLY ADDITION MADE ON ACCOUNT OF INCOME ESTIMATED ON THE SALE PROCEEDS OF BANANA PLANTAINS @8% , WHICH WORKS OUT AT RS. 9,68,416/ - . THE A PPELLANT STATED THAT THE SAID ESTIMATION IS ON HIGHER SIDE. THE APPELLANT HAS NOT FURNISHED ANY BOOKS OF ACCOUNT IN RESPECT OF BANANA PLANTAINS BUSINESS NOR HAS MENTIONED INCOME PARTICULARS FROM THIS BUSINESS WHILE FILING THE RETURN. DURING THE ASSESSMENT PROCEEDINGS ONLY, THE APPELLANT HAS EXPLAINED ABOUT THE CASH DEPOSITS MADE BY HIM BY WAY OF COMMISSION FROM THIS BUSINESS. HENCE, THE AO HAS TREATED THESE CASH DEPOSITS AS SALE PROCEEDS OF THE APPELLANT AND THE INCOME IS EST IMATED @8%. I HAVE PERUSED THE MATERIAL PLACED ON RECORD BY THE APPELLANT IN RESPECT OF VISWAJANANI FRUIT COMPANYS AUDIT REPORTS. HOWEVER, THIS CASE IS NOT SQUARELY APPLICABLE TO THE APPELLANTS CASE AS THERE IS A DIFFERENCE IN THE NATURE OF TRADE. 5. THE ASSESSEE BEING AGGRIEVED PREFERRED THIS APPEAL. 6. HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS CLAIMED THAT IT IS DEALING WITH TWO TRADES I .E. LIQUOR AND BANANA TRADING AND BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT IN BANANA PLANTATION BUSINESS, THE ASSESSEE AT THE MOST MAKING A MARGIN OF 1.5% TO 2% AS COMMISSION FROM THE SALES CONDUCTED ON BEHALF O F THE FARMERS GROWING BANANAS. FURTHER , THE ASSESSEE ALSO PLACED A COMPARABLE CASE I.E. VISWAJANANI FRUIT COMPANY FOR THE A.Y. 2012 - 13 WHEREIN THE GROSS 4 ITA NO. 38 / VIZ /2020 ( G.V.V. SATYANARAYANA ) PROFIT WAS CLAIMED BY THE SAID ASSESSEE AT 3.6 %, HOWEVER T HE LD. CIT(A) DID NOT GET IMPRESS E D UPON THE SUBMISSIONS OF THE ASSESSEE AND ULTIMATELY AFFIRMED THE ADDITION UNDER CHALLENGE BY QUOTING THAT THE COMPARA BLE CASE CITED BY THE ASSESSEE IS NOT SQUARELY APPLICABLE TO THE ASSESSEES CASE AS THERE IS DIFFERENCE IN THE NATURE OF TRADE . IN OUR CONSIDERED VIEW, THE LD . CIT(A) DID MAKE ANY ANALYSIS QUA COMPARABLE CASE AND OF THE ASSESSEE AND PASSED THE ORDER IN IN CRYPTIC MANNER AND AFFIRMED THE ESTIMATION @8% . THE LD. CIT(A) FURTHER FAILED TO BASE AFFIRMATION OF ESTIMATION @8% ON ANY MATERIAL AND/OR CIRCUMSTANCES WHILE IGNORING THE COMPARABLE CASE . FROM THE PERUSAL OF INCOME TAX RETURN FILED BY THE VISWAJANANI FRUIT COMPANY FOR THE A.Y. 2012 - 13 AS QUOTED BY THE ASSESSEE AS A COMPARABLE CASE, IT REFLECTS THAT THE PROFIT FROM BANANA TRADING HAS BEEN ESTIMATED @ 3.6% ONLY. THOUGH THE LD . DR SUPPORTED T HE ORDERS OF THE AUTHORITIES BELOW , HOWEVER FAILED TO BRING ON RECORD ANY MATERIAL CONTRARY TO THE COMPARABLE CASE. THOUGH IT IS NOT THE CASE OF THE ASSESSEE THAT COMPARABLE CASE HAS ATTAINED FINALITY, HOWEVER THERE IS NO MATERIAL TO SUBSTANTIATE THAT THE COMPARABLE CASE IS UNDER CHALLENGE OR OTHERWISE HAS NOT ATTAINED FINALITY. THE ASSESSEES CASE AND COMPARABLE CASE ALSO RELATES TO A.Y. 2012 - 13 , HENCE, CONSIDERING THE COMPARABLE CASE (A.Y. 2012 - 13) AND ESTIMATION THEREOF QUA T RAD ING OF BANANA, WE ARE INCLINED TO ALLOW THE PLEA OF THE ASSESSEE AND THEREFORE DIRECT THE AO TO RE - COMPUTE THE ESTIMATION @ 3.6% OF THE TURNOVER QUA BANANA TRADING . CONSEQUENTLY , THE IMPUGNED ORDER IS SET ASIDE. 5 ITA NO. 38 / VIZ /2020 ( G.V.V. SATYANARAYANA ) 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 7 T H DAY OF FEB . , 2021 . S D / - S D / - (D.S. SUNDER SINGH) ( N.K. CHOUDHRY ) ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 1 7 T H FEBRUARY , 20 2 1 . VR/ - COPY TO: 1. THE ASSESSEE - G.V.V. SATYANARAYANA, D.NO. 5 - 103/1, KADIYAPULANKA TOWER STREET, KADIYAM MANDAL, EAST GODAVARI DISTRICT. 2. THE REVENUE ITO, WARD - 2(3), RAJAMAHENDRAVARAM. 3. THE PR. CIT - 2 , VISAKHAPATNAM. 4. THE CIT(A) , RAJAMAHENDRAVARAM 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.