Chundi Venkata Rambabu, Visakhapatnam V. THE Addl.CIT, Visakhapatnam

ITA 50/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6522 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 08-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Depreciation; Period of limitation; Assessment record; Time period of passing order
• Section: 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 5 0 /VIZ/ 201 6 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) SRI CHUNDI VENKATA RAMBABU PROP. LASYA CONSTRUCTIONS D.NO.33 - 14 - 312 ALLIPURAM VISAKHAPATNAM - 530 004 [ PAN : A DUPC7828H ] VS. THE ADDL.CIT, RANGE - 1 VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI I KAMA SASTRY, AR / RESPONDENT BY : S HRI M.K.SETHI , DR / DATE OF HEARING : 1 5 . 11 .2017 / DATE OF PRONOUNCEMENT : 22 . 11 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) - 1, [CIT(A)], VISAKHAPATNAM VIDE 2 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM ITA NO.731/2014 - 15/ADDL.CIT,R - 1, VSP/2015 - 16 DATED 30.11.2015 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE ASSESSEE FILED FOLLOWI NG GROUNDS OF APPEAL : (I) THE LD.CIT(APPEALS) - 1, VISAKHAPATNAM IS NOT CORRECT IN REJECTING THE PLEA OF THE ASSESSEE THAT THE ASSESSMENT ORDER IS BARRED BY LIMITATION UNDER SECTION 153 OF THE INCOME TAX ACT, 1961. (II) THE LD.CIT(APPEALS) - 1, VISAKHAPATNAM IS NOT CORRECT IN CONFIRMING THE ESTIMATION OF INCOME AT 12% OF THE GROSS CONTRACT RECEIPTS AS WAS DONE BY THE LD.AO. (III) THE LD.CIT ( APPEALS) - 1, VISAKHAPATNAM IS NOT CORRECT IN CONFIRMING THE FOLLOWING ADDITIONS : A. UNEXPLAINED CASH DEPOSITS IN BANK 5,60,000 B. UNEXPLAINED INCREASE IN CAPITAL 3,38,400 C. ADDITION TOWARDS SQUARED UP LOAN 5,00,000 (IV) THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND, MODIFY, AMEND OR ALTER ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 3 . GROUND NO.1 RELATES TO LIMITATION FOR PASSING THE ASSESSMENT ORDER. THIS ISSUE WAS AGITATED BEFORE THE LD.CIT(A) BY THE ASSESSEE AND THE LD.CIT(A) DISMISSED THE ASSESSEES GROUND STATING THAT THE ASSESSEE DID NOT PLACE ANY MATERIAL TO SUBSTANTIATE THE ALLEGATION THAT THE ASSESSMENT ORDER WAS PASSED BEYOND THE TIME LIMIT ALLOWED IN THE ACT, HENCE, T HE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. 3 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM 4 . APPEARING FOR THE ASSESSEE, LD.AR ARGUED THAT IN THE INSTANT CASE, THE ASSESSMENT ORDER WAS SERVED ON 22.04.2014 AGAINST THE ORDER DATED 28.03.2014. THEREFORE, THE LD.AR ARGUED THAT THE ASSESSMENT ORDER WOULD NOT HAVE BEEN PASSED ON 28.03.2014. THE LD.AR FURTHER ARGUED THAT THE DEPA RTMENT DID NOT PLACE ANY EVIDENCE TO ESTABLISH THAT THE ASSESSMENT ORDER WAS PASSED ON 28.03.2014 AND THE SAME WAS DISPATCHED ON OR BEFORE 31.03.2014, I.E. WITHIN THE TIME LIMIT FOR PASSING THE ASSESSMENT ORDER , HENCE CONTENDED THAT THE ASSESSMENT ORDER WA S BARRED BY LIMITATION. THE LD.AR RELIED ON THE FOLLOWING DECISIONS. (I) CIT VS. SINCERE CONSTRUCTION, (ALL) 89 CCH 0216 (II) HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT AND DCIT, CENTRAL CIRCLE - 1(3) VS. M/S BJN HOTELS LTD., ORDER DATED 2 ND FEB.2016 (III) HONBLE DELHI HIGH COURT IN THE CASE OF ST MICRO ELECTRONICS PRIVA TE LIMITED VS. DCIT &ORS. W.P.(C) NO.3648/2014 DATED 18 TH MAY 2016. 5 . ON THE OTHER HAND, LD.DR ARGUED THAT AS PER THE PROVISIONS OF SECTION 153, ASSESSMENT ORDER IS REQUIRED TO BE P ASSED WITHIN TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E. BEFORE 31.03.2014. AS PER THE 4 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM INFORMATION AVAILABLE ON RECORD, THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ON 28.03.2014 WHICH WAS SERVED ON THE ASSESSEE ON 22.04.2014. IN SUPPO RT THE LD.DR PLACED THE SNAP SHOT OF THE SYSTEM UPLOADING THE DEMAND. THE LD.DR FURTHER SUBMITTED THAT THE ASSESSEE DID NOT PLACE ANY EVIDENCE TO ESTABLISH THAT THE ASSESSMENT ORDER WAS PASSED BEYOND THE LIMITATION PERIOD AVAILABLE AS PER SECTION 153 OF I. T.ACT . THE ASSESSEE HAS NOT EVEN SUBMITTED ANY AFFIDAVIT WITH REGARD TO THE FACT THAT THE ASSESSMENT ORDER WAS PASSED BEYOND THE PERIOD OF LIMITATION. THE L D.DR P RODUCED THE SNAP SHOT OF THE DEMAND AND COLLECTION REGISTER, UPLOADING THE DEMAND EVIDENCING THAT THE ORDER WAS PASSED ON 28/03/2014 AND THE DEMAND WAS UPLOADED ON THE SAME DATE. THEREFORE, LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6 . WE HAVE CONSIDERED ARGUMENTS OF BOTH THE PARTIES. THE LD.CIT(A) DISMISSED THE ASSESSEE S APPEAL ON THAT GROUND THAT THE ASSESSE E HAD NOT FURNISHED ANY EVIDENCE TO ESTABLISH THE FACT THAT THE ASSESSMENT ORDER WAS PASSED BEYOND THE TIME LIMITATION. THERE IS NO MATERIAL PLACED BY THE ASSESSEE TO SUBSTANTIATE THE ALLEGATION THAT THE ASSESSMENT ORDER WAS PA SSED BEYOND THE TIME LIMIT. W E UNDERSTAND FROM THE ASSESSMENT ORDER THAT THE LD.AR HAS NOT COOPERATED DURING THE ASSESSMENT PROCEEDINGS WITH 5 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM THE AO AND DID NOT FURNISH THE INFORMATION CALLED FOR AND ALSO DID NO T PRODUCE THE BOOKS OF ACCOUNTS, I NSPITE OF REPEATED OPP ORTUNITIES AND THE FACT THAT THAT THE ASSESS MENT WOULD BE COMPLETED U/S 144 MADE KNOWN TO H IM . T HE ASSESSEE DID NOT SUBMIT ANY INFORMATION REQU IRED TO COMPLETE THE ASSESSMENT, HENCE THE ASSESSMENT ORDER WAS PASSED U/S 144 TO THE BEST JUDGEMENT OF THE AO ON 28.03.2014 WHICH WAS SERVED ON THE ASSESSEE ON 22.04.2014 . THE LD.AR RELIED ON THE DECISION S OF HONBLE DELHI HIGH COURT IN THE CASE OF ST MICROELECTRONICS PRIVATE LIMITED VS. DCIT IN THE CASE LAW CITED, THE ASSESSEE SOUGHT TO INSPECT THE FILE TO VERIFY THE DATE OF DESPATC H BUT THE AO HAS NOT ALLOWED FOR SUCH INSPECTION. IN THE CASE OF COMMISSIONER OF INCOME TAX VS. BINANI INDUSTRIES LTD., HONBLE SUPREME COURT HAS DISMISSED THE SLP AND TREATED THE ASSESSMENT WAS NOT BARRED BY LIMITATION MERELY BECAUSE IT WAS RECEIVED BY T HE ASSESSEE BEYOND THE PERIOD OF LIMITATION. IN THE CASE OF CIT VS. BJN HOTELS LTD., OF HONBLE HIGH COURT OF KARNATAKA RELIED UPON BY THE ASSESSEE, HONBLE HIGH COURT HAS NOTICED OVER WRITINGS IN THE ORDER SHEET REGARDING THE DATE OF PASSING OF THE ORDER . IN THE CASE OF HONBLE HIGH COURT OF CALCUTTA, IT WAS HELD THAT WHETHER THE ASSESSMENT ORDER WAS PASSED WITHIN THE PERIOD OF LIMITATION OR NOT IS A QUESTION OF FACT BASED ON APPRECIATION OF EVIDENCE PRODUCED BEFORE THE APPELLATE AUTHORITIES. THEREFORE THE CASE LAWS R ELIED UPON BY THE 6 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM AR ARE DISTINGUISHABLE AND NOT APPLICABLE IN ASSESSEE S CASE. IN THE INS TANT CASE, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO ESTABLISH THAT THE ASSESSMENT ORDER WAS PASSED BEYOND THE PERIOD OF LIMITATION. BUT THE LD.D.R PLACED THE SNAP SHOT OF THE DEMAND AND COLLECTION REGISTER UPLOADING THE DEMAND AND PASSING THE ORDER ON 28 . 03 . 2014 . AS PER THE ASSESSMENT PROCEDURE, ON PASSING THE ASSESSMENT ORDER THE ASSESSING OFFICER UPLOAD THE DEMAND AND COMPUTATION OF INCOME / ASSESSMENT ORDER IN THE SYSTEM WHICH SHOWS THE DATE OF UPLOADING AND RELEASE THE ASSESSMENT ORDER TO DISPATCH SECTION AND THE DISPATCH SECTION WOULD DELIVER THE SAME TO THE POST OFFICE OR SERVE THROUGH NOTICE SERVER. THE ASSESSEE IS ENTITLED TO INSPECT THE ASSESSMENT RECORDS AND TAKE EXTRACTS OF THE ASSESSMENT AS PER THE PROCEDURE. FURTHER THE RIGHT TO INFORMATION ACT GIVES RIGHT TO THE ASSESSEE TO COLLECT THE INFORMATION FROM THE AO REGARDING THE DATE OF PASSING THE ASSESSMENT ORDER AND THE DATE OF DISPATCH OF THE ASSESSMENT ORDER AND THE AO IS BOUND TO FURNISH THE INFOR MATION. IN THE INSTANT CASE, THE LD.AR ACCEPTED THAT THE ASSESSEE HAS NEITHER REQUESTED FOR INSPECTION OF RECORD NOR FILED REQUISITE INFORMATION UNDER RIGHT TO INFORMATION ACT. IT IS OBLIGATION ON THE PART OF THE ASSESSEE TO EXERCISE HIS RIGHT. THE LAW CANNOT HELP THE PERSON WHO IS SLEEPING OVER HIS RIGHTS. 7 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM 6.1. THE FOLLOWING DECISIONS OF HONBLE HIGH COURTS SUPPORTS THE VIEW THAT THE AO REQUIRE TO PASS THE ORDER WITH IN THE PERIOD OF LIMITATATION AND MERELY BECAUSE THE ORDER WAS SERVED ON THE ASSESSE BEYOND THE PERIOD OF LIMITATION THE ORDER CANNOT BE HELD TO BE INVALID. (I) 46 ITR 735 (AP) (II) 151 ITR 216 (GAU) (III) 25 ITR 79(MAD) THE GROUND RAISED BY THE ASSESSEE WITH REGARD TO TIME LIMIT FOR COMPLETION OF ASSESSMENT U/S 153 IS ON MERE SUSPICION WITHOUT ANY BASI S BUT NOT ON ANY FACTUAL INFORMATION. HONBLE SUPREME COURT IN THE CASE OF CIT VS. BINANI INDUSTRIES LTD. HELD THAT UNLESS THERE IS AN INDICATION THAT THE ASSESSING OFFICER REVISED HIS ORDER, THE ASSESSMENT ORDER COULD NOT BE TREATED AS BARRED BY LIMITATIO N MERELY ON THE GROUND THAT THE SAME WAS RECEIVED BY THE ASSESSEE BEYOND THE PERIOD LIMITATION [73 TAXMAN.COM 191 (SC)] . HONBLE HIGH COURT OF ANDHRA PRADESH IN 46 ITR 735 HELD THAT THE ASSESSMENT ORDER PASSED WITHIN THE LIMITATION PERIOD AND WAS SERVED ON THE ASSESSE E SUBSEQUENTLY , WOULD NOT MAKE THE ASSESSMENT ORDER TIME BARRED. SIMILARLY HONBLE MADRAS HIGH COURT [ 25 ITR 79 ] HELD THAT THE ITO HAD TO COMPLETE THE ASSESSMENT WITHIN THE TIME LIMIT MERELY BECAUSE THE ASSESSMENT ORDER WAS NOT SERVED WITHIN THE PERIOD OF LIMITATION DOES NOT 8 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM RENDER THE ASSESSMENT AS INVALID. HONBLE GAUHATI HIGH COURT IN THE CASE OF 70 ITR 305 TAKEN THE SIMILAR VIEW. LD. DR PLACED SNAP SHOT OF UPLOADED DEMAND IN THE SYSTEM WHICH WAS UPLOADED ON 28.03.2014. AS PER T HE SNAP SHOT OF DEMAND THE ORDER WAS PASSED AND THE DEMAND WAS UPLOADED ON 28.03.2014. HONBLE JURISDICTIONAL HIGH COURT IN [1962] 46 ITR 735 (AP)KODIDASU APPALASWAMY AND SURYANARAYANA V COMMISSIONER OF INCOME - TAX HELD AS UNDER: UNDER SECTION 34, CLAUSE (3), THE ORDER OF ASSESSMENT COULD BE PASSED WITHIN THE PERIOD MENTIONED THEREIN AND, IN THIS CASE, IT IS NOT DISPUTED THAT THE ORDER WAS IN FACT PASSED BY THE INCOME - TAX OFFICER WITHIN THE PERIOD PRESCRIBED. IN OUR OPINION THE DATE ON WHICH THE NOTICE OF DEMAND AND THE COPY OF THE ORDER OF ASSESSMENT WERE SERVED ON THE ASSESSEE IS NOT AT ALL MATERIAL AS THE LANGUAGE OF SECTION 34, CLAUSE (3), IS VERY CLEAR AND UNAMBIGUOUS. 6.2. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE TO ESTABLISH THAT THE ASSESSMENT IS PASSED BEYOND TIME LIMITATION PERIOD WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE ORDER PASSED BY THE AO IS BEYOND LIMITATION AND FOLLOWING THE DECISION OF THE HOBLE JURISDICTIONAL HIGH COURT CITED (SUPRA) WE HOLD THAT ASSESSMENT ORDER WAS PASSED WITHIN THE LIMITATION AND THE ASSESSEES APPE A L ON THIS GROUND IS DISMISSED. 7 . GROUND NO.2 AND 3 ARE NOT PRESSED BY THE ASSESSEE , HENCE, THE GROUND NO.2 AND 3 ARE DI SMISSED AS NOT PRESSED. 9 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM 8 . GROUND NO.4 IS GENERAL IN NATURE WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 9 . GROUND NO.2 IS WITH REGARD TO ESTIMATION OF INCOME. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PUMP SETS AND CIVIL CONTRACT S . THE ASSESSEE IS PROPRIETOR OF LASYA CONSTRUCTIONS HAVING TURNOVER OF RS.5,82,75,428/ - . DURING THE ASSESSMENT PROCEEDINGS, THE A O CALLED FOR VARIOUS DETAILS BUT THE ASSESSEE DID NOT SUBMIT THE INFORMATION. INSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE AS SESSEE FOR PRODUCTION OF EVIDENCES AND FURNISHING THE DETAILS, THE BOOKS OF ACCOUNTS, THE ASSESSEE NEITHER FURNISHED THE DETAILS CALLED FOR NOR PRODUCE D THE BOOKS O F ACCOUNTS. IN THE ABSENCE OF INFORMATION FILED BY THE ASSESSEE, THE ASSESSING OFFICER RESO RTED TO BEST JUDGEMEN T ASSESSMENT U/S 144 OF I.T.AC T AND ESTIMATED THE INCOME @12% OF GROSS CONTRACT RECEIPTS OF RS.5,82,75,428/ - AND DID NOT ALLOW DEPRECIATION. AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT (A) AN D THE LD.CIT FOLLOWED THE DECISION OF HONBLE AP HIGH COURT IN THE CASE OF SRI VENKATESWARA LORRY SERVICES AND UPHELD THE ESTIMATION OF INCOME @12% OF THE GROSS RECEIPTS AND ALLOWED THE DEPRECIATION. DURING THE APPEAL HEARING, THOUGHT THE LD.AR ARGUED THA T THE 10 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM RECORDS OF THE ASSESSEE SHOWS THE PROFIT @3.25% TO 7.60% IN THE INSTANT CASE IN THE ABSENCE OF PRODUCTION OF BOOKS OF ACCOUNTS, BILLS, VOUCHERS DURING THE ASSESSMENT PROCEEDINGS, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE. THE ASSESSEE H AS NOT BROUGHT ANY EVIDENCE TO SHOW THAT THE PROFIT IS LESS THAN 12% ON THE SAME SET OF FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE. SINCE THE LD.CIT (A) HAS CONSIDERED ALL THE FACTS AND CIRCUMSTANCES, AND NO FRESH MATERIA L IS PLACED ON RECORD BEFORE US , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT (A) AND THE SAME IS UPHELD. 1 0 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND NOV 2017 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 22 . 11 .2017 L. RAMA, SPS 11 ITA NO . 5 0 /VIZ/201 6 SRI CHUNDI VENKATA RAMBABU , VISAKHAPATNAM / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - SRI CHUNDIVENKATARAMBABU, PROP. LASYA CONSTRUCTIONS, D.NO.33 - 14 - 312, ALLIPURAM, VISAKHAPATNAM - 530 004 2 . / THE RESPONDENT THEADDL.CIT, RANGE - 1, VISAKHAPATNAM 3. THE COMMISSIONER OF INCOME TAX - 1, VISAKHAPATNAM 4 . THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM