E.Naveen Kumar Goud, Vikarabad, Hyderabad V. ITO, Ward-1, Vikarabad, Vikarabad

ITA 540/HYD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2382 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-02-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SURESH BABU
• Assessee Lawyers: S RAMA RAO
• Keywords: Reasonable cause
• Section: 143(3); 69

Judgement Text

ITA NO 540 OF 2016 E NAVEEN KUMAR GOUD VIKARABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.540/HYD/2016 (ASSESSMENT YEAR: 2011-12) MR.E.NAVEEN KUMAR GOUD VIKARABAD, R.R. DISTT. PAN: AASPE 7507 L VS INCOME TAX OFFICER WARD-1, VIKARABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO FOR REVENUE : SHRI B. SURESH BABU, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2011-12 AGAIN ST THE ORDER OF THE LEARNED CIT (A)-9, HYDERABAD, DATE D 27 TH JANUARY, 2016. THE ASSESSEE HAD ORIGINALLY FILED SIX GROUNDS OF APPEAL ALONG WITH FORM NO.36. SUBSEQUENTLY, THE ASSESSEE F ILED THE REVISED GROUNDS OF APPEAL WHICH ARE AS UNDER: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT DECIDING THE APPEAL ON MERITS. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE CONSIDERED THAT THE DATE OF HEARING: 27.02 . 201 8 DATE OF PRONOUNCEMENT: 28.03.2018 ITA NO 540 OF 2016 E NAVEEN KUMAR GOUD VIKARABAD. PAGE 2 OF 4 ASSESSING OFFICER IS NOT JUSTIFIED IN ESTIMATING INCOME AT 5% OF THE COST OF PURCHASE OF LIQUOR. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE INVESTMENT OF RS.16,68,SOO/- AS UNEXPLAINED AND FURTHER ERRED IN TREATING THE SAME AS INCOME OF THE APPELLANT. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CREDITS IN BANK ACCOUNT WITH INDIAN BANK OF RS.7,LL,048/- AS UNEXPLAINED AND FURTHER ERRED IN TREATING THE SAME AS INCOME OF THE APPELLANT. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CREDITS INTO BANK ACCOUNT WITH ICICI BANK OF RS.3,24,OOO/- AS UNEXPLAINED AND FURTHER ERRED IN TREATING THE SAME AS INCOME OF THE APPELLANT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, CARRYING ON THE BUSINESS OF RUNNING A W INE SHOP, FILED HIS RETURN OF INCOME FOR THE A.Y 2011-12, DECLARING INCOME OF RS.5,18,470. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE ASSESSEE WAS ASKED TO FURNISH THE BILL S/VOUCHERS FOR SALES/PURCHASES AND THE EXPENSES DEBITED TO THE P&L A/C ALONG WITH THE BOOKS OF ACCOUNT MAINTAINED. THE ASSESSEE REPLIED THAT IT IS NOT POSSIBLE TO MAINTAIN SALE BILLS/VOUCHERS IN THIS LINE OF ACTIVITY SINCE ALL THE CUSTOMERS COME DURING 6.00 P M TO 10.30 PM IN LARGE NUMBERS AND WILL PRESSURIZE TO DELIVER THE ITEMS DEMANDED AND DO NOT WAIT FOR ISSUANCE OF SALE INVOI CES. TAKING THE SAME INTO CONSIDERATION, THE AO OBSERVED THAT T HE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ARE NOT RELIABLE AND THUS, HE ITA NO 540 OF 2016 E NAVEEN KUMAR GOUD VIKARABAD. PAGE 3 OF 4 ESTIMATED THE ASSESSEES INCOME AT 5% OF THE GOODS PUT TO SALE AND ACCORDINGLY MADE THE ADDITION OF RS.9,78,792. F URTHER, THE AO ALSO OBSERVED THAT THE ASSESSEE DEBITED AN AMOUN T OF RS.41,70,000 AS LICENSE FEE AND IT WAS EXPLAINED TH AT THE SAME IS PAID IN INSTALLMENTS AND THE FIRST INSTALLMENT IS R S.18,55,000. THE AO OBSERVED THAT THE ASSESSEE HAS ALSO PAID RS.3.00 LAKHS INITIALLY FOR LIFTING OF STOCK AND THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCES FOR THE SUM OF RS.21,55,000. TH E ASSESSEE COULD NOT FURNISH ANY EVIDENCE TO THE TUNE OF RS.16 ,68,500. AS FAR AS RS.4,86,500 IS CONCERNED, HE EXPLAINED THAT A SU M OF RS.4,86,500 IS FROM AGRICULTURAL INCOME AND HAS PRO DUCED THE PATTADAR PASS BOOK OF HIS FATHER TO THIS EXTENT. TH E AO THEREFORE, ACCEPTED THE SOURCE TO THE TUNE OF RS.4,86,500 AND ADDED A SUM OF RS.16,68,500 U/S 69 OF THE ACT AS UNEXPLAINED IN VESTMENT. THE AO ALSO FOUND THAT THERE WERE CREDITS IN INDIAN BAN K TO THE TUNE OF RS.7,11,048 AND IN ICICI BANK TO THE TUNE OF RS. 3,24,000 FOR WHICH THE ASSESSEE COULD NOT OFFER ANY EXPLANATION. THEREFORE, HE BROUGHT IT TO TAX. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A) BUT FAILED TO EITHER APPEAR BEFORE THE CIT (A) OR PRODUCE ANY EVIDENCE. THUS, THE CIT (A) CONFIRMED THE ADDIT IONS MADE BY THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FOR NOT APPEARING BEFORE THE CIT (A) AND PRAYED FOR REMITTANCE OF THE APPEAL TO THE FILE OF THE CIT (A) TO EXPLAIN THE SOURCES FOR INVE STMENT AS WELL AS DEPOSITS INTO THE BANK A/CS. ITA NO 540 OF 2016 E NAVEEN KUMAR GOUD VIKARABAD. PAGE 4 OF 4 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD AND ALSO HAVING REGARD TO THE ORDER OF TH E CIT (A), WE FIND THAT THE CIT (A) HAS NOT DISCUSSED THE APPEAL ON MERITS BUT HAS DISMISSED THE APPEAL MAINLY FOR NON-APPEARANCE OF THE ASSESSEE, WHICH SHE IS NOT PERMITTED UNDER THE LAW TO DO. THEREFORE, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE CIT (A) FOR DE NOVO CONSIDERATION ON MERITS AND THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE RELEVANT MA TERIAL BEFORE THE CIT (A) AND COOPERATE WITH THE CIT (A) FOR EARLY DI SPOSAL OF THE APPEAL. 6. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2018. SD/- SD/- (B.RAMAKOTAIAH) ACCOUNTA NT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 28 TH MARCH 2018. VINODAN/SPS COPY TO: 1 SHRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA'S ELEGANCE, 3-6- 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 ITO WARD - 1, VIKARRABAD, RANGA REDDY DISTT. 3 CIT (A)-9, HYDERABAD 4 PR. CIT 2, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER