Blue Fox Bar & Restaurant, Hyd, Hyderabad V. ACIT, Circle-4(1), Hyderabad, Hyderabad

ITA 556/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6311 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Reopening of assessment; Unexplained investment; Business income
• Section: 143(3); 147; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 556/HYD/2016 ASSESSMENT YEAR: 2005-06 BLUE FOX BAR & RESTAURANT, HYDERABAD. PAN AACFB 3249G VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 4(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SHRI K.J. RAO DATE OF HEARING 17-08-2016 DATE OF PRONOUNCEMENT 26-08-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 1, HYDE RABAD FOR AY 2005-06. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME FOR THE AY. 2005-06 ON 30/10/2005 DECLARING TOTAL INCOME OF RS. 35,85,148/-, WHICH WAS PROCESSED U/S 143(1) ON 29/06/2009. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY. ASSESSMENT U/S 143(3) WAS COMPLETED ON 24/12/2007 A ND A DEMAND OF RS. 2,28,126/- WAS RAISED. 2.1 NOTICE U/S 148 WAS ISSUED ON 23/03/2010 AND SER VED ON THE ASSESSEE FOR THE REASON THAT THE TURNOVER AS PER TH E STATEMENT IN FORM AR-II SUBMITTED TO THE COMMERCIAL TAX WAS RS. 2,83,87,439/- AS 2 ITA NO. 556/H/16 M/S BLUE FOX BAR & RESTAURANT AGAINST RS. 2,80,96,627/- CREDITED TO THE P&L A/C W HICH RESULTED IN ESCAPEMENT OF INCOME. 2.2 IN REPLY TO THE NOTICE U/S 148, THE AR OF THE A SSESSEE STATED THAT THE RETURN OF INCOME ORIGINALLY FILED ON 30/10 /2015 MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 1 48 OF THE ACT. 2.3 IN RESPONSE TO THE NOTICES ISSUED U/S 143(2) & 142(1), THE AR OF THE ASSESSEE FILED THE REQUISITE DETAILS AND PRODUC ED THE BOOKS OF ACCOUNT AND THE BILLS/VOUCHERS MAINTAINED BY ASSESS EE. AFTER EXAMINING THE SAME, THE AO OBSERVED THAT AS PER THE SALES TAX RETURNS FILED BY THE ASSESSEE IN FORM AR-II, THE TU RNOVER MADE BY THE ASSESSEE DURING THE FY 2004-05 IS RS. 2,83,87,439/- . HOWEVER, THE ASSESSEE HAD SHOWN RS. 2,80,96,627/- AS THE TURNOVE R IN THE P&L A/C FURNISHED BY THE ASSESSEE. HE THEREFORE, OPINED THA T THE ASSESSEE HAS SHOWN LESS TURNOVER TO THE EXTENT OF RS. 2,90,8 12/- IN P&L A/C AND, THEREFORE, THE SAME IS LIABLE TO BE ADDED TO T HE INCOME OF THE ASSESSEE. ACCORDINGLY, HE ADDED THE SAID AMOUNT AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 3. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF T HE AO. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING 8 GROUNDS OF APPEAL. 5. GROUND NOS. 1 & 8 ARE GENERAL IN NATURE. GROUND NOS. 2 TO 4 ARE AGAINST REOPENING OF ASSESSMENT U/S 147 OF THE ACT. THE LD. AR HAS NOT PRESSED THIS ISSUE AT THE TIME OF HEARING, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. 6. GROUND NOS. 5 TO 7 ARE RELATING TO ADDITION OF R S. 2,90,812/- TOWARDS UNEXPLAINED INVESTMENT IN THE FORM OF SALES U/S 69 OF THE ACT. 3 ITA NO. 556/H/16 M/S BLUE FOX BAR & RESTAURANT 7. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE FIRM HAS ALREADY SUBMITTED THE BOOKS OF AC COUNT AND THE BILLS AND VOUCHERS FOR VERIFICATION AT THE TIME OF ORIGINAL ASSESSMENT AND THE ORIGINAL ASSESSMENT ORDER HAS BEEN PASSED O NLY AFTER SATISFACTION WITH DETAILS FURNISHED BY THE ASSESSEE FIRM. HE, THEREFORE, CONTENDED THAT THE AO CANNOT TAKE A DIFFERENT VIEW, ONCE THE ASSESSMENT ORDER HAS BEEN PASSED U/S 143(3) OF THE ACT. LD. AR SUBMITTED THAT THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE HAS ALREADY SUBMITTED BOOKS OF ACCOUNT, BI LLS AND VOUCHERS FOR VERIFICATION AT THE TIME OF ORIGINAL ASSESSMENT , INSTEAD UPHOLDING THE ACTION OF THE AO, IS NOT PROPER BY THE CIT(A). THE LD. AR FILED A RECONCILIATION STATEMENT IN SUPPORT OF ASSESSEES C ASE WHICH IS AS UNDER: A. SALES AS PER BOOKS (FINANCIALS STATEMENTS. S.NO. PARTICULARS AMOUNT 1 FOOD, ICE CREAM, COOL DRINKS 1,59,83,348 2 SALE OF LIQUOR 1,08,34,611 TOTAL SALES 2,68,17,959 3 ADD: SALES TAX COLLECTED 12,78,668 TURNOVER AS PER BOOKS 2,80,96,627 B. SALES RECONCILIATION AS PER AR II (SALES TAX ORDER) AND AS PER BOOKS S.NO. PARTICULARS AMOUNT 1 FOOD, ICE CREAM, COOL DRINKS 1,59,83,348 2 SALE OF LIQUOR 1,08,34,611 TOTAL SALES AS PER BOOKS (EXCLUDING APGST) 2,68,17,959 3 ADD: SALES TAX COLLECTED 12,78,668 TOTAL SALES AS PER BOOKS (INCLUDING APGST) 2,80,96,627 4. ADD: PURCHASE CONSIDERED AS TURNOVER AS PER AR-II (SALES TAX ORDER) FOR THE PURPOSE OF APGST LIVE BIRD CHICKEN 11,48,924 4 ITA NO. 556/H/16 M/S BLUE FOX BAR & RESTAURANT MILK SECTION 3,34,386 BUTTER 15,680 PROVISIONS 49,365 FOOD RECOVERY 21,125 SUB-TOTAL 15,69,480 5. LESS SALES TAX COLLECTED 12,78,668 2,90,812 TOTAL TURNOVER AS PER AR-II (SALES TAX ORDER) FOR THE PURPOSE OF PAYING APGST 2,83,87,439 8. LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER S OF REVENUE AUTHORITIES. 9. CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSELS AND PERUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE ORDERS OF REVENUE AUTHORITIES. ASSESSING OFFICER HAS COMPARED THE TUR NOVER REPORTED IN P&L ACCOUNT AND THE TURNOVER DECLARED IN FORM NO. A R-II OF SALES TAX DEPARTMENT AND MADE THE ADDITION. THE AR HAS SUBMIT TED A RECONCILIATION OF SALES REPORTED IN P&L ACCOUNT AND SALES TAX FORM AR-II. IT IS CLEAR FROM THE RECONCILIATION STATEMEN T THAT THE DIFFERENCE IN TURNOVER IS NOTHING BUT THE PURCHASES WHICH ARE CONSIDERED AS TURNOVER AS PER THE PROVISIONS LAID DOWN IN APGST. THE RELEVANT PURCHASES ARE ALREADY RECORDED IN P&L ACCOUNT. HENC E, THE TURNOVER REPORTED BY THE ASSESSEE IN P&L ACCOUNT IS CORRECT. HENCE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE U /S 69 OF THE ACT. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 26 TH AUGUST, 2016. 5 ITA NO. 556/H/16 M/S BLUE FOX BAR & RESTAURANT KV COPY TO:- 1) M/S BLUE FOX BAR & RESTAURANT, C/O P. MURALI & CO., CAS., 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500 082 2)ACIT, CIRCLE 4(1), HYDERABAD. 3) CIT(A) - 1, HYDERABAD 4)PR. CIT - 1 , HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.