Shiva Shankthi Textile Industries Private Limited, Hyderabad V. Income Tax Officer, Ward-3(1), Hyderabad

ITA 566/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3391 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-04-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 27-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 566/HYD/2018 ASSESSMENT YEAR: 2014-15 M/S.SHIVA SHAKTHI TEXTILE INDUSTRIES PRIVATE LIMITED, HYDERABAD [PAN: AACCS8344N] VS INCOME TAX OFFICER, WARD-3(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V.RAGHURAM, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 26-04-2021 DATE OF PRONOUNCEMENT : 11-06-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2014-15 ARISES FROM TH E CIT(A)-3, HYDERABADS ORDER DATED 19-07-2017 PASSED IN CASE NO.0448/CIT(A)-3, HYD/2016-17, IN PROCEEDINGS U/S.1 43(3) R.W.S.144 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE A CT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. COMING TO THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW AN D ON FACTS IN ESTIMATING 5% AS INCOME ELEMENT ON GROSS SALE S OF RS.22,91,79,791/-, WE NOTICE THAT THE CIT(A)S DETAILED ITA NO. 566/HYD/2018 :- 2 -: DISCUSSION AFFIRMING THE ASSESSING OFFICERS ACTION R EADS AS UNDER: 5. GROUNDS OF APPEAL RELATES TO ESTIMATION OF INCO ME @ 5% ON GROSS SALES OF RS.22,91,79,791/-. THE STATEMENT OF FACTS, GROUNDS OF APPEAL AND ASSESSMENT ORDER HAVE BEEN PERUSED. AS SEEN FR OM THE ASSESSMENT ORDER, THE APPELLANT WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF TEXTILES / GARMENTS AND THE GROSS RECEIPTS AS PER P&L A/C WAS RS.22,91,79,791/-. IN ORDER TO VERIFY T HE CORRECTNESS OF INCOME RETURNED, THE ASSESSING OFFICER ISSUED NOTIC ES TO THE APPELLANT. THE APPELLANT NEITHER APPEARED NOR PRODU CED BOOKS OF ACCOUNT, BILLS AND VOUCHERS AND FAILED TO UTILISE T HE OPPORTUNITIES GIVEN BY THE ASSESSING OFFICER. IN THE ABSENCE OF B OOKS OF ACCOUNT BILLS AND VOUCHERS, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 143(3) R.W.S. 144 BY ESTIMATING THE INCOME FRO M THE BUSINESS OF THE APPELLANT AT 5% ON GROSS SALES OF RS.22,91,79,7 91/- WHICH WORKS OUT TO RS. 1,14,58,989/-. IN THE INSTANT EASEL THE APPELLANT NEITHER APPEARED NOR SUBMITTED ANY DOCUMENTARY EVIDENCE BEF ORE THE ASSESSING OFFICER OR IN APPEAL. 6.3 CONSIDERING THE SUBMISSIONS FILED BY THE APPELL ANT AT THE TIME OF FILING OF APPEAL, THERE IS NO REASON TO INTERFERE W ITH THE ORDER OF THE ASSESSING OFFICER AND THE SAME IS UPHELD AS THE EST IMATION OF INCOME @ 5% ON TOTAL SALES OF RS.22,91,79,971/- IS FAIR AN D REASONABLE. HENCE, GROUNDS OF APPEAL MADE BY THE APPELLANT ARE DISMISSED. 3. BOTH THE LEARNED REPRESENTATIVES REITERATED THEIR RESPECTIVE STANDS AGAINST AND IN SUPPORT OF THE IMPUGNE D 5% INCOME ESTIMATION ON ASSESSEES GROSS TURNOVER IN TEXTI LE MANUFACTURING BUSINESS. 4. LEARNED DEPARTMENTAL REPRESENTATIVES VEHEMENT CONTENTION PARTICULARLY IS THAT BOTH THE LOWER AUTHORITIES HAVE ALREADY ADOPTED A VERY LENIENT APPROACH IN ASSESSING ITS GROSS TURNOVER AT SUCH A MINIMAL PROFIT RATE. WE FIND NO MERIT IN THE REVENUES INSTANT ARGUMENT PER SE SINCE THE IMPUGNED ESTIMATION HAS NEITHER BEEN GUIDED BY THE PROFIT RATES DECLARED AND ACCEPTED AT THE ASSESSEES BEHEST ITA NO. 566/HYD/2018 :- 3 -: IN PRECEDING NOR IN SUCCEEDING ASSESSMENT YEARS. THE RE IS ALSO NO COMPARABLE CASE QUOTED IN THE VERY LINE OF BUSINES S AS WELL. 5. LEARNED COUNSEL HAS INVITED OUR ATTENTION TO THE ASSESSEES DETAILED PAPER BOOK RUNNING INTO 83 PAGES CONTAINING AUDITORS REPORT ETC., FOR AYS.2010-11 TO THE IMPUGNED AY.2014-15 BEFORE US. 6. FACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE TO DIRECT THE ASSESSING OFFICER TO ADOPT AVERAGE OF THE AS SESSEES PROFITS DECLARED IN THE AYS.2010-11 TO 2013-14 IN THE IMPUGNED AY.2014-15. IT IS MADE CLEAR THAT THE INSTANT DIRECTION SHALL NOT BE TREATED AS A PRECEDENT IN ANY OT HER CASE. NECESSARY COMPUTATION TO FOLLOW AS PER LAW. 7. THIS ASSESSEES APPEAL IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JUNE, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 11-06-2021 TNMM ITA NO. 566/HYD/2018 :- 4 -: COPY TO : 1.M/S.SHIVA SHAKTHI TEXTILE INDUSTRIES PRIVATE LIMI TED, C/O. A.V.RAGHU RAM & P.VINOD, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-3(1), HYDERABAD. 3.CIT(APPEALS)-3, HYDERABAD. 4.PR.CIT-3, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.