Ghanta Sambasiva Rao, Tenali V. THE Pr.CIT, Guntur

ITA 58/VIZ/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8839 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Section: 40A(3); 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 58 / VIZ /201 6 (ASST. YEAR : 20 11 - 12 ) GHANTA SAMBASIVA RAO, D.NO. 11 - 10 - 13/A, DONKA ROAD, CHENCHUPET, TENALI, GUNTUR DISTRICT. V S . P CIT, GUNTUR. PAN NO. ABRPG 3477 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI D.L. NARASIMHA RAO ADV. DEPARTMENT BY : SHRI K.C. DAS SR. DR DATE OF HEARING : 25 / 0 7 /201 7 . DATE OF PRONOUNCEMENT : 26 / 0 7 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF PRINCIPAL COMMISSIONER OF INCOME TAX, GUNTUR , DATED 21 /0 1 /201 6 FOR THE ASSESSMENT YEAR 20 11 - 12 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL DERIVING INCOME FROM EXECUTING CIVIL CONTRACT WORKS. THE ASSESSEE HAS FILED A RETURN OF INCOME BY DECLARING TOTAL INCOME OF 1 0 ,42,730/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') . SUBSEQUENTLY, AFTER FOLLOWING DUE PROCEDURE, ASSESSMENT WAS 2 ITA NO. 58/VIZ/2016 ( GHANTA SAMBASIVA RAO ) COMPL E TED UNDER SECTION 143(3) BY MAKING ADDITION OF 3,50,000/ - . THEREAFTER, L EARNED PR.CIT BY EXERCISING HIS POWERS CONFERRED UNDER SECTION 263 , IS OF THE OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) DATED 08/01/2014 WAS ERRONEOUS AS MUCH AS PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE REASON T H A T ASSESSEE HAS MADE PAYMENT S FOR PURCHASE OF CEMENT IN CASH EXCEEDING 20,000/ - TO THE TUNE OF 6,20,000/ - , WHICH ATTRACTS THE PROVISION S OF SECTION 40A(3) OF THE ACT AND HENCE, ISSUED SHOW - CAUSE NOTICE DATED 21/10/2015 AND CALLED EXPLANATION . IN RESPONSE TO THE SHOW - CAUSE NOTICE, THE ASSESSEE FILED A DETAILED WRITTEN SUBMISSION ON 13/11/2015 , WHEREIN IT IS MA INLY SUBMITTED THAT ONCE INCOME IS ESTIMATED , NO DISALLOWANCE CAN BE MADE UNDER THE ACT. THE LEARNED PR.CIT HAS EXAMINED THE REPLY GIVEN BY THE ASSESSEE AND OBSERVED THAT THE ASSESSING OFFICER FAILED TO EXAMINE THE APPLICATION OF SECTION 40A(3) AND DIRECTED THE ASSESSING OFFICER TO EXAMINE THE ISSUE IN RESPECT OF VIOLATION OF SECTION 40A(3) AND DECIDE AS PER LAW. 3 . ON APPEAL BEFORE US, L EARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE AND THEREFORE NO SEPARATE ADDITION CAN BE MADE UNDER SECTION 40A(3) OF THE ACT AND SUBMITTED THAT THE ORDER PASSED BY THE LEARNED PR.CIT UNDER SECTION 263 IS BAD IN LAW. 4 . ON THE OTHER HAND, L EARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) DATED 08/01/2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF 3 ITA NO. 58/VIZ/2016 ( GHANTA SAMBASIVA RAO ) THE REVENUE FOR THE REASON THAT THE ORDER IS PASSED WITHOUT APPLICATION OF MIND. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERI AL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW . 6 . IN THE ASSESSMENT ORDER , THOUGH THE ASSESSING OFFICER HAS REFERRED TO SECTION 40A(3) VIOLATION, HOWEVER, WITHOUT EXAMI NI NG THE ISSUE , ESTIMATED THE INCOME OF THE ASSESSEE. WE FIND THAT WHEN THE ASSESSEE HAS MADE THE PAYMENTS BY VIOLATING SECTION 40A(3) OF THE ACT, THE ASSESSING OFFICER OUGHT TO HAVE BEEN EXAMINED AND DECIDE THE ISSUE . THEREFORE, WE ARE OF THE OPINION THAT THE ORDER PAS SED BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE APPLICATION OF THE PROVISIONS OF SECTION 40A(3) IS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. THUS, WE FIND THAT LEARNED PR.CIT CORRECTLY EXERCISED HIS JURISDICTION UNDER SECTION 263 OF THE ACT . THEREFORE, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 26 TH DAY OF JULY , 201 7 . SD/ - SD/ - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH JU LY , 201 7 . VR/ - 4 ITA NO. 58/VIZ/2016 ( GHANTA SAMBASIVA RAO ) COPY TO: 1. THE ASSESSEE - GHANTA SAMBASIVA RAO, D.NO.11 - 10 - 13/A, DONKA ROAD, CHENCHUPET, TENALI, GUNTUR DISTRICT. 2. THE REVENUE PCIT, GUNTUR. 3. T HE D.R . , VISAKHAPATNAM. 4. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.