Pendela Kotilingam Brothers , Nalgonda V. Income Tax Officer, Ward-1, Nalgonda

ITA 612/Hyd/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0710 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 24-09-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 25-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Assessment record; Set aside
• Section: 143(3); 201; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 612 /HYD/20 19 ASSESSMENT YEAR: 20 14 - 15 M/S. PENDELA KOTILINGAM BROTHERS, MIRYALAGUDA ASSESSEE ROAD, HUZURNAGAR - 508204. PAN: AADFP 2078 A VS. INCOME TAX OFFICER, WARD - 1, NALGONDA. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K.A. SAI PRASAD REVENUE BY: SRI Y.V.S.T. SAI, CIT - DR DATE OF HEARING: 01/07/2019 DATE OF PRONOUNCEMENT: 19 /07/2019 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. PR. CIT - 3, HYDERABAD VIDE F. NO. PR.CIT - 3/HYD/263/2018 - 19, DATED 11/03/2019 PASSED U/S. 263 OF THE ACT FOR THE ASST. YEAR 2014 - 15. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FIVE GROUNDS HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD. PR. CIT ERRONEOUSLY INVOKED HIS POWER U/S. 263 OF THE ACT AND SET ASIDE THE ORDER OF THE LD. AO AND FURTHER DIRECTED HIM TO RE - DO THE ASSESSMENT AFRESH. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF RUNNING PETROL BUNK E - FILED HIS RETURN OF INCOME FOR THE AY 2014 - 15 ON 4/11/2014 DECLARING TOTAL INCOME OF RS. 1,36,110/ - . SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED ON 30/6/2016 BY MAKING ADDI TION OF RS. 98,550/ - BEING DISALLOWANCE OF CERTAIN EXPENDITURES. 4. THEREAFTER, ON EXAMINING THE ASSESSMENT RECORDS, THE LD. PR. CIT OPINED THAT THE ASSESSMENT MADE BY THE LD. AO DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 2,34,660/ - DOES NOT AP PEARS TO BE APPROPRIATE BECAUSE HE WAS OF THE VIEW THAT THE LD. AO HAD NOT EXAMINED THE CASE PROPERLY AS THE ASSESSED INCOME WAS TOO LOW COMPARED TO THE TURNOVER OF THE ASSESSEE. THEREFORE, THE LD. PR. CIT SET ASIDE THE ORDER OF THE LD. AO AND DIRECTED HI M TO RE - DO THE ASSESSMENT IN ACCORDANCE WITH LAW AND MERITS AFTER EXAMINING THE CASE IN DETAIL. 5. THE LD. AR SUBMITTED BEFORE US THAT THE ASSESSEE HAD DISCLOSED MORE PROFIT DURING THE RELEVANT ASSESSMENT YEAR AS HIS GP WAS 2.18% WHEREAS THE GP FOR AY 201 1 - 12, 2012 - 13 AND 2013 - 14 WAS 1.55%, 1.69% AND 2.29% RESPECTIVELY . THE LD. AR FURTHER SUBMITTED THAT IN THE SCRUTINY ASSESSMENT THE LD. AO HAD ALREADY MADE AN ADDITION OF RS. 98,550/ - WHICH WAS AGREED BY THE ASSESSEE. THE LD. AR FURTHER 3 POINTED OUT THAT T HE AVERAGE COMMISSION RECEIVED BY THE ASSESSEE FROM THE PETROLEUM COMPANIES TOWARDS THE SALE OF PETROLEUM PRODUCTS IS ONLY 5%. IT WAS THEREFORE PLEADED THAT REASSESSING THE INCOME OF THE ASSESSEE ONCE AGAIN IS NOT WARRANTED BECAUSE THE LD. AO AFTER THOROU GH EXAMINATION HAD COMPLETED THE ASSESSMENT OF THE ASSESSEE. THE LD. DR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDER OF THE LD. PR. CIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. THE FACT THAT THE ASSESSEE I S RECEIVING COMMISSION OF 5% FROM THE PETROLEUM COMPANIES TOWARDS THE SALE OF PETROLEUM PRODUCTS IS NOT DISPUTED BY THE LD. REVENUE AUTHORITIES. IN THIS SITUATION, ASSESSEE HAS ALREADY DECLARED GP OF 2.18% DURING THE RELEVANT ASSET. YEAR WHICH IS ALSO IN PARITY WITH THE PROFIT DECLARED DURING THE EARLIER ASSESSMENT YEARS AND NOT DISTURBED BY THE REVENUE . IN THE CASE OF THE ASSESSEE T HE LD. AO AFTER EXAMINING THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAS ALSO MADE AN ADDITION OF RS. 98,550/ - BY DISALLOWING CERTAIN EXPENDITURES. IN THIS SITUATION WE DO NOT FIND IT APPROPRIATE ON THE PART OF LD. PR. CIT TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT AND SET ASIDE THE ORDER OF THE LD. AO WITH FURTHER DIRECTI ONS TO RE - DO THE ASSESSMENT AFTER EXAMINING THE CASE OF THE ASSESSEE. THEREFORE, WE HEREBY QUASH THE ORDER OF THE LD. PR. CIT PASSED U/S. 263 OF THE ACT. 4 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 19 TH JULY, 2019. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 19 TH JULY , 2019 OKK COPY TO: - 1) M/S. PENDELA KOTILINGAM BROTHERS, C/O. CH. PARTHASARATHY & CO, 1 - 1 - 298/2/B/3, 1 ST FLOOR, ASHOK NAGAR, HYDERABAD - 500020. 2) INCOME TAX OFFICER, WARD - 1, AAYAKAR BHAVAN, NALGONDA. 3) ADD. CIT, RANGE - 7, HYDERABAD 4) THE PR. CIT - 3 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE