Sanjay Kumar Chavan, Hyderabad, Hyderabad V. ITO, Ward-7(4),Hyderabad, Hyderabad

ITA 686/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6480 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 21-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: S RAMA RAO
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA.NO.686/HYD/2015 ASSESSMENT YEAR 2010-2011 MR. SANJAY KUMAR CHAVAN, HYDERABAD- 500029. PAN AATPC 3976C. VS. THE INCOME TAX OFFICER WARD-7(4), A.C. GUARDS, I.T. TOWERS, HYDERABAD. (APPELLANT) (RESPONDENT) ITA.NO.687/HYD/2015 ASSESSMENT YEAR 2010-2011 MR. SAN TOSH KUMAR CHAVAN, HYDERABAD- 500029. PAN AC BP C 7519H VS. THE INCOME TAX OFFICER WARD-7(4), A.C. GUARDS, I.T. TOWERS, HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 07.06.2016 DATE OF PRONOUNCEMENT : 15 .06.2016 ORDER BOTH ARE ASSESSEES APPEALS FOR THE A.Y. 2010- 2011. IN BOTH THE CASES, THE ASSESSEE IS AGGRIEVED BY THE ESTIMATION OF THE NET PROFIT AT 15% OF THE TURNOVER ON BANGLE BUSINESS AND ALSO AGAINST THE CONFIRMATION O F RS.17,100 BEING INTEREST INCOME EARNED FROM BANK. 2. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF 96 DAYS IN FILING OF THE APPEALS BEFORE THE TRIBUNA L. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION O F DELAY 2 ITA.NO.686 & 687/HYD/2015 MR. SANJAY KUMAR CHAVAN & MR. SANTOSH KUMAR CHAVAN ALONG WITH AN AFFIDAVIT OF THE ASSESSEES HEREIN. I N THE APPLICATION, IT IS STATED THAT THE APPELLATE ORDER OF THE CIT(A) WAS SERVED ON THE ASSESSEES ON 16.12.2014 AN D THEREFORE, THE PERIOD OF 60 DAYS THEREFROM ENDED ON 14.02.2015. SINCE THE ASSESSEE WAS ALSO DIRECTOR OF M/S. SHRINGAR FASHION JEWELLERY PVT. LTD., HYDERABAD, HE WAS ENGAGED IN THE WORK OF EXPANSION OF THE BUSINESS WH ICH WAS ORIGINALLY SCHEDULED ON 26.03.2015 AND THEREFOR E, COULD NOT PURSUE THE FILING OF THE APPEAL WITHIN TH E TIME DUE TO THE PREOCCUPATION OF THE WORK OF NEW BUSINES S PREMISES. IT WAS SUBMITTED THAT HE COULD NOT CHOOSE THE COUNSEL WITHIN THE TIME AND THE MATTER GOT DELAYED AND EVEN THE COMMENCEMENT OF THE BUSINESS OF THE NEW PREMISES COULD NOT BE COMPLETED AS PER THE SCHEDULE AND IT PROLONGED TILL 16.05.2015. IT WAS THEREAFTER, TH AT THE ASSESSEE CONSULTED HIS ADVOCATE ON 19.05.2015 AND APPEAL WAS FILED ON 21.05.2015. FOR THESE REASONS, THE ASSESSEE PRAYED FOR CONDONATION OF DELAY. 3. THE LD. D.R. OBJECTED TO THE CONDONATION OF DELAY STATING THAT ASSESSEE HAS NOT GIVEN REASONABL E CAUSE FOR THE DELAY. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS EX PLAINED THE DELAY AND I AM ALSO SATISFIED THAT THE DELAY IS FOR BONAFIDE REASONS. FOR THE SAID REASONS, THE DELAY I S CONDONED. 3 ITA.NO.686 & 687/HYD/2015 MR. SANJAY KUMAR CHAVAN & MR. SANTOSH KUMAR CHAVAN 5. AS REGARDS THE MERITS OF THE APPEALS ARE CONCERNED, I FIND THAT ASSESSEES HAVE STARTED BANG LE BUSINESS IN THE NAME AND STYLE OF M/S. SHRINGAR FAS HION JEWELLERY PVT. LTD., DURING THE RELEVANT ASSESSMENT YEAR AND IT WAS ALSO CLOSED DURING THE RELEVANT ASSESSME NT YEAR. IT IS ALSO SEEN THAT THE ASSESSEE HAD NOT DIS CLOSED THE BANK ACCOUNT HELD IN ICICI BANK, STATION ROAD, NAMPALLY BRANCH, HYDERABAD AND THAT THE ASSESSEE HA D MADE CASH DEPOSITS INTO THE SAID BANK A/C. ON ENQUI RY, DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143 (3), THE ASSESSEE EXPLAINED THAT THE TURNOVER OF THE BAN GLE BUSINESS WAS RS.23,43,524 AND THE GROSS PROFIT WAS ADMITTED AT RS.3,03,714. SINCE THE ASSESSEE DID NOT MAINTAIN PROPER BOOKS OF ACCOUNT, THE A.O. REJECTED THE RESULTS REPORTED BY THE ASSESSEE AND TREATED 20% OF THE TURNOVER AS AGAINST 6.4% OFFERED BY THE ASSESSEE AS THE GROSS INCOME OF THE ASSESSEE AND BROUGHT IT TO TAX. SIMILARLY, HE ALSO OBSERVED THAT THE ASSESSEE HAS N OT OFFERED TO TAX INTEREST INCOME EARNED FROM ICICI BA NK OF RS.33,502 AND BROUGHT IT TO TAX. AGGRIEVED, ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION OF RS.17,100 OUT OF THE ADDITION MADE OF RS.33,502 BY OBSERVING THAT THE BALANCE OF RS.19,06 3 WAS OFFERED TO TAX. AS REGARDS THE ESTIMATION OF INCOME IS CONCERNED, HE RESTRICTED THE ESTIMATION TO 15% OF T HE TURNOVER AS AGAINST 20% OF TURNOVER TREATED AS INCO ME BY THE A.O. AGAINST THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 4 ITA.NO.686 & 687/HYD/2015 MR. SANJAY KUMAR CHAVAN & MR. SANTOSH KUMAR CHAVAN 5.1. I FIND THAT ASSESSEE HAS DONE THE BUSINESS OF BANGLES ONLY FOR THE RELEVANT ASSESSMENT YEAR AND H AS FILED THE TRADING, P & L A/C BY WHICH THE NET INCOM E HAS BEEN OFFERED AT 6.4% OF THE TOTAL TURNOVER. THERE I S NO DISPUTE WITH REGARD TO THE TURNOVER OFFERED BY THE ASSESSEE BUT IT IS ONLY ESTIMATION OF THE NET PROFI T WHICH IS UNDER CHALLENGE BEFORE THE TRIBUNAL. ASSESSEE SUBMI TS THAT BOTH DIRECT AND INDIRECT EXPENSES HAVE TO BE T AKEN INTO CONSIDERATION BEFORE ESTIMATING THE INCOME AND 15% ESTIMATED BY THE CIT(A) IS EXCESSIVE. 6. LD. D.R. HOWEVER, SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE CIT(A) HAS BEEN LIBER AL AND REASONABLE IN ESTIMATING THE INCOME AT 15% AS AGAIN ST 20% OF THE TURNOVER ESTIMATED BY THE A.O. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS NO T MAINTAINED ANY BOOKS OF ACCOUNT AND HAS CONFIRMED T HAT THE TURNOVER OF THE BANGLES BUSINESS HAS BEEN DEPOS ITED INTO THE ICICI BANK A/C WHICH WAS NOT DISCLOSED TO THE DEPARTMENT. THEREFORE, THE CONTENTION OF THE ASSESS EE WITH REGARD TO THE EXPENDITURE ALSO IS NOT SUBSTANT IATED BY ANY RELEVANT MATERIAL ON RECORD. THUS, THE REVEN UE AUTHORITIES HAVE NO OPTION BUT TO ESTIMATE THE INCO ME. THE ESTIMATION OF NET PROFIT AT 15% BY THE CIT(A) A PPEARS TO BE EXCESSIVE AS COMPARED TO 6.4% OFFERED BY THE ASSESSEE. THEREFORE, I RESTRICT THE SAME TO 12% OF THE 5 ITA.NO.686 & 687/HYD/2015 MR. SANJAY KUMAR CHAVAN & MR. SANTOSH KUMAR CHAVAN TURNOVER. THUS, GROUNDS OF APPEAL NO. 3 AND 4 ARE ACCORDINGLY PARTLY ALLOWED. 8. AS REGARDS GROUND NO.2, WE FIND THAT THE ASSESSEE HAS NOT OFFERED THE INTEREST INCOME TO TAX AND EVEN BEFORE ME, THE ASSESSEE IS NOT ABLE TO SUBSTAN TIATE ITS CLAIM FOR DELETION OF THE ADDITION. IN VIEW OF THE SAME, THIS GROUND OF APPEAL IS REJECTED. 9. IN THE RESULT, ITA.NO.686/HYD/2015 OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. ITA.NO.687/HYD/2015 10. IN THIS APPEAL ALSO, EXCEPT FOR THE CHANGE IN THE QUANTUM OF TURNOVER AND THE QUANTUM OF INTEREST BROUGHT TO TAX, THE FACTS ARE ALL SIMILAR. FOR THE REASONS GIVEN IN THE ABOVE APPEAL, THE APPEAL OF THE ASSESS EE (ITA.NO.687/HYD/2015) IS ALSO TREATED AS PARTLY ALL OWED. 11. IN THE RESULT, APPEALS OF BOTH THE ASSESSEES ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.06.20 16. SD/- (SMT. P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 15 TH JUNE, 2016 VBP/- 6 ITA.NO.686 & 687/HYD/2015 MR. SANJAY KUMAR CHAVAN & MR. SANTOSH KUMAR CHAVAN COPY TO : 1. MR. SAN JAY KUMAR CHAVAN, HYDERABAD. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. MR. SANTOSH KUMAR CHAVAN, HYDERABAD. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO.9, HIMAYA TNAGAR, HYDERABAD 500 029. 3. THE INCOME TAX OFFICER, WARD - 7(4), A.C. GUARDS, I.T. TOWERS, HYDERABAD. 4. CIT(A) - VI, HYDERABAD. 5. CIT - VI , HYDERABAD. 6 . D.R. ITAT B BENCH, HYDERABAD. 7 . GUARD FILE