Appeal Details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 98868 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 7 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-12-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
02-12-2015
Assessment Year
2009-2010
Appeal Filed On
09-05-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.703/HYD/2013 (ASSESSMENT YEARS 2009-10) INCOME TAX OFFICER WARD 7 ( 1), HYDERABAD V/S SHRI TANVEER PASHA, HYDERABAD (PAN - AGUPP 9016 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.SITARAM DR RESPONDENT BY : SHRI P.C.YADAV DATE OF HEARING 02.12.2015 DATE OF PRONOUNCEMENT 23.12.2015 O R D E R PER D.MANMOHAN, VICE PRESIDENT : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX(APPEALS)-V I, HYDERABAD AND IT PERTAINS TO ASSESSMENT YEAR 2009-10. 2. THE ADDITION MADE BY THE ASSESSING OFFICER TOW ARDS UNEXPLAINED INVESTMENT IN THE PURCHASE OF CATTLE FE ED, HAVING BEEN SET ASIDE BY THE CIT(A), REVENUE IS IN APPEAL BEFOR E US. 3. FACTS RELEVANT IN THIS REGARD ARE STATED IN BR IEF. ASSESSEE IS ENGAGED IN DAIRY BUSINESS. FOR THE YEAR UNDER CONSI DERATION, HE ADMITTED TOTAL INCOME OF RS.5,20,450, WHICH INCLUDE D AGRICULTURAL INCOME OF RS.1,20,000. DURING THE COURSE OF SCRUTIN Y PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE ENTERED INTO CERTAIN TRANSACTIONS WITH CERTAIN BREWERIES COMPANIES AND, THEREFORE, CALLED UPON THE ASSESSEE TO EXPLAIN THE TRANSACTIONS. IN RESPONSE THERETO, THE ASSESSEE SUBMITTED THAT HE HAS PURCHASED FEED F ROM THE SAID COMPANIES AND THE SAME WAS CONFIRMED BY THE BREWERI ES COMPANIES, ITA NO.703/HYD/2013 SHRI TANVEER PASHA, HYDERABAD 2 ALONGWITH THE LEDGER EXTRACTS. AS PER THE ABOVE MA TERIAL, IT IS NOTICED THAT THE ASSESSEE PURCHASED FROM THE FOLLOWING THRE E COMPANIES- (A) SKOL BREWERIES LIMITED RS.31,00,304 (B) UNITED BREWERIES LIMITED RS. 6,11,263 (C) UNITED SPIRITS LIMITED RS.32,35,377 TOTAL RS.69,47,344 HOWEVER, IN THE RETURN OF INCOME, ASSESSEE HAS SHOW N TOTAL PURCHASE OF FEEDS ONLY TO THE EXTENT OF RS.23,30,600. THE AS SESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE B ALANCE FEED OF RS.46,16,744 SHOULD NOT BE TREATED AS UNEXPLAINED I NVESTMENT. IN THIS REGARD, THE ASSESSEE SUBMITTED THAT OUT OF TOT AL PURCHASES, FEED TO THE EXTENT OF RS.23,30,600 WAS USED IN HIS OWN DAI RY BUSINESS; TO THE EXTENT OF RS.18,06,750 WAS PURCHASED ON BEHALF OF H IS WIFE, WHICH WAS DECLARED IN THE RETURN OF THE ASSESSEES WIFE; AND THE REMAINING FEED OF RS.28,09,994 WAS SOLD ON COMMISSION TO VARIOUS D AIRY FARMS AND THE INCOME THEREFROM OF RS.3,60,000 HAS BEEN DULY DECLARED UNDER THE NAME AND STYLE OF DECCAN CATTLE FEED. 4. THE ASSESSING OFFICER WAS NOT SATISFIED WITH TH E EXPLANATION AND HE PROCEEDED TO TREAT THE SUM OF RS .46,16,744 AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE . ACCORDINGLY, ASSESSMENT WAS COMPLETED ON A REVISED TOTAL INCOME OF RS.50,17,194. 5. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A ) THAT THE PURCHASES ARE NOT DISPUTED AND THE MODE OF UTILISAT ION OF THE PURCHASES WAS REFLECTED IN THE BOOKS OF THE ASSESSE E AS WELL AS HIS WIFES BOOKS AND HENCE, ADDITION IS UNWARRANTED. T HE LEARNED CIT(A) OBSERVED THAT TO THE EXTENT OF RS.23,30,600, THE FE ED PURCHASED BY THE ASSESSEE WAS SHOWN TO HAVE BEEN CONSUMED IN ASS ESSEES OWN ITA NO.703/HYD/2013 SHRI TANVEER PASHA, HYDERABAD 3 DAIRY BUSINESS AND IT WAS DEBITED TO THE PROFIT & L OSS ACCOUNT. FEED WORTH RS.18,06,750 WAS SHOWN TO HAVE BEEN PURCHASED BY THE ASSESSEES WIFE, SMT. AYESHA RAHMATH, WHO ALSO RUNS HER OWN DAIRY AND FILED THE RETURN OF INCOME. IN FACT, SHE WAS AL SO ASSESSED TO TAX IN THE SAME WARD. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS OF THE OPINION THAT LACK OF VOUC HERS ALONE IS NOT SUFFICIENT TO DENY THE TRUTH, AND IT IS NOT CORRECT TO PRESUME THAT ALL THE FEED PURCHASED BY THE ASSESSEE BELONGED TO HIM ALON E. 6. REGARDING THE BALANCE AMOUNT OF RS.28,09,994, W HICH WAS SAID TO HAVE BEEN SOLD ON COMMISSION BASIS TO OTHE R DAIRIES, THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE DECLARED COMMISSION RECEIPT, WHICH WAS NOT DISPUTED. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE PURCHASED FEED FROM THREE PARTIES AND CASH PAYMENTS WERE MADE TO THE SAID PARTIES. HENCE, PURCHASES CANNOT B E TERMED AS INVESTMENTS SO AS TO ATTRACT THE PROVISIONS OF S.69 . HOWEVER, SINCE THE PAYMENTS FOR PURCHASES WERE MADE THROUGH CASH AND T HE SALES WERE WITHOUT VOUCHERS OR BILLS, THE LEARNED CIT(A) WAS O F THE OPINION THAT CERTAIN ELEMENT OF INFLATION IN THE RATE OF PURCHA SES CANNOT BE RULED OUT. UNDER THE CIRCUMSTANCES, HE SOUGHT TO ESTIMATE PROFIT ON SALES, ON COMMISSION BASIS, AND APPLYING A PROFIT RATE OF 10% , HE DETERMINED THE PROFIT ON SUCH SALES AT RS.2,80,999 AS AGAINST THE NET PROFIT OF RS.1,73,200 ADMITTED BY THE ASSESSEE FROM COMMISSIO N SALES. APPEAL WAS THUS PARTLY ALLOWED. 7. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 8. AS COULD BE NOTICED FROM THE GROUNDS OF APPEAL AND ALSO FROM THE ASSESSMENT ORDER, THE SOURCE OF PURCHASES IS NOT DISPUTED IN AS MUCH AS NO ADDITION WAS MADE WITH REFERENCE TO T HE PURCHASES MADE AND CONSUMED IN ASSESSEES OWN DAIRY BUSINESS, BUT ADDITION ITA NO.703/HYD/2013 SHRI TANVEER PASHA, HYDERABAD 4 WAS SOUGHT TO BE MADE ONLY WITH REFERENCE TO THE PU RCHASES MADE AND USED IN ASSESSEES WIFES BUSINESS AND ALSO SOLD ON COMMISSION BASIS. IN SO FAR AS THE PURCHASES RELATING TO THE WIFE OF THE ASSESSEE ARE CONCERNED, THE CASE OF THE ASSESSEE IS THAT SHE HAS SHOWN THE FEED IN HER BOOKS, AND SHE HAS TAKEN INTO CONSIDERATION THE SAID FEED WHILE DECLARING INCOME AND SHE WAS ALSO ASSESSED TO TAX B Y THE SAME ASSESSING OFFICER, WHO WAS IN CHARGE OF THE ASSESSE ES CASE. THIS FACT WAS TAKEN NOTE OF BY THE LEARNED CIT(A), WHILE HOLD ING THAT THE ADDITION RELATABLE TO THIS SUM OF RS.18,06,750 IS M ERELY ON ASSUMPTION. 9. AT THE TIME OF HEARING, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT MERELY BECAUSE ASSESS EES WIFE WAS ASSESSED TO TAX IN THE SAME WARD, IT CANNOT BE ASSU MED THAT THE INVESTMENTS ARE EXPLAINED, IN VIEW OF THE FACT THAT THE CASH PURCHASES WERE NOT PROPERLY EXPLAINED AND THERE WAS ABSENCE O F BILLS FOR TRANSFER OF FEED FROM ASSESSEE SHRI TANVEER PASHA, TO HIS WI FE. 10. AS REGARDS THE BALANCE AMOUNT OF RS.28,09,994, THE CASE OF THE ASSESSEE WAS THAT HE HAS SOLD THE FEED ON CO MMISSION BASIS TO OTHER DAIRIES AND HAS SHOWN A NET PROFIT OF RS.1,7 3,200 ON SUCH SALES. WITH REGARD TO THIS ALSO THE ASSESSEE HAVING NOT PR OVED THE SOURCE OF PURCHASES, THE ASSESSING OFFICER WAS HELD TO BE NOT JUSTIFIED IN TREATING THE ENTIRE AMOUNT AS UNEXPLAINED INVESTMENT. THE LE ARNED CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT S.69 IS NOT APPLICABL E TO THE INSTANT CASE. 11. ON THE OTHER HAND, THE LEARNED COUNSEL, APPEAR ING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE SOURCE OF PURCHASE OF FEED IS NOT DISPUTED BY THE ASSESSING OFFICER, IN VIEW OF THE F ACT THAT THE FEED PURCHASED AND UTILISED IN ASSESSEES OWN BUSINESS W AS NOT ADDED AS UNEXPLAINED INVESTMENT. THIS IN ITSELF INDICATES T HAT THE SOURCE OF ITA NO.703/HYD/2013 SHRI TANVEER PASHA, HYDERABAD 5 PURCHASES IS NOT DISPUTED. THE ONLY CASE OF THE AS SESSING OFFICER IS THAT THE ENTIRE FEED WAS NOT CONSUMED IN ASSESSEES OWN BUSINESS. HOWEVER, THE LEARNED CIT(A) HAS ELABORATELY CONSIDE RED THE FACTS OF THE CASE AND IN PARTICULAR, THE FACTUM OF THE RETUR N FILED BY THE ASSESSEES WIFE BEFORE THE SAME ASSESSING OFFICER, WHEREIN THE FEED WORTH RS.18,06,750 WAS SHOWN TO HAVE BEEN PURCHASED , AND THUS, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE SAID A DDITION, SINCE THE ASSESSING OFFICER SOUGHT TO INVOKE THE PROVISIONS O F S.69 ON MERE ASSUMPTION. SIMILARLY WITH REGARD TO THE FEED SOLD TO OTHER PARTIES, THE CASE OF THE LEARNED COUNSEL IS THAT THE PURCHASES C ANNOT BE TERMED AS INVESTMENT, SINCE HE RESOLD IT AND DECLARED PROFIT OUT OF THAT. HE THUS STRONGLY RELIED ON THE ORDER PASSED BY THE LEARNED CIT(A). 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE RECORD. AS ALREADY POINTED OUT BY THE L EARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE, ASSESSEE PURCH ASED FEED FROM THREE PARTIES AND PAYMENTS WERE MADE IN CASH TOWARD S PURCHASES TO THE TUNE OF RS.69,47,344, WHEREAS THE ASSESSING OFF ICER SOUGHT TO MAKE AN ADDITION OF RS.46,16,744, WHICH IN ITSELF I NDICATES THAT THE ASSESSING OFFICER IS NOT DISPUTING THE SOURCE OF AV AILABILITY OF CASH. THE ADDITION WAS MADE ONLY ON THE ASSUMPTION THAT THE A SSESSEE HAVING NOT UTILISED THE FEED IN ASSESSEES OWN BUSINESS, A SSUMPTION APPEARS TO BE THAT THERE WAS NO NEED TO PURCHASE FEED TO TH E TUNE OF RS.69,47,344. HOWEVER, FACT REMAINS THAT THE ASSES SEES WIFE HAS SHOWN TO HAVE INCLUDED FEED WORTH RS.18,06,750 IN HER OWN HANDS AND SHE WAS ALSO ASSESSED TO TAX BEFORE THE SAME AS SESSING OFFICER, AND THE EXPENSES OF RS.18,06,750 DEBITED TOWARDS FE ED WAS REFLECTED IN HER BOOKS. THE ASSESSING OFFICER HAD NOT RAISED ANY DISPUTE IN THE HANDS OF THE ASSESSEES WIFE. UNDER THESE PECULIAR CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE LEARNED CIT(A) IS JUSTI FIED IN DELETING THE SAID ADDITION. SIMILARLY, WITH REGARD TO THE PURCHA SES MADE AND SOLD ON ITA NO.703/HYD/2013 SHRI TANVEER PASHA, HYDERABAD 6 COMMISSION TO OTHER DAIRIES, HE LEARNED CIT(A) HAS RIGHTLY NOTICED THAT PROVISIONS OF S.69 COME INTO PLAY ONLY WITH REGARD TO INVESTMENTS MADE WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUN T, WHEREAS IN THE INSTANT CASE, ASSESSEE HAS RECORDED PURCHASES IN T HE BOOKS OF ACCOUNT. FURTHER, IT WAS NOT AN INVESTMENT, BUT PUR CHASES WITH A VIEW TO EARNING COMMISSION AND IN FACT COMMISSION INCOME WAS ALSO OFFERED TO TAX, THOUGH IN THE OPINION OF THE LEARNED CIT(A) , THE INCOME OFFERED TO TAX WAS LOW AND ACCORDINGLY HE ESTIMATED THE PRO FIT AT RS.2,80,999 AS AGAINST NET PROFIT RS.1,73,200, OFFERED BY THE A SSESSEE. HERE ALSO, WE ARE OF THE OPINION THAT THE SOURCE OF PURCHASES HAVING NOT BEEN SPECIFICALLY DISPUTED BY THE ASSESSING OFFICER, LEA RNED CIT(A) IS JUSTIFIED IN DELETING THE ADDITION TO THE EXTENT OF RS.28,09,994, THOUGH HE HAS MADE AN ADDITION, IN THE FORM OF QUANTIFYING THE PROFIT ON SALE OF FEED PURCHASED BY THE ASSESSEE. HAVING REGARD T O THE CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIR MITY IN THE ORDER PASSED BY THE LEARNED CIT(A), AND THEREFORE, WE DIS MISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN THE COURT ON 23RD DECEMBER, 2 015 SD/- SD/- (B.RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT DT/- 23 RD DECEMBER, 2015 COPY FORWARDED TO: 1. SHRI TANVEER PASHA, 12-2-419/B/10 &B/11, PEARL RESIDENCY, ALAPATINAGAR, MEHDIPATNAM, HYDERABAD 2. INCOME TAX OFFICER, WARD 7(1) , HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) V I, HYDERABAD 4. COMMISSIONER OF INCOME - TAX V I, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S. ITA NO.703/HYD/2013 SHRI TANVEER PASHA, HYDERABAD 7
