M/s Bhavani erectors Private Limited , Raichur V. Assistant Commissioner of Income Tax Circle-1 , Raichur

ITA 76/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2319 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 10-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.N SIDDAPPAJI
• Assessee Lawyers: R SURESH KUMAR
• Keywords: Set aside
• Section: 133A; 143(2); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.76/BANG/2019 ASSESSMENT YEAR : 2015-16 M/S BHAVANI ERECTORS PVT. LTD., P.B NO.002, PLOT NO.103&104, SHRI SUGURESWAR NAGAR, SAKTHI NAGAR, RAICHUR. PAN AACCB 0924 H. VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, RAICHUR. APPELLANT RESPONDENT ASSESSEE BY : SHRI R SURESH KUMAR, C.A REVENUE BY : SHRI R.N SIDDAPPAJI, ADDL. CIT DATE OF HEARING : 20.06.2019 DATE OF PRONOUNCEMENT : 20.06.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 31/10/2018 PASSED BY LD CIT(A), KALABURGI AND IT RE LATES TO ASST. YEAR 2015-16. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ORDER OF THE AO IN ESTIMATING THE INCOME OF THE ASSESSEE AT 8% OF THE GROSS RECEIPTS. ITA NO.76/BANG/2019 PAGE 2 OF 5 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF EXECUTION OF EPC CONTRAC TS. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 30/9/2015 DECLARING A TOTAL INCOME OF RS.1543.69 LAKHS. THE ASSESSEE WAS SUBJECTED TO A SURVEY OPERATION U/S 133A OF THE ACT ON 19/11/ 2015. DURING THE COURSE OF SURVEY, IT WAS STATED BY THE ASSESSEE THA T THE BOOKS OF ACCOUNTS ARE MAINTAINED IN TALLY ACCOUNTING PACKAGE AT ITS C ORPORATE OFFICE IN KERALA. HOWEVER, THE ASSESSEE FURNISHED SOFT COPIES OF BOOK S OF ACCOUNTS DURING THE COURSE OF SURVEY PROCEEDINGS. ON VERIFICATION OF THE SAME, THE SURVEY TEAM NOTICED MANY DISCREPANCIES. WHEN THIS FACT WA S POINTED OUT TO THE ASSESSEE, IT STATED THAT THE COMPUTER HAS GOT CORRU PTED. THOUGH THE ASSESSEE FURNISHED RECTIFIED COPIES OF BOOKS OF ACC OUNT, YET THE ASSESSEE COULD NOT RECONCILE THE DISCREPANCIES NOTICED IN THE SURVEY WITH THE CORRECTED SET OF BOOKS OF ACCOUNTS. SUBSEQUENTLY THE AO ISSUED NOTICE U/S 143(2) OF THE ACT ON 19/9/2016. BASED ON THE S TATEMENT RECORDED FROM THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY ON VA RIOUS DATES AFTER SURVEY, AND AFTER HEARING AUTHORIZED REPRESENTATIVE , THE AO ESTIMATED THE INCOME OF THE ASSESSEE AT 8% OF THE TOTAL TURNOVER AS REPORTED IN FORM NO.26AS AND ACCORDINGLY DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.1787.08 LAKHS. IN EFFECT, THE AO DID NOT CONSID ER THE RESULT DECLARED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. THE SAME WAS CONFIRMED BY THE LD CIT(A) AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. WE HEARD THE PARTIES AND PERUSED THE RECORD. WE NOTICED THAT THE AO HAS NOT EXAMINED THE BOOKS OF ACCOUNT OF THE ASS ESSEE. ADMITTEDLY, THE ASSESSEE HAS FILED RETURN OF INCOME PRIOR TO TH E DATE OF SEARCH AND IT WAS STATED THAT THE ACCOUNTS OF THE ASSESSEE HAVE B EEN AUDITED AND TAX AUDIT REPORT WAS ALSO FILED. WE NOTICED THAT THE A O HAS GIVEN IMPORTANCE TO THE SOFT COPY OF BOOKS FURNISHED DURING THE COURSE OF SURVEY FROM WHICH ITA NO.76/BANG/2019 PAGE 3 OF 5 MANY DISCREPANCIES WERE NOTICED BY THE SURVEY TEAM. WE NOTICE THAT THE ASSESSEE HAS ADMITTED THE MISTAKES AND HAS EXPLAINE D THAT THEY HAVE OCCURRED ON ACCOUNT OF ERROR IN THE COMPUTER SYSTEM . THERE IS NO DISPUTE WITH REGARD THE FACT THAT THE ASSESSEE HAS FURNISHE D RECTIFIED COPIES OF BOOKS OF ACCOUNTS. THE SAID BOOKS OF ACCOUNT HAVE NOT BEEN CONSIDERED BY THE AO, ONLY FOR THE REASON THAT THE ASSESSEE CO ULD NOT RECONCILE THE DISCREPANCIES NOTICED IN THE SOFT COPY OF BOOKS OF ACCOUNT WITH RECTIFIED COPY OF BOOKS OF ACCOUNT. 5. WE HAVE NOTICED EARLIER THAT THE SOFT COPIES OF BOOKS OF ACCOUNT FURNISHED DURING THE COURSE OF SURVEY PROCEEDINGS H AVE BEEN ADMITTED BY THE ASSESSEE AS INCORRECT ON ACCOUNT OF ERROR IN TH E COMPUTER SYSTEM. THE SAID FACT HAS NOT BEEN FOUND TO BE INCORRECT BY THE AO. WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN ASKING THE ASSESSE E TO RECONCILE THE DISCREPANCIES NOTICED IN THE INCORRECT BOOKS OF ACC OUNT WITH CORRECT BOOKS. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS FILE D ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON THE BASIS OF CORREC TED BOOKS OF ACCOUNT AND FURTHER THEY HAVE BEEN AUDITED ALSO. THIS IS E VIDENCED BY THE TAX AUDIT REPORT. ACCORDINGLY, WE ARE OF THE VIEW THAT THE A O SHOULD HAVE PROCEEDED TO ASSESS THE INCOME OF THE ASSESSEE ON THE BASIS O F RETURN OF INCOME AND THE RELATED CORRECTED BOOKS OF ACCOUNT. ACCORDINGL Y WE ARE OF THE VIEW THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN ESTIMATING THE INCOME OF THE ASSESSEE BY DISREGARDING RETURN OF INCOME AND THE BOOKS OF A CCOUNT. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ASSESSMEN T HAS TO BE DONE DENOVO BY AO BY DULY CONSIDERING THE RETURN OF INCOME AND THE RELATED BOOKS OF ACCOUNT OF THE ASSESSEE. ITA NO.76/BANG/2019 PAGE 4 OF 5 6. ACCORDINGLY WE SET ASIDE THE ORDER PASSED B Y THE LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE AO WITH T HE DIRECTION TO DO THE ASSESSMENT DENOVO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE, 2019. SD/- SD/- (PAVAN KUMAR GADALE) JUDICIAL MEMBER (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 20 TH JUNE, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3 . THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, BANGALORE. ITA NO.76/BANG/2019 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..