Laxmi Narayan Agarwal, Hyd, Hyderabad V. ACIT, Cirlce-6(1), Hyd, Hyderabad

ITA 787/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5941 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 26-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Business income; Search and seizure
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 787/HYD/2016 ASSESSMENT YEAR: 2002-03 SRI LAXMI NARAYAN AGARWAL, HYDERABAD. PAN ACDPA 7791 B VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 6(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SMT. U. MINICHANDRAN DATE OF HEARING : 13-12-2016 DATE OF PRONOUNCEMENT : 21-12-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-9, HYDERABAD, DATED 22 ND MARCH, 2016 FOR AY 2002-03. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS ENGAGED IN THE BUSINESS OF TRADING SCRAP AND FILED HIS ORIGINA L RETURN OF INCOME FOR THE AY 2002-03 ON 09/10/2002 ADMITTING TAXABLE INCOME OF RS. 81,160/-. SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE INCOME-TAX ACT WERE CONDUCTED IN THE RESIDENTIAL PREMISES OF T HE ASSESSEE ON 07/11/2007. SUBSEQUENTLY, IN RESPONSE TO NOTICE ISS UED U/S 153A, THE ASSESSEE FILED THE RETURN ADMITTING TAXABLE INCOME OF RS. 2,76,990/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 153A OF IT ACT ON 30/11/2009 BY MAKING THE FOLLOWING ADDITIONS: 2 ITA NO. 787/H/16 SRI LAXMI NARAYAN AGARWAL 1. DIFFERENCE IN PROFIT RS. 1,23,435/- 2. DISALLOWANCE OF DEDUCTION U/S 80U RS. 40,000/-. 3. THE ASSESSEE HAS RAISED 9 GROUNDS OF APPEAL, OUT OF WHICH GROUND NOS. 1 IS GENERAL IN NATURE. GROUND NOS. 2 & 3 DID NOT ARISE OUT OF THE ORDER OF THE CIT(A), HENCE, WE DO NOT DE AL WITH THE SAME. GROUND NOS. 4 TO 6 ARE PERTAINING TO THE ADDITION O F RS. 1,23,435/- ON ACCOUNT OF ESTIMATION OF PROFIT @ 6% OF SALES. GROU ND NOS. 7 & 8 PERTAIN TO THE DISALLOWANCE OF DEDUCTION CLAIMED U/ S 80U OF THE ACT FOR RS. 40,000/-. 4. AS REGARDS THE ADDITION OF RS. 1,23,435/-, THE A O NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE COULD NOT SUBMIT THE BILLS FOR PURCHASE AND SALES AND AS IT W AS NOT POSSIBLE TO VERIFY THE PURCHASE AND SALES IN THE ABSENCE OF ANY BILLS, THE AO REJECTED THE BOOKS OF ACCOUNT SUBMITTED BY THE ASSE SSEE AND ESTIMATED THE NET PROFIT ON THE TOTAL SALES ADMITTE D @ 6% AND THE DIFFERENCE IN THE PROFIT ADMITTED AMOUNTING TO RS. 1,23,435/- AS INCOME OF THE ASSESSEE. 5. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT T HE ADDITION IS NOT BASED ON ANY INCRIMINATING MATERIAL AND HENCE I T IS LIABLE TO BE DELETED. REJECTING THE CONTENTION OF THE ASSESSEE, THE CIT(A) CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT TH E ASSESSEE COULD NOT PRODUCE SUFFICIENT EVIDENCE WITH REGARD TO THE PURCHASES AND SALES MADE BY HIM, THEREFORE, THE AO IS JUSTIFIED I N REJECTING THE BOOKS AND ESTIMATING THE INCOME. FURTHER, HE OBSERV ED THAT THE ASSESSEES CONTENTION THAT THIS ADDITION IS NOT BAS ED ON ANY INCRIMINATING MATERIAL HAS NOT BEEN RAISED IN GROUN DS OF APPEAL AND HENCE THIS ASPECT IS NOT ADJUDICATED UPON. 6. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISION OF T HE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2007 -08 IN ITA NO. 3 ITA NO. 787/H/16 SRI LAXMI NARAYAN AGARWAL 1391/H/10, ORDER DATED 17/06/2015, A COPY OF WHICH IS AVAILABLE ON RECORD. 7. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER S OF REVENUE AUTHORITIES. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. WE FIND THAT THE ISSUE IN DISPUTE IS SQU ARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH OF T HIS TRIBUNAL (SUPRA), WHERE IN THE BENCH HAS HELD AS UNDER: 8. AS REGARDS GROUND RELATING TO ESTIMATION OF PROF ITS, WE HEARD THE RIVAL PARTIES. ADMITTEDLY, THERE IS NO INCRIMIN ATING MATERIAL SEIZED AS A RESULT OF SEARCH AND SEIZURE OPERATION INDICATING THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AR E EITHER DEFECTIVE OR APPELLANT HAD INFLATED THE EXPENDITURE OR SUPPRESSED THE SALES RESULTING IN LOWER RETURNED INCOME. IT IS TRITE LAW THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL SUGGESTIN G THAT BOOK RESULTS SHOULD BE REJECTED THE ADDITION CANNOT BE M ADE ON ESTIMATE BASIS IN THE ASSESSMENT MADE U/S. 153A. AC CORDINGLY, THE ADDITION IS DELETED. HENCE, THIS GROUND OF APPE AL FILED BY THE ASSESSEE IS ALLOWED. 8.1 AS THE ISSUE IS MATERIALLY IDENTICAL IN THE PRE SENT CASE TO THAT OF AY 2007-08, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE SET ASIDE THE ORDER OF THE CIT(A) AND DEL ETE THE ADDITION MADE ON THIS COUNT. ACCORDINGLY, GROUND NOS. 4 TO 6 ARE ALLOWED. 9. AS REGARDS GROUND NOS. 7 & 8 PERTAINING TO DISAL LOWANCE OF DEDUCTION U/S 80U OF RS. 40,000/-, DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED CERTIFICATE ISS UED BY THE CIVIL SURGEON GANDHI HOSPITAL HYDERABAD, IN SUPPORT OF HI S CLAIM OF DEDUCTION U/S 80U OF RS. 40,000/-. WHEN THE AO QUES TIONED ABOUT THE GENUINENESS OF THE CERTIFICATE DATED 28/09/1999, TH E ASSESSEE AGREED TO WITHDRAW THE CLAIM MADE U/S 80U OF THE ACT AND A CCORDINGLY FILED A LETTER WITH REGARD TO THIS ADDITION. 10. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THIS ADDITION IS NOT BASED ON ANY INCRIMINATING/SEIZED MATERIAL AND HENCE IT IS LIABLE TO BE DELETED. REJECTING THE CONTENTION OF THE ASSE SSEE, THE CIT(A) 4 ITA NO. 787/H/16 SRI LAXMI NARAYAN AGARWAL OBSERVED THAT THE ASSESSEE HIMSELF FILED A LETTER D URING THE COURSE OF ASSESSMENT PROCEEDINGS WITHDRAWING THE CLAIM. FURTH ER, HE OBSERVED THAT THE ASSESSEES CONTENTION THAT THIS ADDITION I S NOT BASED ON ANY INCRIMINATING MATERIAL HAS NOT BEEN RAISED IN GROUN DS OF APPEAL AND HENCE THIS ASPECT IS NOT ADJUDICATED UPON. ACCORDIN GLY, HE UPHELD THE ADDITION. 11. THE LD. AR SUBMITTED THAT THE ISSUE IN DISPUTE IS COVERED AGAINST THE ASSESSEE BY HIS OWN CASE IN AY 2007-08. 12. LD. DR RELIED ON THE ORDERS OF REVENUE AUTHORIT IES. 13. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL FACTS ON RECORD. AS THE ASSESSEE HIMSELF WITHDRAWN THE C LAIM BEFORE THE AO, THE CIT(A) WAS RIGHT IN REJECTING THE ASSESSEE S CLAIM AND HENCE, WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND DISMISS THE GROUNDS RAISED IN THIS REGARD. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2016 SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHMA N) JUDICIAL MEMBER AC COUNTANT MEMBER HYDERABAD, DATED: 21 ST DECEMBER, 2016 KV COPY TO:- 1) SRI LAXMI NARAYAN AGARWAL, C/O. P. MURALI & CO. , CAS, 6-3-655/2/3/, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2) ACIT, CIRCLE 6 (1), HYDERABAD. 3) CIT(A) 9, HYDERABAD 4 PR. CIT - 6 HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE 5 ITA NO. 787/H/16 SRI LAXMI NARAYAN AGARWAL S.NO. DESCRIPTION DATE INTLS DS1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./ P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER