Chandra Shekar Gopichetty , Secunderabad V. Income Tax Officer, Ward-15(1), Hyderabad

ITA 799/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4867 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 22-01-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 01-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: TEJ PRAKASH TOSHNIWAL
• Keywords: Presumptive income; Additional evidence
• Section: 143(3); 142(1); 143(2)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A - SMC, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.799/HYD/2018 ASSESSMENT YEAR: 2014 - 15 CHANDRA SHEKAR GOPICHETTY, SECUNDERABAD. PAN: ASCPG 1036 E VS. INCOME TAX OFFICER, WARD - 15(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI TEJPRAKASH TOSHNIWAL REVENUE BY: SRI AMISHA S. GUPT, DR DATE OF HEARING: 22/01/2020 DATE OF PRONOUNCEMENT: 19 /02/2020 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 7, HYDERABAD IN APPEAL NO. 324/CIT(A) - 7/2016 - 17, DATED 24/01/2018 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE A.Y. 2014 - 15. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS APPEAL: 1. THAT THE ORDER DATED 24/01/2018 PASSED BY THE CIT(A) - 7, HYDERABAD IN CONFIRMING THE ASSESSMENT ORDER PASSED BY THE ITO, WARD - 15(1), HYDERABAD FOR THE A.Y. 2014 - 15 UNDER THE IT ACT IS CONTRARY TO LAW AGAINST THE WEIGHT OF EVIDENCE AND PROB ABILITIES OF THE CASE. 2 2. THE BASIS OF THE ITO IN ASSESSING THE DEPOSITS IN THE SAVINGS BANK ACCOUNT, TREATING IT AS SALE TURNOVER OF RS. 1,56,43,830/ - AND ESTIMATING PROFIT @ 8% IS QUITE ARBITRARY AND UNSOUND. ESTIMATION OF 8% ON BANK DEPOSITS AND WITHDR AWALS ON DIFFERENT DATES DO NOT QUALIFY THE TURNOVER. THE APPELLANT DEALS IN VEGETABLES IN WHOLESALE MARKET AND ACT AS COMMISSION AGENT ON BEHALF OF FARMERS, EFFECT SALES OF VEGETABLES AND REMIT THE ENTIRE SALE CONSIDERATION BY WAY OF CASH TO THE FARMERS. VEGETABLES ARE PERISHABLE COMMODITY AND CANNOT BE EQUATED WITH THE PERCENTAGE OF PROFIT @ 8% IS QUITE HIGHER SIDE. 3. THE ASSESSEE DEALS IN VEGETABLES CANNOT EARN @ 8% IN WHOLESALE TRADE. DEPOSITS IN THE BANK IS QUITE DISTINGUISHABLE FROM SALE TURNOVER. INGREDIENTS OF SALE HAVE NEVER BEEN ESTABLISHED ESTIMATING @ 8% WHICH IS FIXED FOR PRESUMPTIVE INCOME. THE PETITIONER H AS REPORTED INCOME FROM OUT OF THE BUSINESS OF VEGETABLES AND OFFERED THE RETURN OF INCOME AT RS. 3,25,000 VOLUNTARILY AND PAID THE TA X DUE THEREON BY CLAIMING DEDUCTIONS. 4. CHAPTER - VIA DEDUCTIONS SHOULD HAVE BEEN ALLOWED HAVING SUBMITTED THE DETAILS. INTEREST RS. 3,925/ - EARNED FROM THE BANK IS QUALIFYING DEDUCTION SHOULD NOT HAVE BEEN ADDED TO THE RETURN OF INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN WHOLESALE VEGETABLE BUSINESS, FILED HIS RETURN OF INCOME ON 02/07/2014 ADMITTING TOTAL INCOME OF RS. 2,53,000/ - AFTER CLAIMING DEDUCTIONS OF RS. 72,000/ - UNDER CHAPTER - VIA OF THE IT ACT, 1961. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICES UNDER 143(2) & 142(1) WERE SERVED ON THE ASSESSEE. DURING SCRUTINY PROCEEDINGS, IT WAS OBSERVED BY THE LD. A.O. THAT THE ASSESSEE HAS DEPOSITED CASH IN HIS BANK ACCOUNT AMO UNTING TO RS. 1,56,43,830/ - . ON QUERY BY THE LD. AO, THE ASSESSEE DID NOT OFFER ANY EXPLANATION. THEREFORE, THE LD. AO TREATED THE SAME AS THE TURNOVER OF THE ASSESSEE 3 AND ESTIMATED THE INCOME FROM WHOLESALE VEGETABLE BUSINESS @ 8% ON THE AGGREGATE AMOUNT DEPOSITED IN THE BANK ACCOUNT WHICH WORKS OUT TO RS. 12,51,506/ - . THE LD. AO ALSO MADE ADDITION OF RS. 3,925/ - WITH RESPECT TO THE INTEREST CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AS THE SAME WAS NOT DISCLOSED IN THE RETURN OF INCOME . ON APPEAL, TH E LD. CIT(A) DISMISSED THE ASSESSEES APPEAL AGREEING WITH THE VIEW TAKEN BY THE LD. A.O. 4. AT THE OUTSET, LD. AR PRODUCED THE COMMISSION REGISTER MAINTAINED BY THE ASSESSEE WHICH IS CERTIFIED BY THE AGRICULTURE MARKET COMMITTEE, BOWENPALLY, SECUNDERABAD FROM WHICH IT APPEARS THAT THE ASSESSEE EARNS ONLY 4% COMMISSION ON THE PURCHASE AND SALE OF THE AGRICULTURAL PRODUCE. THE LD. AR FURTHER SUBMITTED THAT THE SAME WAS NOT PRODUCED BEFORE THE LD. REVENUE AUTHORITIES WHICH RESULTED IN THE UNJUST ADDITION. I T WAS FURTHER SUBMITTED THAT THE ASSESSEE CARRIES ON HIS BUSINESS UNDER THE LICENSE HOLDER MR. SRI MALLIKARJUNA SWAMY AT SHOP NO. B - 45, BOWENPALLY, SECUNDERABAD. LD. AR FURTHER SUBMITTED THAT THE ASSESSEE MAY BE PERMITTED TO PRODUCE THE ADDITIONAL EVIDENCE BEFORE THE LD. AO WHICH GOES TO THE ROOT OF THE MATTER . T HEREFORE , IT WAS PLEADED , THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD. A.O. TO DECIDE THE ISSUES AFRESH ON MERITS. ON THE OTHER HAND, LD. DR 4 VEHEMENTLY OPPOSED TO THE SUBMISSIONS OF THE LD. AR AND OBJECTED TO THE SUBMISSIONS OF THE LD. AR. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON EXAMINING THE ORDERS OF THE LD. REVENUE AUTHORITIES AS WELL AS THE FACTS OF THE CASE, WE FIND THAT THE LD. REVENUE AUTHORITIES HAVE PROVIDED SUFFICIENT OPPORTUNITY TO TH E ASSESSEE TO SUBSTANTIATE HIS CLAIM, WHEREAS THE ASSESSEE HAD FAILED TO FURNISH ANY DOCUMENT ARY EVIDENCE BEFORE THE LD. REVENUE AUTHORITIES. UNDE R THESE CIRCUMSTANCES, THE LD. REVENUE AUTHORITIES HAVE REJECTED THE CLAIM MADE BY THE ASSESSEE AND THEREFORE , WE CANNOT FIND FAULT WITH THE ORDERS OF THE LD. REVENUE AUTHORITIES. HOWEVER, BEFORE US SINCE THE ASSESSEE HAS PRODUCED THE COMMISSION REGISTER MAINTAINED BY HIM WHICH IS CERTIFIED BY THE AGRICULTURE MARKET COMMITTEE, BOWENPALLY, SECUNDERABAD FROM WHICH IT APPEARS THAT THE ASSESSEE EARNS ONLY 4% COMMISSION WITH RESPECT TO HIS PURCHASE AND SALE OF VEGETABLE PRODUCE , WE ARE OF THE CONSIDERED VIEW THAT THE ENTIRE FACTS HAS TO BE REVERIFIED BY THE LD. AO IN ORDER TO AVOID MISCARRIAGE OF JUSTICE. ACCORDINGLY , IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. A.O. FOR FRESH CONSIDERATION AND WITH DIRECTION TO ADMIT AND EXAMINE ANY EVIDENCE PRODUCED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH MERITS AND LA W AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IT IS ORDERED ACCORDINGLY. 5 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 19 TH FEBRUARY, 2020. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 19 TH FEBR UARY, 2020. OKK COPY TO: - 1) CHANDRA SHEKAR GOPICHETTY C/O. TEJPRAKASH TOSHNIWAL, ADVOCATE, 4 - 1 - 6/B/4, RAMKOTE, HYDERABAD 500 095. 2) INCOME TAX OFFICER, WARD - 15(1), HYDERABAD. 3) THE CIT(A) - 7, HYDERABAD 4) THE PR. CIT - 7, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE