Siva Sai Constructions & Real Estates, Sathupally, Hyderabad V. ITO, Ward-2, Khammam, Khammam

ITA 850/HYD/2015

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7382 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 24-08-2020
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: A V RAGHURAM
• Section: 143(3); 143(1); 271B; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 850/HYD/2015 ASSESSMENT YEAR: 2007 - 08 M/S. SIVA SAI CONSTRUCTIONS & REAL ESTATES, SATHUPALLY. PAN: ABFFS 9689 F VS. INCOME TAX OFFICER, WARD - 2, KHAMMAM. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY: SRI Y.V.S.T. SAI, CIT - DR DATE OF HEARING: 24/08/2020 DATE OF PRONOUNCEMENT: 2 5 /08/2020 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT, VIJAYAWADA, DATED 21/3/2012 PASSED U/S. 263 R.W.S 143(3) OF THE ACT FOR THE AY 2007 - 08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT, VIJAYAWADA PASSED U/S. 263 OF THE ACT IS ERRONEOUS, ILLEGAL AND UNSUSTAINABLE IN LAW. 2. THE CIT, VIJAYAWADA ERRED IN EXERCISING JURISDICTION U/S. 263 OF THE IT ACT AS THE AO IN THE S CRUTINY ASSESSMENT AFTER VERIFICATION HAS COMPLETED THE ASSESSMENT DETERMINING THE TOTAL INCOME AT RS. 44,380/ - . 2 3. THE CIT, VIJAYAWADA FAILED TO APPRECIATE THAT ALL THAT HE WAS DOING IS REPLACING HIS OPINION FOR THAT OF THE AO, WHICH IS IMPERMISSIBLE IN L AW. 4. THE CIT, VIJAYAWADA ERRED IN CONSIDERING THE GROSS RECEIPTS AT RS. 3.14 CRS MUCH AGAINST THE SUBMISSION OF THE APPELLANT THAT IT HAD RECEIVED ONLY COMMISSION AT THE RATE OF RS. 20,000/ - PER FLAT CONSTRUCTED. 5. THE CIT, VIJAYAWADA ERRED IN DIRECTING THE AO TO DETERMINE THE APPELLANTS INCOME EITHER BY CONSIDERING THE GROSS RECEIPTS AT RS. 3.14 CRS AND WORKING OUT THE INCOME OR BY ESTIMATING THE INCOME AT 12.5%, WHICHEVER IS HIGHER. 6. W ITHOUT PREJUDICE TO THE ABOVE, THE DIRECTION OF THE CIT, VIJAYAWA DA TO ESTIMATE THE INCOME EVEN AT 12.5% OF THE SO CALLED GROSS RECEIPTS AT RS. 3.14 CRS IS ON THE HIGHER END. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM CONSISTING OF FIVE PARTNERS CARRYING ON THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL H OUSES, FILED HIS RETURN OF INCOME FOR THE AY 2007 - 08 ON 18/3/2008 ADMITTING TAXABLE INCOME OF RS. 14,380/ - . INITIALLY, THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT AND THEREAFTER THE CASE WAS TAKEN UP FOR SCRUTINY AND FINALLY THE ASSESSMENT WAS COMPLETE D ON 22/ 12/2009 WHEREIN THE LD. AO MADE ADDITIONS TOWARDS UNDERSTATING OF RECEIPTS FOR RS. 6,000/ - AND TOWARDS TRAVELLING AND OFFICE MAINTENANCE FOR RS. 25,000/ - FOR WANT OF VOUCHERS. SUBSEQUENTLY, THE LD. CIT INITIATED PROCEEDING U/S. 263 OF THE ACT AND R EMITTED THE MATTER BACK TO THE FILE OF THE LD. AO DIRECTING HIM TO ENHANCE THE INCOME OF THE ASSESSEE AND WITH FURTHER DIRECTION FOR INITIATING PENALTY PROCEEDINGS U/S. 271B OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT THE ASSESSEE IS IN APPEAL BEFOR E US. 4 . AT THE OUTSET, W E FIND THAT THE LD. CIT HAS PASSED AN EX PARTE ORDER BECAUSE THE ASSESSEE HAD FAILED TO APPEAR BEFORE THE LD. CIT IN 3 HIS PROCEEDINGS. THE LD. CIT HAD PASSED THE EX PARTE ORDER BECAUSE OF THE FOLLOWING REASONS. T HE SHOW - CAUSE NOTICE ISSUED TO THE ASSESSEE DATED 8/09/2011 WAS RETURNED UNSERVED BY THE POSTAL AUTHORITIES. SINCE THE ASSESSEE FIRM WAS UNAVAILABLE IN THE ADDRESS COMMUNICATED TO THE REVENUE , THE NOTICE WAS SERVED ON THE FIVE PARTNERS OF THE ASSESSEE AMONGST WHICH WITH RESPECT OF TWO PARTNERS THE NOTICES WERE SERVED BY WAY OF AFFIXTURE IN THE PRESENCE OF TWO WITNESS. SUBSEQUENT LY , THE APPEAL WAS HEARD EX PARTE. FROM THESE FACTS IT APPEARS THAT THE ASSESSEE WAS NOT INTERESTED IN CO - OPERATING WITH THE LD. CIT IN HIS PROCEEDINGS. HOWEVER, SINCE THE ASSESSEE HAS RAISED SEVERAL GROUNDS BEFORE US WHICH WERE NOT RAISED BEFORE THE LD. CIT, W E ARE OF THE CONSIDERED VIEW THAT ONE MORE OPPORTUNITY SHOULD BE PROVIDED TO THE ASSESSEE TO ARGUE T HE CASE BEFORE THE LD. CIT. THEREFORE, IN THE INTEREST OF JUSTICE WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. CIT FOR DE - NOVO CONSIDERATION. THE ASSESSEE IS ALSO HEREBY DIRECTED TO CO - OPERATE BEFORE THE LD.REVENUE AUTHORITIES IN THEIR PROCEEDING S FAILING WHICH THE LD.REVENUE AUTHORITIES SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDERS IN ACCORDANCE WITH MERIT AND LAW BASED ON THE MATERIALS ON RECORD. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 PRONOUNCED IN THE OPEN COURT ON 2 5 TH AUGUST, 2020. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 2 5 TH AUGUST, 2020. OKK COPY TO: - 1. M/S. SIVA SAI CONSTRUCTIONS & REAL ESTATES, C/O. A.V. RAGHURAM, P. VINOD, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. INCOME TAX OFFICER, WARD - 2, KHAMMAM. 3. THE COMMISSIONER OF INCOME TAX, VIJAYAWADA. 4. ADDL. CIT, KHAMMAM RANGE, KHAMMA M. 5. THE DR, ITAT, HYDERABAD. 6. GUARD FILE.