DCIT, Circle-1(1), Hyd, Hyderabad V. AP Tourism Development Corporation Ltd., Hyd, Hyderabad

ITA 917/HYD/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7313 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: S RAMA RAO
• Keywords: Depreciation; Revised return
• Section: 115JB; 201; 139(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI C.N. PRASAD , JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 957 /HYD/20 16 ASSESSMENT YEAR: 20 1 1 - 1 2 (THROUGH VIDEO CONFERENCE) ANDHRA PRADESH TOURISM DEVELOPMENT CORPORATION LTD., HYDERABAD. PAN A ADCA 9817 H VS. DY . COMMISSIONER OF INCOME - TAX, CIRCLE 1 (1), HYDERABAD. ( APPELLANT ) (RESPONDENT) ITA NO. 917 /HYD/20 16 ASSESSMENT YEAR: 201 1 - 12 (THROUGH VIDEO CONFERENCE) DY. COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), HYDERABAD. VS. ANDHRA PRADESH TOURISM DEVELOPMENT CORPORATION LTD., HYDERABAD. PAN AADCA 9817 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : S HRI YVST SAI DATE OF HEARING : 0 1 / 0 9 /20 20 DATE OF PRONOUNCEMENT : 03 / 09 / 20 20 O R D E R PER M. BALAGANESH , A .M. : BOTH T H E S E APPEAL S ARE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS REVENUE ARE DIRECTED AGAINST THE ORDER OF CIT(A) 1 , DATED 2 3 / 0 3 /20 16 , HYDERABAD FOR AY 20 11 - 1 2 . 2. THE ONLY ISSUE TO BE DECIDED IN THE APPEAL OF THE ASSESSEE IS WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ESTIMATING THE INCOME OF THE 2 ITA NO S . 957 & 916 /HYD/ 20 16 AP TOURISM DEVELOPMENT CORPORATION LTD., HYD. ASSESSEE @ 25% OF GROSS RECEIPTS AFTER REJECTION OF BOOKS OF ACCOUNT. WHILE, THE INTERCONNECTED ISSUE INVOLVED IN THE REVENUE S APPEAL IS WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO GRANT DEDUCTION TOWARDS DEPRECIATION AND FINANCIAL CHARGES WHEN INCOME WAS ESTIMATED @ 25% OF GROSS RECEIPTS. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECO RD. WE FIND THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TOURISM AND HAD FILED ITS RETURN OF INCOME FOR AY 2011 - 12 ON 30/09/2011 (ON THE DUE DATE) ADMITTING THE INCOME OF RS. 66,82,010/ - UNDER THE NORMAL PROVISIONS OF THE ACT AND RS. 2,09,72,240 / - U/S 115JB OF THE ACT. LATER, THE ASSESSEE FILED ITS REVISED RETURN OF INCOME ON 31/03/2013 DECLARING TOTAL INCOME OF RS. 15,33,140/ - UNDER NORMAL PROVISIONS OF THE ACT AND RS. 2,68,26,857/ - U/S 115JB OF THE ACT. BOTH THESE RETURNS WERE ADMITTEDLY FILED WITHOUT COMPLETION OF STATUTORY AUDIT OF THE ASSESSEE COMPANY. LATER, THE ASSESSEE COMPANY COMPLETED ITS STATUTORY AUDIT ON 11/02/2014 AND FILED REVISED COMPUTATION OF INCOME BEFORE THE LD. AO, WHICH WAS NOT CONSIDERED BY THE LD. AO. THE LD. AO OBSERVED TH AT THERE WAS THREE DIFFERENT FIGURES OF GROSS RECEIPTS, WHICH ARE AS UNDER: GROSS RECEIPTS AS PER ORIGINAL RETURN RS. 119,54,33,271 GROSS RECEIPTS AS PER REVISED RETURN RS. 120,55,15,709 AS PER AUDIT REPORT RS. 122,98,96,653 THE LD. AO OBSERVED TH AT SINCE THREE DIFFERENT TURNOVER FIGURES WERE REFLECTED BY THE ASSESSEE, IN THE INTEREST OF REVENUE, HIGHEST TURNOVER FIGURE SHOULD BE CONSIDERED AND ACCORDINGLY COMPUTED THE ESTIMATED INCOME OF THE ASSESSEE @ 25% OF SUCH TURNOVER AND COMPLETED THE ASSESS MENT U/S 144 OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 30,74,74,163/ - . 3.1 IN THE FIRST APPEAL, THE ASSESSEE REQUESTED THE LD. CIT(A) TO CONSIDER THE PROFITS DECLARED AS PER THE AUDIT REPORT DATED 3 ITA NO S . 957 & 916 /HYD/ 20 16 AP TOURISM DEVELOPMENT CORPORATION LTD., HYD. 11/02/2014. AFTER OBTAINING THE REMAND REPORT FROM T HE LD. AO, THE LD. CIT(A) UPHELD THE ACTION OF THE LD. AO IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATING THE INCOME @ 25% OF THE GROSS RECEIPTS . HOWEVER, HE DIRECTED THE LD. AO THAT ASSESSEE SHOULD BE ENTITLED FOR DEDUCTION TOWARDS INTERE ST AND BANK CHARGES OF RS. 76,53,045/ - AND DEPRECIATION OF RS. 12,86,12,826/ - FROM THE ESTIMATED INCOME AS DETERMINED (SUPRA). 3.2 IT IS NOT IN DISPUTE THAT BOTH THE ORIGINAL AND REVISED RETURNS OF INCOME WERE FILED BY THE ASSESSEE WITHOUT COMPLETION OF STATUTORY AUDIT OF THE ASSESSEE COMPANY AND THAT THE FIGURES MENTIONED THEREON WERE PROVISIONAL. IT IS NOT IN DISPUTE THAT THE STATUTORY AUDIT OF THE ASSESSEE COMPANY WAS COMPLETED ON 11/02/2014. WE FIND THAT THE AUDITED BOOKS WERE INDEED FURNISHED BEFORE THE LOWER AUTHORITIES, WHICH WERE IGNORED ON THE PRETEXT THAT THE AUDIT OUGHT TO HAVE BEEN COMPLETED ON OR BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT . FOR FAILURE TO GET THE ACCOUNTS AUDITED, THE LEGISLATURE PROVIDES FOR SEPARATE PENAL PROVISIONS IN TERMS OF SECTION 271 B OF THE ACT. WHEN THE AUDITED BOOKS OF ACCOUNT WERE FURNISHED BEFORE THE LOWER AUTHORITIES, THE SAID BOOKS CANNOT BE IGNORED WITHOUT ASSIGNING ANY REASONS AND GETTING REJECTED AND ASSESSEES INCOME DETERMINED ON AN ESTIMATE BASIS. 3.3 THE LD. AR BEFORE US PRAYED FOR REMANDING THESE APPEALS TO THE FILE OF THE LD. AO FOR DENOVO ADJUDICATION FOR DETERMINATION OF TOTAL INCOME OF THE ASSESSEE BASED ON THE AUDITED BOOKS OF ACCOUNT. LD. DR FAIRLY AGREED FOR THE SUBMISSION OF THE LD. AR. HENCE , WE DEEM IT FIT AND PROPER TO REMAND THESE APPEALS TO THE FILE OF LD. AO FOR DE - NOVO ADJUDICATION FOR DETERMINATION OF TOTAL INCOME OF THE ASSESSEE BASED ON THE AUDITED BOOKS OF ACCOUNTS IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE AS WELL AS REVENUE 4 ITA NO S . 957 & 916 /HYD/ 20 16 AP TOURISM DEVELOPMENT CORPORATION LTD., HYD. IN THEIR RESPECTIVE APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE AS WELL AS REVENUE ARE ALLOWED FOR ST ATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 3RD SEPTEMBER , 20 20 . SD/ - SD/ - ( C.N. PRASAD ) ( M. BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 3 RD SEPTEMBER , 20 20 KV C O P Y TO: - 1) ANDHRA PRADESH TOURISM DEVELOPMENT CORPORATION LTD., C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3 - 6 - 643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD 500 029. 2) D CIT, CIRCLE 1 (1), AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3) CIT(A) 1, HYDERABAD. 4) PR. CIT - 1 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE 5 ITA NO S . 957 & 916 /HYD/ 20 16 AP TOURISM DEVELOPMENT CORPORATION LTD., HYD. S.NO DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BE FORE AUTHO R SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFO RE T HE SECOND ME MBER JM/AM 4 DRAFT DISCUSSED/APPROVE D BY SECOND MEM BER JM/AM 5 APPROVED DRAF T COMES TO THE S R.P.S./PS SR.P.S./P.S 6. KEPT FO R PRONOUNCEME NT ON SR. P.S./P.S . 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GO ES TO TH E HEAD CLE RK 9 DATE OF DISPATCH OF ORD ER