Ramzan Ali Gowlani, Adilabad, Hyderabad V. Addl.CIT, Nizamabad, Nizamabad

ITA 949/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2577 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 20-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 23-06-2016
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM SMT SUMAN MALIK
• Keywords: Rejection of books of accounts; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 949/HYD/2016 ASSESSMENT YEAR: 2007-08 LATE MR. RAMZAN ALI GOWLANI, REP. BY HIS LR MR. ALISHA GAULANI, ADILABAD. PAN ABFP4410N VS. ADD.CIT, NIZAMABAD RANGE, NIZAMABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM, REVENUE BY : SMT. SUMAN MALIK DATE OF HEARING : 20-04-2017 DATE OF PRONOUNCEMENT : 28-04-2017 ORDER PER B. RAMAKOTAIAH, AM THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-5 HYDERABAD, DATED 29-03-2016 ON THE ISSUE OF ESTIMATION OF INCOME IN THE BUSINESS OF TRANSPORT CONTRACT WORKS. ASSESSEE SHRI RAMZAN ALI GOWLANI HAS SINCE DICEASED, HIS LR SHRI ALISHA GAWLANI HAS FILED REVISED FORM NO. 36 AND ACCORDINGLY THE APPEAL IS CONSIDERED IN THE NAME OF SHRI RAMZAN ALI GOWLANI REPRESENTED BY HIS LR SHRI ALISHA GAULANI. 2. BRIEFLY STATED, ASSESSEE WAS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF TRANSPORT CONTRACT WORKS. HE FILED THE RETURN OF INCOME FOR THE A.Y 2007-08 DECLARING 2 ITA NO. 949/HYD/2014 LATE MR. RAMZAN ALI G REP. BY HIS LR MR. ALISHA G, NIZAMABAD. TOTAL INCOME OF RS. 14,13,000/-. IN THE COURSE OF SCRUTINY, A.O AFTER EXAMINATION OF THE SOME OF THE BOOKS AND DOCUMENTS FURNISHED, REJECTED THE BOOKS OF ACCOUNTS AS NOT RELIABLE AND ESTIMATED THE TOTAL INCOME OF ASSESSEE AT 6% OF GROSS RECEIPTS OF RS. 4,29,05,502/- AND ARRIVED AT TOTAL INCOME AT RS. 25,74,330/-. ASSESSEE CONTESTED THE ISSUE BEFORE THE LD. CIT(A) WHO AFTER ANALYZING THE FACTS OF THE CASE AND VARIOUS COORDINATE BENCH ORDERS HAS DETERMINED THE ESTIMATION OF PROFIT AT 5% WITHOUT ANY FURTHER DEDUCTIONS. 3. ASSESSEE IN THE GROUNDS MAINLY CONTESTED THE ESTIMATION OF PROFIT AND REJECTION OF BOOKS OF ACCOUNT. HOWEVER IN THE COURSE OF PRESENT APPEAL PROCEEDINGS, LD. COUNSEL SUBMITTED THAT IN ASSESSEES OWN CASE IN EARLIER YEAR, THE ITAT HAS DIRECTED THE ESTIMATION OF INCOME AT 3%. HOWEVER IT WAS SUBMITTED THAT ASSESSEE HAS ALREADY DECLARED MORE THAN 3% OF INCOME AND THEREFORE ASSESSEE HAS NO OBJECTION IF ESTIMATION BE MADE AT 4%, AS VARIOUS COORDINATE BENCHES HAVE DETERMINED THE ESTIMATION BETWEEN 3% TO 5%, DEPENDING ON FACTS OF THE CASE. 4. LD. DR HOWEVER RELIED ON THE ORDERS OF CIT(A). 5. HAVING CONSIDERED RIVAL CONTENTIONS AND PERSUING THE DOCUMENTS AND ORDERS PLACED ON RECORD, WE ARE OF THE OPINION THAT THE INCOME CAN BE ESTIMATED AT 4% FOR THE IMPUGNED ASSESSMENT YEAR, AS IT HAS BEEN NOTICED THAT THE CLAIM OF DEPRECIATION IS VERY HIGH, WHEN COMPARED TO EARLIER YEAR. ASSESSEE HAS ALSO DECLARED NEW TRUCK BUSINESS AND THEREFORE KEEPING THESE FACTS IN MIND AND 3 ITA NO. 949/HYD/2014 LATE MR. RAMZAN ALI G REP. BY HIS LR MR. ALISHA G, NIZAMABAD. DECISIONS OF VARIOUS COORDINATE BENCHES ON ESTIMATION IN TRANSPORT BUSINESS, WE DIRECT THE A.O TO ESTIMATE THE INCOME FROM THE BUSINESS AT 4% OF THE GROSS RECEIPTS AND OTHER DEDUCTIONS AVAILABLE FROM SEC. 30 TO 38 OF THE IT ACT ARE DEEMED TO HAVE BEEN ALLOWED, WHILE ESTIMATING THE INCOME. NO SEPARATE DEDUCTION IS ALLOWABLE IN RESPECT OF OTHER CLAIMS. IT IS ALSO NOTICED THAT ASSESSEE HAS INTEREST INCOME OF RS. 14,751/- SHOWN IN THE OTHER INCOMES WHICH SHOULD BE SEPARATELY BROUGHT TO TAX AS INCOME FROM OTHER SOURCES IN ADDITION TO THE ESTIMATION OF INCOME FROM THE BUSINESS. ACCORDINGLY, ASSESSEES GROUNDS ARE CONSIDERED PARTLY ALLOWED. 6. IN THE RESULT, APPEAL FILED BY ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH APRIL, 2017. SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED:28 TH APRIL, 2017. KRK 1) LATE MR. RAMZAN ALI G, REP. BY HIS LR MR. ALISHA G C/O A.V RAGHU RAM, P. VINOD & M. NEELIMA DEVI ADV610, BABUKHAN ESTATE, BASHEERBAGH, HYD - 01 2) ADDL.CIT, NIZAMABAD RANGE, NIZAMABAD 3) CIT(A) -5, HYDERABAD 4) PR. CIT 5, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE