Classic Property, Mangalore V. DCIT, Mangalore

ITA 964/BANG/2011

• Counselvise Citation: 96421114 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN THOMAS JOSE
• Keywords: Search and seizure; Document seized; Principle of natural justice; Documents seized
• Section: 143(3); 244A; 153A; 234B; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.A. NO S . 964, 965 & 974 /BANG/20 11 (ASSESSMENT YEARS : 2006-07 TO 2008-09) M/S. CLASSIC PROPERTY, 14-2-104/14, CITY LIGHT, BALMATTA ROAD, MANGALORE-575 001. PAN AAEFC 6628 A VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MANGALORE. APPELLANT RESPONDENT. APPELLANT BY : SHRI SRINIVAS KAMATH. RESPONDENT BY : SMT. SUSAN THOMAS JOSE. DATE OF HEARING : 17.12.2012. DATE OF PRONOUNCEMENT : 21.12.2012. O R D E R PER SHRI JASON P. BOAZ : THESE APPEALS BY THE ASSESS EE ARE DIRECTED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-VI, BANGALO RE DT.30.08.2011 FOR ASSESSMENT YEARS 2007-08, 2008-09 & 2006-07. SINCE COMMON ISSU ES ARE INVOLVED, THESE APPEALS ARE HEARD TOGETHER AND DISPOSED OF BY A COMMON ORDER. 2. THE FACTS OF THE CASE, IN BRIEF, ARE AS UNDER : 2.1 THE ASSESSEE, A FIRM, IS IN THE BUSINESS OF BUI LDING AND DEVELOPING OF PROPERTY. AS PER THE FACTS EMANATING FROM THE RECORD, A SEARCH A ND SEIZURE ACTION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS 'THE ACT') WAS CONDUCTED, AT THE PREMISES OF THE PARTNERS OF THE FIRM ON 13.2.2009. IN THE COURSE OF SEARCH, CERTAIN DOCUMENTS WERE FOUND AND SEIZED PERTAINING TO THE O NLY PROJECT THE FIRM WAS PROMOTING I.E. CONCORD, A RESIDENTIAL APARTMENT PROJECT. C ONSEQUENT TO THE SEARCH THE ASSESSEE 2 ITA NOS.964, 965 & 974/BANG/11 UNDER SECTION 132(4) OF THE ACT OFFERED TAXABLE INC OME OF RS.30 LAKHS IN ITS HANDS FOR ASSESSMENT YEARS 2007-08 & 2008-09 BY ADOPTING THE NET PROFIT AT 4% OF THE TURNOVER RS.7,52,64,405 ON THE CONCORD PROJECT. IN RESPO NSE TO NOTICES UNDER SECTION 153A R.W.S. 153C OF THE ACT, THE ASSESSEE FILED RETURNS OF INCO ME FOR ASSESSMENT YEAR 2007-08 AND 2008-09 ON 14.9.2010 DECLARING INCOMES OF RS.28,35 ,121 AND RS.1,72,010 RESPECTIVELY. THE INCOMES DECLARED THEREIN WERE IN ACCORDANCE WIT H THE DECLARATION MADE BY THE ASSESSEE UNDER SECTION 132(4) OF THE ACT @ 4% OF TU RNOVER. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE ASSESSEE HAD NOT GIVEN THE BASIS FOR DECLARING THE PROFIT AT 4% OF TURNOVER, PROPOSED TO ADOPT THE INCOME @ 6% OF THE GROSS TURNOVER, TO WHICH PROPOSITION THE ASSESSEE OBJECTED. THE ASSESSING OFFICER DID N OT ACCEPT THE EXPLANATION PUT FORWARD BY THE ASSESSEE AND PROCEEDED TO ESTIMATE THE NET I NCOME OF THE ASSESSEE AT 8% (AS AGAINST 6% PROPOSED BY HIM INITIALLY) OF TOTAL TURN OVER OF RS.7,52,66,405 VIZ. AT RS.60,21,312 AND ASSESSED THE SAME IN THE HANDS OF THE ASSESSEE AT RS.56,60,033 FOR ASSESSMENT YEAR 2007-08 AND RS.3,61,278 FOR ASSESSM ENT YEAR 2008-09 BY ORDERS UNDER SECTION 153C R.W.S. 143(3) OF THE ACT DT.24.12.2010 . 2.2 IN RESPECT OF ASSESSMENT YEAR 2006-07, PURSUANT TO NOTICES ISSUED UNDER SECTION 153A R.W.S. 153C OF THE ACT THE ASSESSEE FILED A RE TURN OF INCOME DECLARING NIL INCOME AND CLAIMED A REFUND OF RS.7.29,074. AFTER EXAMINA TION OF THE DETAILS FILED, THE ASSESSING OFFICER WAS OF THE VIEW THAT NO TAXABLE INCOME WAS EARNED BY THE ASSESSEE IN THE RELEVANT PERIOD AND COMPLETED THE ASSESSMENT FOR ASSESSMENT YEAR 2006-07 ACCEPTING NIL INCOME RETURNED BY THE ASSESSEE IN HIS ORDER UNDER SECTION 153C R.W.S. 143(3) OF THE ACT DT.24.12.2060. IN THE SAID ORDER OF ASSESSMENT THO UGH THE REFUND OF RS.7,29,070 WAS 3 ITA NOS.964, 965 & 974/BANG/11 DETERMINED AS PAYABLE TO THE ASSESSEE, THE ASSESSIN G OFFICER DID NOT GRANT THE ASSESSEE INTEREST UNDER SECTION 244A OF THE ACT THEREON. 3.1 AGGRIEVED BY THE ORDERS OF THE ASSESSMENT FOR A SSESSMENT YEARS 2006-07, 2007- 08 AND 2008-09 ALL DT.24.12.2010, THE ASSESSEE WENT IN APPEAL FOR ALL THREE YEARS BEFORE THE CIT(APPEALS). THE LEARNED CIT(APPEALS) DISPOSE D OFF THESE THREE APPEALS BY A COMMON ORDER DT.30.8.2011 ALLOWING THE ASSESSEE PAR TIAL RELIEF. 3.2 IN RESPECT OF THE ASSESSEE'S CLAIM IN THE APPEA L FOR ASSESSMENT YEAR 2006-07, FOR INTEREST UNDER SECTION 244A OF THE ACT, ON THE REFU ND DETERMINED AT RS.7,29,074, THE LEARNED CIT(APPEALS) HELD THAT OUT OF THE PERIOD OF 57 MONTHS FROM 31.7.2006 (VIZ. THE DUE DATE FOR FILING THE RETURN) TILL 24.12.2010 (VI Z. THE DATE OF COMPLETION OF THE ASSESSMENT) THE ASSESSEE WAS NOT ENTITLED FOR REFUN D FOR 49 MONTHS I.E. UP TO THE DATE OF FILING THE RETURN OF INCOME ON 6.9.2010 AND THEREFO RE DIRECTED THE ASSESSING OFFICER TO GRANT THE ASSESSEE INTEREST UNDER SECTION 244A FOR A PERIOD OF EIGHT MONTHS ON THE AMOUNT OF REFUND DETERMINED. 3.3 IN RESPECT OF FOR ASSESSMENT YEARS 2007-08 AND 2008-09, THE LEARNED CIT(APPEALS) HELD THAT SINCE THE ASSESSING OFFICER HAD BY LETTER DT.18.10.2010 INITIALLY PROPOSED TO ESTIMATE THE PROFIT AT 6% OF TURNOVER F OR BOTH THESE YEARS, THE ESTIMATION OF INCOME WAS SUSTAINED TO THIS EXTENT AT RS.42,45,025 FOR ASSESSMENT YEAR 2007-08 AND RS.2,70,959 FOR ASSESSMENT YEAR 2008-09. 4.0 AGGRIEVED BY THE ORDERS OF THE CIT(APPEALS) FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09 DT.30.8.2011, THE ASSESSEE IS N OW IN APPEAL BEFORE US. 4 ITA NOS.964, 965 & 974/BANG/11 ASSESSMENT YEAR 2006-07 (ITA NO.974/BANG/2011) 5.0 FOR ASSESSMENT YEAR 2006-07, THE ASSESSEE HAS R AISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE IMPUGNED ORDER UNDER SECTION 153C R.W.S. 143(3) OF THE ACT OF THE AUTHORITIES BELOW IS OPPOSED TO THE LAW AND FACTS OF THE CASE. 2. THE IMPUGNED APPEAL ORDER IS ILLEGAL, WITHOUT JURISDICTION, IS AGAINST THE PROVISIONS AND LAW /ACT AND HAS BEEN MADE IN VIOLATION OF THE PRIN CIPLES OF NATURAL JUSTICE AND EQUITY. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) ERRED IN RESTRICTING THE PAYMENT OF INTEREST UNDER SECTION 244A TO 8 MON THS ONLY. 4. THE APPELLANT CRAVES FOR LEAVE TO, ADD TO, DELE TE FROM OR AMEND THE GROUNDS OF APPEAL. 6.0 THE GROUNDS RAISED AT S.NOS.1, 2 AND 4 ARE GENERAL IN NATURE AND NO ARGUMENTS BEING URGED BY THE ASSESSEE IN THIS REGARD, NO ADJUDICATI ON IS CALLED FOR THEREON. 7.0 IN THE GROUND AT S.NO.3 , THE ASSESSEE IS AGGRIEVED BY THE CIT(APPEALS) RES TRICTING THE PAYMENT OF INTEREST UNDER SECTION 244A OF THE A CT ON REFUND OF RS.7,29,074 FOR A PERIOD OF 8 MONTHS. 7.2 WE HAVE HEARD BOTH PARTIES ON THIS MATTER AND C AREFULLY PERUSED AND CONSIDERED THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT ON FILING OF THE RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 ON 6.9.2010, THE ASSESSEE C LAIMED A REFUND OF RS.7,29,074. IT IS ALSO A MATTER OF RECORD THAT PURSUANT TO THE ORD ER OF ASSESSMENT FOR ASSESSMENT YEAR 2006-07 BEING PASSED ON 24.12.2010, THE ASSESSING O FFICER HELD THAT THE ASSESSEE WAS ENTITLED TO A REFUND OF RS.7,29,074 BUT THAT NO INT EREST UNDER SECTION 244A OF THE ACT WAS PAYABLE FOR THE STATED REASON THAT THE RETURN O F INCOME WAS NOT FILED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 139 OF THE ACT AND A LSO SINCE NO APPLICATION UNDER SECTION 119(2)(B) WAS FILED. IN APPEAL, THE LEARNED CIT(AP PEALS) HELD THAT THE ASSESSEE WAS ENTITLED FOR INTEREST UNDER SECTION 244A ON THE SAI D REFUND FOR A PERIOD OF 8 MONTHS ONLY 5 ITA NOS.964, 965 & 974/BANG/11 AND THAT NO INTEREST UNDER SECTION 244A TO BE PAID TO THE ASSESSEE FOR THE REMAINING PERIOD OF 49 MONTHS FOR WHICH PERIOD THE DELAY IS A TTRIBUTABLE TO THE ASSESSEE. IN THIS CONTEXT, IT WOULD ONLY BE APPROPRIATE TO EXTRACT AN D REPRODUCE HEREUNDER THE PROVISIONS OF SECTION 244A(2) OF THE ACT WHICH DEALS WITH THIS IS SUE : 244A(2) IF THE PROCEEDINGS RESULTING IN THE REF UND ARE DELAYED FOR REASONS ATTRIBUTABLE TO THE ASSESSEE, WHETHER WHOLLY OR IN PART, THE PERIOD OF THE DELAY SO ATTRIBUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS P AYABLE, AND WHERE ANY QUESTION ARISES AS TO THE PERIOD TO BE EXCLUDED, IT SHALL BE DECIDED B Y THE CHIEF COMMISSIONER OR COMMISSIONER WHOSE DECISION THEREON SHALL BE FINAL. IN THE LIGHT OF THE PROVISIONS OF SECTION 244A(2) O F THE ACT AND TAKING INTO ACCOUNT THE DIVERSE VIEWS OF THE ASSESSING OFFICER AND THE LEAR NED CIT(APPEALS) ON THE ALLOWABILITY OR OTHERWISE OF INTEREST UNDER SECTION 244A OF THE ACT ON THE REFUND DETERMINED AT RS.7,29,074 IN THE ASSESSEE'S CASE AND THE PERIOD F OR WHICH THE SAME IS TO BE ALLOWED, WE, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 244A, DIRECT THE ASSESSING OFFICER TO REFER THIS MATTER TO THE CHIEF COMMISSIONER OR COMMISSION ER CONCERNED WHOSE DECISION IN THE MATTER SHALL BE FINAL. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE ASSESSEE'S APPEAL FOR ASSESSM ENT YEAR 2006-07 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.964 & 965/BANG/2011 (ASSESSMENT YEARS 2007- 08 AND 2008-09) 9.0 IN IDENTICAL GROUNDS OF APPEAL RAISED FOR BOTH ASSESSMENT YEARS 2007-08 AND 2008-09, THE ASSESSEE HAS SUBMITTED THAT 1. THE IMPUGNED ORDER UNDER SECTION 153C R.W.S.14 3(3) OF THE ACT OF THE AUTHORITIES BELOW IS OPPOSED TO THE LAW AND FACTS OF THE CASE. 2. THE IMPUGNED APPEAL ORDER IS ILLEGAL, WITHOUT JURISDICTION, IS AGAINST THE PROVISIONS AND LAW /ACT AND HAS BEEN MADE IN VIOLATION OF THE PRIN CIPLES OF NATURAL JUSTICE AND EQUITY. 6 ITA NOS.964, 965 & 974/BANG/11 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) ERRED IN ESTIMATING THE NET PROFIT RATIO AT 6% AS AGAINST THE APPELLANT S CLAIM OF 4% OF TOTAL TURNOVER AS PROFIT. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) BELOW ERRED IN NOT DISPOSING OF THE ISSUE OF INTEREST UNDER SECTIONS 2 34A, 234B AND 234C EVEN THOUGH THE APPELLANT HAS RAISED THE GROUNDS DURING THE COURSE OF APPEAL PROCEEDINGS. 5. THE APPELLANT CRAVES FOR LEAVE TO, ADD TO, DELE TE FROM OR AMEND THE GROUNDS OF APPEAL. 10.0 THE GROUNDS RAISED AT S.NOS.1,2 AND 5 ARE GENERAL IN NATURE AND HAVING NOT BEEN URGED IN THE HEARINGS BEFORE US, NO ADJUDICATION IS CALLED FOR THEREON. 11.1 IN THE GROUND RAISED AT S.NO.3 , THE ASSESSEE CHALLENGES THE ACTION OF THE LEARNED CIT(APPEALS) IN ESTIMATING THE NET PROFIT RATIO AT 6% OF TOTAL TURNOVER AS AGAINST THE ASSESSEE'S DECLARATION OF 4% OF TOTAL TURNOVER AS P ROFIT. IT WAS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE, WHO WAS IN THE BUSINESS OF BUILDING AND DEVELOPING RESIDENTIAL APARTMENTS HAD ONLY ONE ON-G OING PROJECT NAMELY, CONCORD AT FALNIR, MANGALORE IN THE RELEVANT PERIOD VIZ. ASSESSMENT YEARS 2007- 08 & 2008-09. ON 13.2.2009, A SEARCH AND SEIZURE ACTION WAS CARRIED OUT AT THE PREMISES OF THE PARTNERS OF THE ASSESSEE FIRM IN THE COURSE OF WHICH CERTAIN DO CUMENTS MARKED A/AKC/12, ETC WERE FOUND AND SEIZED. PURSUANT TO THIS, THE PARTNERS O F THE ASSESSEE FIRM AFTER GOING THROUGH THE RECORDS GAVE A DECLARATION UNDER SECTION 132(4) OF THE ACT, BY LETTER DT.18.3.2009, WHEREIN THEY HAVE ADMITTED TO ADDITIONAL INCOME / N ET PROFIT OF 4% OF TOTAL TURNOVER OF RS.7,52,66,405 WHICH WORKED OUT TO RS.28,35,121 FOR ASSESSMENT YEAR 2007-08 AND RS.1,72,010 FOR ASSESSMENT YEAR 2008-09 AND FILED R ETURNS OF INCOME ACCORDINGLY. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE'S LETTER DT.18.3.2009 DULY SIGNED BY THE TWO PARTNERS, HAS BEEN REPRODUCED IN THE ORDERS OF ASSESSMENT AT PAGES 3 TO 5 THEREOF AND CLEARLY STATE THAT INSPITE OF THE FACT THAT THE SEIZED DOCUMENTS AND 7 ITA NOS.964, 965 & 974/BANG/11 OTHER RELEVANT MATERIAL EVIDENCE THAT THE LOSS INCU RRED BY THE ASSESSEE'S FIRM ON THE SAID PROJECT IN THE RELEVANT PERIOD WAS RS.13,47,341. A S THERE COULD BE OTHER EXPENDITURE, NOT ACCOUNTED FOR AND IN ORDER TO BUY PEACE AND AVOID P ROTRACTED LITIGATION THE ASSESSEE ADMITTED AND OFFERED ADDITIONAL UNDISCLOSED INCOME @ 4% ON TOTAL TURNOVER OF RS.7,52,66,405 WHICH WORKED OUT TO RS.28,30,121 AND RS.1,72,010 FOR ASSESSMENT YEARS 2007-08 & 2008-09 RESPECTIVELY. IT IS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSING OFFICER WITHOUT FINDING ANY ERR OR IN THE ASSESSEE'S DECLARATION OF INCOME, UNDER SECTION 132(4) OF THE ACT AT 4% OF TU RNOVER, MERELY STATING THAT SINCE THE DECLARATION HAD NO BASIS PROPOSED TO ESTIMATE THE I NCOME AT 6% OF TOTAL TURNOVER. INSPITE OF THIS BEING OBJECTED TO STRONGLY BY THE ASSESSEE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT, THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEE'S EXPLANATIONS AND PROCEEDED TO ESTIMATE THE INCOME AT TWICE THE ADMIT TED QUANTUM OF INCOME / PROFIT OF 8% OF TURNOVER, AS AGAINST HIS OWN PROPOSAL TO ESTIMAT E IT AT 6% AND ASSESSED THE INCOME OF THE ASSESSEE ACCORDINGLY. IN APPEAL, THE LEARNED C IT(APPEALS), IT IS SUBMITTED, DID NOT ACCEPT BOTH THE ASSESSEE'S DECLARATION UNDER SECTIO N 132(4) TO BE ASSESSED AT 4% OF TOTAL TURNOVER AND THE ASSESSING OFFICERS ESTIMATION OF INCOME AT 8% BUT RESORTED TO ESTIMATING THE ASSESSEE'S INCOME AT 6% OF TOTAL TUR NOVER. IT IS STRONGLY ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT BOTH THE AUTH ORITIES BELOW, WITHOUT FINDING ANY ERROR IN THE ASSESSEE'S DECLARATION OF INCOME, UNDE R SECTION 132(4) OF THE ACT AT 4% OF TURNOVER, HAVE ARBITRARILY RESORTED TO HIGHER ESTIM ATION OF INCOME WITHOUT BRINGING ON RECORD EVEN AN IOTA OF EVIDENCE TO ESTABLISH THAT T HE ASSESSEE HAD IN FACT EARNED INCOME AT 8% OR 6% OF TOTAL TURNOVER AS ESTIMATED BY THEM. IN THESE CIRCUMSTANCES, THE LEARNED 8 ITA NOS.964, 965 & 974/BANG/11 COUNSEL FOR THE ASSESSEE SUBMITS THAT IT IS CLEAR T HAT THE AUTHORITIES BELOW HAVE FAILED TO ESTABLISH, AS IS REQUIRED BY LAW, THAT THE ASSESSEE EARNED EVEN A SINGLE RUPEE MORE THAN WHAT IT HAD DECLARED UNDER SECTION 132(4) OF THE AC T. THERE BEING NO BASIS FOR THE LEARNED CIT(APPEALS)S ESTIMATION OF INCOME AT 6% O F TOTAL TURNOVER, IT IS PLEADED THAT THE INCOME AS DECLARED BY THE ASSESSEE AT 4% OF TOTAL T URNOVER BE ACCEPTED. 11.2 PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENT ATIVE SUPPORTED THE ORDER OF THE LEARNED CIT(APPEALS). 11.3 WE HAVE HEARD BOTH PARTIES AND HAVE PERUSED AN D CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ADMITTEDLY THE ASSESSEE FIRM IN THE REL EVANT PERIOD HAD ONLY ONE ON-GOING PROJECT FOR CONSTRUCTION / SALE OF RESIDENTIAL FLAT S VIZ. CONCORD AT FALNIR, MANGALORE. PURSUANT TO SEARCH ACTION UNDER SECTION 132 OF THE ACT AT THE PREMISES OF THE PARTNERS OF THE ASSESSEE FIRM, IT IS SEEN THAT ASSESSEE VIDE LE TTER DT.18.3.2009, SIGNED BY BOTH PARTNERS, GAVE A DECLARATION UNDER SECTION 132(4) O F THE ACT. THIS LETTER IS REPRODUCED AT PAGES 3 TO 5 OF THE ORDERS OF ASSESSMENT. IN THE S AID DECLARATION, MADE AFTER GOING THROUGH ALL THE RELEVANT MATERIAL, IT IS SEEN THAT IT IS STATED THEREIN THAT INSPITE OF INCURRING A LOSS OF RS.13,47,341 ON THE CONCORD PR OJECT, IN THE RELEVANT PERIOD, AS THERE COULD BE ADDITIONAL EXPENDITURE, ETC AND IN ORDER T O BUY PEACE WITH THE DEPARTMENT AND AVOID PROTRACTED LITIGATION, THE ASSESSEE OFFERED A DDITIONAL INCOME UNDER SECTION 132(4) OF THE ACT AT 4% OF THE TOTAL TURNOVER SPREAD OVER PRO PORTIONALLY IN ASSESSMENT YEARS 2007- 08 & 2008-09. RETURNS OF INCOME FOR THESE TWO YEAR S WERE ALSO FILED IN ACCORDANCE WITH THE DECLARATION MADE UNDER SECTION 132(4) OF THE AC T. ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT AS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE THE 9 ITA NOS.964, 965 & 974/BANG/11 ASSESSING OFFICER WITHOUT FINDING ANY ERROR IN THE ASSESSEE'S DECLARATION OF INCOME UNDER SECTION 132(4) WENT ON TO ESTIMATE THE INCOME OF TH E ASSESSEE AT 8% OF TOTAL TURNOVER, AFTER PROPOSING TO ESTIMATE THE ASSESSED INCOME AT 6% OF TOTAL TURNOVER AT PARA 4.2 ON PAGE 5 OF THE ORDER OF ASSESSMENT. WE FIND THAT TH E ASSESSEE'S ARGUMENTS / OBJECTIONS AGAINST ADOPTING THE ESTIMATION OF INCOME PROPOSED BY THE ASSESSING OFFICER WERE BRUSHED ASIDE WITHOUT ASSIGNING ANY PLAUSIBLE REASO N WHATSOEVER. THE ASSESSING OFFICER, WE FIND, HAS NOT BROUGHT ON RECORD EVEN A SINGLE SH RED OF EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAD EARNED INCOME TO THE TUNE OF 6% OR 8% OF THE TOTAL TURNOVER, AS IS WARRANTED BY LAW WHILE DETERMINING THE INCOME OF THE ASSESSEE . EVEN THE LEARNED CIT(APPEALS)S ESTIMATION OF THE ASSESSEE'S INCOME AT 6% OF THE TO TAL TURNOVER BEING BEREFT OF ANY EVIDENCE OF SUCH INCOME BEING EARNED BY THE ASSESSE E IS, IN OUR CONSIDERED OPINION, UNSUSTAINABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IN THIS VIEW OF THE MATTER, WE DELETE THE ESTIMATION OF INCOME BY THE LEARNED CIT( APPEALS) AT 6% OF TOTAL TURNOVER AND RESTORE THE INCOME OF THE ASSESSEE TO 4% OF THE TOT AL TURNOVER OF RS.7,52,66,405 VIZ. AT RS.28,35,121 FOR ASSESSMENT YEAR 2007-08 AND AT RS. 1,72,010 FOR ASSESSMENT YEAR 2008- 09 AS PER THE DECLARATION MADE UNDER SECTION 132(4) OF THE ACT BY LETTER DT.18.3.2009. IT IS ORDERED ACCORDINGLY. 12.0 IN THE GROUNDS OF APPEAL AT S.NO.4 , THE ASSESSEE HAS DENIED ITSELF LIABLE TO BE CHARGED INTEREST UNDER SECTIONS 234A, 234B & 234C O F THE ACT. THE CHARGING OF INTEREST IS CONSEQUENTIAL AND MANDATORY AND THE ASSESSING OF FICER HAS NO DISCRETION IN THE MATTER. IN VIEW OF THIS, HIS ACTION IN CHARGING THE ASSESSE E THE AFORESAID INTEREST IS HELD TO BE IN 10 ITA NOS.964, 965 & 974/BANG/11 ORDER. THE ASSESSING OFFICER IS, HOWEVER, DIRECTED TO RECOMPUTE THE INTEREST CHARGEABLE UNDER SECTIONS 234A, 234B & 234C OF THE ACT, IF ANY , WHILE GIVING EFFECT TO THIS ORDER. 13. IN THE RESULT, THE ASSESSEE'S APPEAL FOR ASSESS MENT YEARS 2007-08 & 2008-09 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DEC., 2012. SD/- SD/- (N.V. VASUDEVAN) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMB ER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, - B BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDE R SR. PRIVATE SECRETARY, ITAT, BANGALORE