Lal Construction Company , Secunderabad V. Dy. Commissioner of Income Tax , Circle-10(1), Hyderabad

ITA 980/Hyd/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4690 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2016-2017
• Appeal Filed On: 11-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; FORM 26AS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.A. NO. 980/HYD/2019 ASSESSMENT YEAR: 2016-17 LAL CONSTRUCTION COMPANY, SECUNDERABAD [PAN: AAAFL8349R] VS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-10(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S.RAMA RAO, AR FOR REVENUE : SHRI K.N.SURESH BABU, DR DATE OF HEARING : 12-10-2020 DATE OF PRONOUNCEMENT : 12-10-2020 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS ASSESSEES APPEAL FOR THE AY.2016-17, DIRECT ED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)6, HYDERABAD, DATED 29-03-2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-FIRM F ILED ITS RETURN OF INCOME FOR THE AY.2016-17 ON 20-09-2016, AD MITTING TOTAL INCOME OF RS.13,04,910/-. DURING THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE OF THE INCOME TAX ACT [A CT], THE ASSESSING OFFICER (AO) NOTICED THAT THERE IS A DIFFEREN CE BETWEEN THE TOTAL RECEIPTS OFFERED TO TAX BY THE ASSESSEE AND ITA NO. 980/HYD/2019 :- 2 -: THE RECEIPTS REFLECTED IN FORM-26AS. THE AO AFTER HEA RING THE ASSESSEE, CONSIDERED THE TURNOVER AS PER FORM-26AS A S THE GROSS RECEIPTS OF THE ASSESSEE AND ESTIMATED THE NET PRO FIT @8% OF SUCH TURNOVER AND BROUGHT IT TO TAX. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO HAS ENHANCED THE INCOME OF THE ASSESSEE. HOWEVER, IT IS THE CASE OF THE ASSESSEE THAT BEFORE ENHANCEMENT OF THE INCOME, THE CIT(A) HAS NOT GIVEN ANY NOTICE TO THE ASSES SEE. ACCORDINGLY, THE ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS: 1) THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ENHANCING. THE INCOME BY AN AMOUNT OF RS.24,26,668/ - WITHOUT PROVIDING OPPORTUNITY TO THE APPELLANT AND WITHOUT ISSUING SHOW CAUSE NOTICE. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN REJECTING THE ACCOUNTS DRAWN BY THE APPELLANT. 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT THE TOTAL SALES AND THE OT HER OPERATING REVENUES AMOUNTED TO RS.33,87,552/- 5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE RECONCILIATION MADE BETWEEN THE FIGU RES OBTAINED IN FORM 26AS AND THE TURN OVER ADMITTED IN THE PROFIT AND LOSS ACCOUNT AND OUGHT TO HAVE HELD THAT NO ADDITION CAN BE MADE . 6) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE DIFFERENCE IS ON ACCOUNT OF THE ADMIS SION OF INCOME FOR THE ASSESSMENT YEAR 2015-16 AND, THEREFORE, OUGHT T O HAVE HELD THAT NO ADDITION ON ACCOUNT OF DIFFERENCE IS TAXABLE. 7) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT THE TURNOVER SHOWN IN FORM NO.26AS OF RS.81,36,140/- WAS DULY RECONCILED BY THE APPELLANT , BY SHOWING THAT OUT OF THE SAID AMOUNT RS.52,00,000/- WAS ALRE ADY ASSESSED TO TAX FOR THE ASSESSMENT YEAR 2015-16. ITA NO. 980/HYD/2019 :- 3 -: 8) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE DIFFERENCE OF RS.52,00,000/- IS TAXABLE IN ITS ENTIRETY AND FURTHER ERRED IN ENHANCING THE INCOME. 9) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT CONSIDERING THE GROUND NOS. 2,3 AND 4 OF THE GROUND S OF APPEAL AGITATED BEFORE HIM. 10) ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING. 4. THE CASE IS TAKEN UP FOR HEARING ON 12-10-2020 THR OUGH VIDEO CONFERENCING AND BOTH THE PARTIES WERE HEARD. 5. ON GOING THROUGH THE ORDER OF THE CIT(A), WE FIND THAT AT PARA 6.29 OF HIS ORDER, THE CIT(A) HAS MENTIONED THAT TH E FACTUAL POSITION NOTICED BY HIM WHICH REQUIRED ENHANCE MENT OF INCOME WAS BROUGHT TO THE NOTICE OF AR AND IT WAS PR OPOSED TO ENHANCE THE ASSESSMENT AND IN RESPONSE THERETO, THE ASSESSEE REITERATED THE ARGUMENT THAT THE SAID AMOUNT WAS ALREADY DECLARED AS WORK-IN-PROGRESS IN THE EARLI ER FY.2014- 15. FROM THESE RECORDINGS IN THE CIT(A)S ORDER, IT IS CLEAR THAT THE CIT(A) HAS NOT GIVEN ANY NOTICE IN WRITING FOR ENH ANCEMENT OF INCOME TO THE ASSESSEE. 6. LD.DR ALSO CONFIRMED THAT NO WRITTEN NOTICE WAS GIVE N TO THE ASSESSEE. 7. TAKING THE SAME INTO CONSIDERATION, WE DEEM IT FIT AN D PROPER TO REMIT THE ISSUE TO THE FILE OF CIT(A) FOR RE- CONSIDERATION OF THE ISSUE IN ACCORDANCE WITH LAW AND IF THE CIT(A) FEELS THAT THE ASSESSMENT HAS TO BE ENHANCED, T HEN, HE SHALL ISSUE A NOTICE TO THE ASSESSEE AND AFTER CONSIDER ING THE ASSESSEES OBJECTIONS, IF ANY, FILED BY THE ASSESSEE IN WRITING, ITA NO. 980/HYD/2019 :- 4 -: THEREAFTER ONLY, THE CIT(A) SHALL ADJUDICATE THE APPEA L. NEEDLESS TO MENTION THAT ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARING. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER, 2020 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 12-10-2020 TNMM ITA NO. 980/HYD/2019 :- 5 -: COPY TO : 1.LAL CONSTRUCTION COMPANY, PLOT NOS.3 & 4, WEST MARREDPALLY, JAMNAKUNJ, SECUNDERABAD. 2.THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-10( 1 ), HYDERABAD. 3.CIT(APPEALS)-6, HYDERABAD. 4.PR.CIT-6, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.