Srirami Reddy Palavala , Kadapa V. Asst. Commissioner of Income Tax, Circle-1, Kadapa

ITA 989/Hyd/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4188 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 07-03-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NARMADA
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Opportunity of being heard
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE S HRI V. DURGA RAO , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 989 / HYD/201 8 ASSESSMENT YEAR: 20 1 4 - 1 5 SRIRA M I REDDY PALAVALA , KADAPA. PAN A SQPP6319M VS. ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 1, KADAPA. APPELLANT RESPONDENT ASSESSEE BY: S HRI K.A. SAI PRASAD REVENUE BY: S MT. M. NARMADA DATE OF HEARING: 07 / 0 3 / 201 9 DATE OF PRONOUNCEMENT: 13 / 0 3 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), KURNOOL , DATED 09 /0 3 /201 7 FOR AY 20 1 4 - 1 5 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 2. GROUND NOS. 1 & 2 ARE NOT PRESSED BY THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING BEFORE US, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. 3. GROUND NO. 3 IS REGARDING ADDITION OF RS. 8,22,264/ - REPRESENTING INTEREST FROM FIXED DEPOSITS. 4. BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE, AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE AY 2014 - 15 ON 30/11/2014 ADMITTING A TOTAL INCOME OF RS. 50,45,310/ - AND I.T.A. NO. 989 /HYD/1 8 SRIRAMI REDDY PALAVALA , KADAPA 2 BANK INTEREST INCOME OF RS. 8,22,264/ - . THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 31/03/2016 BY REJECTING BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED THE INCOME @ 8% OF THE GROSS RECEIPTS (NET OF ALL ALLOWABLE EXPENSES). 5. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) UPHELD THE ESTIMATION OF THE NET PROFIT @ 8% ON GRO SS RECEIPTS MADE BY THE AO. 5.1 WITH REGARD TO INTEREST FROM BANK, THE CIT(A) OBSERVED THAT THE SAME IS NOT A PART OF CONTRACT RECEIPT BUT IS INCOME FROM OTHER SOURCES, THUS, CANNOT BE PART OF ESTIMATED INCOME. 6. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS. 8,22,264/ - REPRESENTING THE INTEREST FROM FIXED DEPOSITS, WHICH WERE DEPOSITED FOR BANK GUARANTEE, PARTICULARLY, WHEN THE BOOKS OF ACCOUNTS WERE REJECTED AND THE FIXED DEPOSIT MADE WAS ONLY FOR THE PURPOSE OF BUSINESS , THE INTEREST EARNED BY THE ASSESSEE IS PART OF THE BUSINESS ACTIVITY. 7. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS THE FIXED DEPOSITS IN THE BANK MADE BY THE ASSESSEE FOR THE PURPOSE OF BANK GUARANTEE , THERE CANNOT BE A SEPARATE ADDITION FOR THE INTEREST RECEIVED ON FIXED DEPOSITS AS PART OF BUSINESS ACTIVITIES. SINCE NO AUTHORITIES HAVE VERIFIED THE CLAIM OF THE ASSESSEE, WE REMIT THE MATTER BACK TO TH E FILE OF A O WITH A DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I.T.A. NO. 989 /HYD/1 8 SRIRAMI REDDY PALAVALA , KADAPA 3 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH , 201 9. SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH MARCH , 201 9. KV COPY FORWARDED TO: 1. SRIRAMI REDDY PALAVALA, C/O CH. PARTHASARATHY & CO., 1 - 1 - 298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST. NO. 1, ASHOKNAGAR, HYDERABAD 500 020. 2 . AC IT, CIRCLE - 1 , HYDERABAD . 3 . CIT (A) , KURNOOL 4. PR. CIT , KURNOOL 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE