D. Viswanath Reddy & Co., Kurnool V. ITO, Ward-2, Kurnool

MA 154/HYD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0824 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 11-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PHANI RAJU
• Assessee Lawyers: S RAMA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER MA NO. 154/HYD/2013 IN ITA NO. 1505/HYD/2012 ASSESSMENT YEAR 2004-05 M/S. D. VISWANATH REDDY & CO. KURNOOL; PAN: AAEPV5865C VS. THE INCOME TAX OFFICER WARD-2, KURNOOL APPELLANT RESPONDENT APPELLANT BY: SRI S. RAMA RAO RESPONDENT BY: SRI PHANI RAJU DATE OF HEARING: 20 . 09 .201 3 DATE OF PRONOUNCEMENT: 25.09.2013 O R D E R PER CHANDRA POOJARI, AM: THIS MISCELLANEOUS APPLICATION (MA) BY THE ASSESSE E IS SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL DATED 8. 1.2013 IN ITA NO. 1505/HYD/2012. 2. THE LEARNED AR SUBMITTED THAT THE ASSESSEE CAME IN APPEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER OF THE CIT(A) DATED 30.7.2012 FOR A.Y. 2004-05 IN THE CASE OF THE ASSESSEE AND RAISED THE FOLLOWING GROUNDS OF APPEAL: A) THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH O N FACTS AND IN LAW. B) THE LEARNED CIT(A) ERRED IN FINALISING THE APPEAL WITHOUT SERVING ANY NOTICE ON THE APPELLANT. THE LEARNED CIT(A) OUGHT TO HAVE PROVIDED PROPER OPPORTUNITY BEFORE AN ORDER IS PASSED BY HIM. C) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION O F THE ASSESSING OFFICER IN ESTIMATING THE INCOME AT 8% IN THE CONSEQUENTIAL ORDER PASSED WITHOUT PROVIDING ANY OT HER DEDUCTIONS. MA NO. 154/HYD/2013 M/S. D. VISWANATH REDDY & CO. ======================== 2 3. THE TRIBUNAL GIVEN ITS FINDINGS IN ITS ORDER IN PAR AS 5 AND 6 AS FOLLOWS: '5. FURTHER, RELATING TO OTHER GROUNDS, WE MAKE IT CLEAR THAT ESTIMATION OF INCOME AT 8% OF THE GROSS RECEIPTS IS JUSTIFIED IN VIEW OF THE ORDER OF THE TRIBUNAL AHMEDABAD SPEC IAL BENCH IN THE CASE OF ARIHANT BUILDERS PVT. LTD. VS. ACIT REPORTED IN 291 ITR 49 (AT) (SB) (AHD) WHEREIN THE TRIBUNAL HELD THAT ESTIMATION OF INCOME AT 8% OF TH E GROSS RECEIPTS IS JUSTIFIED. 6. FURTHER, WHILE PASSING THE CONSEQUENTIAL ORDER, THE ASSESSING OFFICER IS REQUIRED TO LIMIT HIS ACTION T O THE FINDINGS GIVEN BY THE CIT(A) IN HIS ORDER DATED 28. 2.2011. AS SUCH, THE CIT(A) IS ALSO REQUIRED TO CONFINE TO THE FINDINGS OF EARLIER ORDER OF THE CIT(A). HE CANNOT BE A JUDGE OVER THE EARLIER ORDER OF THE CIT(A).' 4. ACCORDING TO THE LEARNED AR, THE TRIBUNAL WRONGLY F OLLOWED THE ORDER OF THE SPECIAL BENCH IN THE CASE OF ARIHANT B UILDERS, DEVELOPERS AND INVESTORS P. LTD. VS. ACIT [291 ITR (AT) 49 (INDORE )(SB)] FOR APPLYING 8% INCOME ON THE TURNOVER. ACCORDING TO THE AR, THE A BOVE CASE IS NOT APPLICABLE TO THE FACTS OF THE ASSESSEE'S CASE AS T HE ASSESSEE IS NOT A BUILDER. ON THE OTHER HAND, THE ASSESSEE IS A SAND DEALER. FURTHER, THE AR SUBMITTED THAT THE TRIBUNAL WHILE SETTING ASIDE THE ISSUE TO THE FILE OF THE CIT(A) SHOULD HAVE ALLOWED THE CIT(A) TO PASS AN OR DER DE NOVO WITHOUT ANY RESTRICTION BASED ON THE EARLIER ORDER. WHEN T HE ORDER PASSED BY THE EARLIER CIT(A) IS SET ASIDE, THE SAID ORDER CANNOT AGAIN BE FOLLOWED BY THE CIT(A) WHILE PASSING A FRESH ORDER. IF THE SAME OR DER WERE TO BE PASSED THERE IS NO REQUIREMENT TO SET ASIDE THE ISSUE. TH EREFORE, THE OBSERVATIONS AT PARA 5 ARE NOT CORRECT AS THE TRIBUNAL IS REFERR ING THE CASE OF A BUILDER. AT PARA 6, THE TRIBUNAL IS DIRECTING THE CIT(A) TO CONFINE TO THE FINDINGS OF EARLIER ORDER OF THE CIT(A) WHICH IS NOT JUSTIFIED. IN VIEW OF THE ABOVE, THE AR SUBMITTED THAT ERRORS HAD CREPT IN THE ORDER OF THE TRIBUNAL AT PARA 5 AND 6 OF THE ORDER. 5. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORD ER OF THE TRIBUNAL. MA NO. 154/HYD/2013 M/S. D. VISWANATH REDDY & CO. ======================== 3 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THE ARGUMENT OF THE LEARNED AR IS TOTALLY MISCONCEI VED. THE TRIBUNAL HAD NOT GIVEN ANY FINDING IN ITS ORDER THAT THE ASSESSE E IS A BUILDER AS IN THE CASE OF ARIHANT BUILDERS, DEVELOPERS AND INVESTORS P. LTD. (CITED SUPRA). THE TRIBUNAL ONLY CONSIDERED THE ORDER OF THE TRIBU NAL SPECIAL BENCH IN THE CASE OF ARIHANT BUILDERS, DEVELOPERS AND INVES TORS P. LTD. (CITED SUPRA) AS A GUIDING FACTOR TO REJECT BOOKS OF ACCOU NT AND ESTIMATE THE INCOME OF THE ASSESSEE AT 8%. IT IS ONLY A PRECEDE NT FACTOR TO DECIDE THE ASSESSEE'S CASE. IT IS AN ADMITTED FACT THAT THE A SSESSEE'S BOOKS OF ACCOUNT WERE REJECTED BY THE AO ON REASON THAT THEY ARE NOT RELIABLE. ORIGINALLY, THE AO ESTIMATED INCOME OF THE ASSESSEE AT 10% OF T HE GROSS RECEIPTS ON EARLIER OCCASION. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) BY PLACING RELIANCE ON THE ORDE R OF THE SPECIAL BENCH (CITED SUPRA) AND ALSO ON THE JUDGEMENT OF JURISDIC TIONAL HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS (232 ITR 776), GIVEN A DIRECTION TO THE AO TO ESTIMATE THE INCOME OF THE ASSESSEE AT 8% OF THE GROSS RECEIPTS. THE AO PASSED THE GIVING EFFECT ORDER TO THE ORDER OF THE CIT(A)-IV, HYDERABAD DATED 28.2.2011 ON 23.3.2011 WHEREIN THE AO ESTIMAT ED THE INCOME AT 8% OF THE GROSS RECEIPTS. ON THE GIVING EFFECT ORDER, THE ASSESSEE FILLED AN APPEAL BEFORE THE CIT(A). THE CIT(A) VIDE ORDER DA TED 30.7.2012 CONFIRMED THE ORDER OF THE AO. AGAINST THIS, THE A SSESSEE CAME IN APPEAL BEFORE US. 7. THE TRIBUNAL VIDE ORDER DATED 8.1.2013 ADJUDICATED THE GROUNDS RAISED BY THE ASSESSEE AND REMITTED THE ISSUE TO TH E CIT(A) TO PASS A FRESH ORDER AFTER GIVING OPPORTUNITY TO THE ASSESSEE. WH ILE PASSING THE ORDER, THE TRIBUNAL ALSO MENTIONED THAT THE CIT(A) SHALL C ONFINE TO THE FINDING IN THE EARLIER ORDER OF THE CIT(A) AND HE CANNOT BE A JUDGE OVER THE EARLIER ORDER OF THE CIT(A). THIS IS A CONSCIOUS FINDING O F THIS TRIBUNAL. WHILE GIVING THIS FINDING, THIS TRIBUNAL WAS OF THE OPINI ON THAT THE ASSESSEE HAS NOT FILED APPEAL AGAINST THE EARLIER ORDER OF THE C IT(A) DATED 28.2.2011 WHICH REACHED FINALITY. HAD THE ASSESSEE HAS ANY G RIEVANCE AGAINST THAT ORDER, IT SHOULD HAVE FILED AN APPEAL AGAINST THAT ORDER OF THE CIT(A) BEFORE A HIGHER FORUM. WITHOUT FILING ANY APPEAL B EFORE A HIGHER FORUM, MA NO. 154/HYD/2013 M/S. D. VISWANATH REDDY & CO. ======================== 4 THE ASSESSEE WANTS TO CHALLENGE THE FINDINGS IN THE EARLIER ORDER OF THE CIT(A) BY CHALLENGING THE GIVING EFFECT ORDER TO TH AT ORDER WHICH IS NOT POSSIBLE. BEING SO, THE TRIBUNAL HAD GIVEN A FINDI NG IN PARA 6 OF ITS ORDER THAT THE CIT(A) SHALL CONFINE HIS FINDINGS TO THE F INDINGS OF EARLIER ORDER OF THE CIT(A). BEING SO, WE ARE OF THE OPINION THAT T HE ARGUMENT OF THE ASSESSEE'S COUNSEL IS DEVOID OF MERIT. 8. IN THE RESULT, MA FILED BY THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER, 2013. SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 25 TH SEPTEMBER, 2013 COPY FORWARDED TO: 1. M/S. D. VISWANATH REDDY & CO., C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYA'S ELEGANCE, H. NO. 3-6-643, ST . NO. 9, HIMAYATHNAGAR, HYDERABAD-500 029. 2. THE INCOME TAX OFFICER, WARD - 2, KURNOOL 3. THE CIT(A) - IV , HYDER A BAD. 4. THE CIT - III , HYDERABAD. 5. THE DR B BENCH, ITAT, HYDERABAD. TPRAO