M/s Srinivas Pandit, Hyderabad V. Addl.CIT, Range-7, Hyderabad

MA 175/HYD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 1099 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 05-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order; Revised return
• Section: 143(3); 133A; 2

Judgement Text

IN THE INCOME TAX APPELATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE : SHRI CHANDRA POOJARI, A.M. AND SMT. ASHA VIJAYARAGHAVAN, J.M. MA. NO. 175/HYD/2013 ARISING OUT OF ITA.NO.1196/HYD/2012 ASSESSMENT YEAR 2009-2010 SRINIVAS PANDIT HYDERABAD PAN ADFPP2127B VS. ADDL. CIT, HYDERABAD (APPLICANT) (RESPONDENT) FOR APPLICANT : SHRI S. RAMA RAO (A.R.) FOR RESPONDENT : SHRI R. LAXMAN (D.R.) DATE OF HEARING : 11.10.2013 DATE OF PRONOUNCEMENT : 22.11.2013 ORDER PER SMT. ASHA VIJAYARAGHAVAN, J.M. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE SEEKING FOR RECTIFICATION OF THE ORDER OF THE TRIBUNAL DATED 31.01.2013 IN ITA.NO.1196/HYD/2012 UNDER SECTION 254(2) OF THE I.T. ACT, 1961. 2. BRIEF FACTS RELATING TO THE PRESENT MISCELLANEOU S PETITION ARE THAT THE ASSESSEE HEREIN IS AN INDIVID UAL CARRYING ON TRANSPORT ACTIVITY. FOR THE ASSESSMENT YEAR 2009-10, THE ASSESSEE FILED THE RETURN OF INCOME ON 30/09/2009 ADMITTING AN INCOME OF RS.38,42,330/-. LATER THE INCOME-TAX AUTHORITIES CONDUCTED SURVEY 2 UNDER SECTION 133A OF THE I.T. ACT ON 13-09-2010. A T THE TIME OF SURVEY THE ASSESSEE ADMITTED AN ADDITIO NAL INCOME OF RS.30,00,000/- UNDER THE HEAD 'BUSINESS' ON THE GROUND THAT IT WOULD COVER ANY DEFICIENCIES IN THE BOOKS. ACCORDINGLY A REVISED RETURN OF INCOME WAS F ILED ON 29-11-2010 ADMITTING AN INCOME OF RS.68,42,330/- WHICH INCLUDES THE ADDITIONAL INCOME OFFERED OF RS.30,00,000/- AT THE TIME OF SURVEY. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) ON 30/12/2011. THE ASSESSING OFFICER REJECTED THE BOOK S OF ACCOUNT AND RESORTED TO ESTIMATION OF INCOME AT 5% ON A TURNOVER OF RS.20,53,51,656/- ARRIVED AT. THE ASSESSING OFFICER IGNORED THE INCOME ADMITTING IN T HE REVISED RETURN OF INCOME OF RS.68,42,330/- AND ARRI VED AT THE PROFIT/GAIN FROM THE BUSINESS AT RS.1,02,67,582/- BEING 5% OF THE TURNOVER. THE ASSESSING OFFICER DID NOT ADD THE ADDITIONAL INCOME OFFERED. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT(A)-VI, HYDERABAD. BEFORE THE LEARNED CIT(A), TH E ASSESSEE CONTENDED THAT THE TURN OVER ARRIVED AT RS.20,53,51,656/- WAS NOT CORRECT AND ALSO CONTESTE D THE REJECTION OF BOOKS OF ACCOUNT AND ESTIMATION OF NET INCOME AT 5%. THE LEARNED CIT (A) VIDE ORDER DATED 25/05/2012 ACCEPTED THAT THERE IS A MISTAKE IN THE TURN OVER ARRIVED AT RS.20,53,51,656/- AND OBSERVED THAT THE TURNOVER WOULD BE RS.14,19,43,629/ -. THE LEARNED CIT (A) CONFIRMED THE ACTION OF THE ASSESSI NG OFFICER IN REJECTING THE BOOKS OF ACCOUNT AND ALSO IN 3 ESTIMATION OF INCOME AT 5% ON THE TURNOVER OF RS.14,19,43,629/-. HOWEVER, THE LEARNED CIT (A) WAS OF THE VIEW THAT THE ADDITIONAL INCOME OF RS.30 LAKHS ADMITTED IN THE REVISED RETURN OF INCOME AND COMMISSION OF RS.4,59,145/- IS TO BE SEPARATELY ADD ED. 4. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE TRIBUNAL BEING ITA.NO.1196/HYD/2012 AND THE TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE BY OR DER DATED 31.01.2013. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S. RAMA RAO, SUBMITTED BEFORE US THAT AT PARA 11 OF TH E ORDER, THE TRIBUNAL APPEARS TO HAVE ENTERTAINED A V IEW THAT THE BUSINESS OF THE PETITIONER IS LORRY FREIGH T AND THAT THE ADDITIONAL INCOME ADMITTED DOES NOT FORM P ART OF SUCH INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S.RAMA RAO DRAWN OUR ATTENTION TO THE ORDER OF THE TRIBUNAL DATED 31.01.2013 AND SUBMITTED THAT TH E TRIBUNAL IN ITS ORDER ACCEPTED THAT THE ESTIMATION OF NET PROFIT PERTAINS TO THE ASSESSEES BUSINESS OF LORRY FREIGHT. THE ADDITIONAL INCOME OFFERED OF RS.30,00,000/- WAS ADMITTED TO COVER UP ANY DEFICIENCIES WHICH MAY ARISE IN THE ACCOUNTS OF THE BUSINESS CARRIED ON BY THE ASSESSEE. THEREFORE, THE ADDITIONAL INCOME OF RS.30 LAKHS RELATE TO THE BUSI NESS OF LORRY FREIGHT AND DOES NOT RELATE TO ANY OTHER A CTIVITY. THEREFORE, THE ADDITIONAL INCOME OF RS.30 LAKHS FOR MS PART OF THE INCOME FROM LORRY FREIGHT CHARGES ADMIT TED IN THE REVISED RETURN OF INCOME FILED. IT IS ALSO 4 SUBMITTED THAT THE ASSESSING OFFICER, AT THE TIME O F COMPLETION OF THE ASSESSMENT PROCEEDINGS RESORTED T O ESTIMATION OF INCOME AT 5% ON THE TURN OVER ARRIVED AT BY THE ASSESSING OFFICER. THE ASSESSING OFFICER DID NOT MAKE ADDITION OF THE ADDITIONAL INCOME OFFERED OF R S.30 LAKHS AS - A) THE SAID AMOUNT FORMS PART OF THE INCOME FROM BUSINESS OF LORRY FREIGHT. ONCE THE INCOME THE INCOME FROM LORRY FREIGHT CHARGES IS ESTIMATED AT 5% OF THE TURN OVER DETERMINED BY THE AUTHORITIES, NO OTHER INCOME COULD BE ADDED TO THE SAID ESTIMATED INCOME. B) THE AMOUNT OF RS.4,59,145/- ALSO REPRESENTS THE COMMISSION FROM LORRY FREIGHT BUSINESS ONLY. C) IT IS EXPLAINED CLEARLY THAT SUCH COMMISSION REPRESENTS THE AMOUNT DERIVED IN THE PROCESS OF ARRANGING LORRIES. THE ASSESSEE IS ALSO ENGAGED IN ARRANGING LORRIES IN WHICH CASE THE AMOUNT OF LORRY FREIGHT WAS DIRECTLY PAID TO THE LORRY OWNERS/DRIVERS AND PERCENTAGE OF COMMISSION IS PAID TO THE ASSESSEE. THIS AMOUNT IS ALSO AN INTEGRAL PART OF THE SAME BUSINESS ACTIVITY. WHEN THE TOTAL TURN OVER IS TAKEN INTO CONSIDERATION AND AN ESTIMATION IS RESORTED TO, THE SAID AMOUNT SHOULD NOT AGAIN BE ADDED TO THE INCOME ADMITTED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S. RAMA RAO BY THIS MISCELLANEOUS APPLICATION HAS SOUGHT FOR RECTIFICATION OF ORDER DATED 31.01.2013 IN ITA.NO.1196/HYD/2012. 5 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED A.R. CONTENTION IS THAT IN THE CASE OF ESTIMATION OF INC OME NO OTHER ADDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE SO ESTIMATED. TO THIS CONTENTION OF THE ASSESSEES COUNSEL, WE HAVE NO DISPUTE. IN THE PRES ENT CASE, THERE ARE TWO ISSUES INVOLVED IN DETERMINING THE INCOME OF THE ASSESSEE. FIRST ONE IS, ESTIMATION OF INCOME AT 5% AS THE RATE OF NET PROFIT DECLARED BY THE ASSESSEE IS VERY LOW. ON THIS REASON, THE CIT(A) ESTIMATED THE INCOME OF THE ASSESSEE ON THE BASIS O F PAST RECORDS AT 5% OF THE TURNOVER WORKED OUT TO RS.14,19,43,629/-. SECONDLY, THERE WAS A DISCREPANC Y IN THE TURNOVER DECLARED BY THE ASSESSEE. ON THIS COUNT, TO COVER-UP THE DEFICIENCIES WHICH MAY ARISE ON ACCOUNT OF DIFFERENCE IN TURNOVER THE ASSESSEE ITSE LF HAS OFFERED RS.30 LAKHS FOR THIS ASSESSMENT YEAR AS ADDITIONAL INCOME. THIS WAS NOT CONSIDERED BY THE ASSESSING OFFICER WHILE ESTIMATING THE INCOME OF TH E ASSESSEE. BEING SO, THE CIT(A) BY VIRTUE OF THE CO- TERMINUS POWERS VESTED WITH HIM, DIRECTED THE ASSESSING OFFICER TO MAKE A SEPARATE ADDITION OF RS . 30 LAKHS AS ADMITTED BY THE ASSESSEE IN THE REVISED RE TURN OF INCOME. THE LEARNED A.R. BY WAY OF MISCELLANEOUS APPLICATION TRIED TO CONVINCE THE BENCH THAT THERE IS ONLY ONE DISCREPANCY I.E., DECLARING LOW RATE OF PR OFIT AND THE LEARNED A.R. IS NOT AGREEING WITH THE FINDI NG OF THE CIT(A) THAT THERE IS A DISCREPANCY IN THE TURNO VER ALSO WHICH WAS ADMITTED BY THE ASSESSEE DURING THE 6 COURSE OF SURVEY AND OFFERED ADDITIONAL INCOME OF R S. 75 LAKHS, OUT OF THIS, RS.30 LAKHS FOR THE ASSESSME NT YEAR UNDER CONSIDERATION. BEING SO, THE CIT(A) JUST IFIED IN DIRECTING THE ASSESSING OFFICER TO MAKE SEPARATE ADDITION OF RS.30 LAKHS TOWARDS SUPPRESSED TURNOVER AFTER DIRECTING THE ASSESSING OFFICER TO CONSIDER T HE TURNOVER AT RS.14,19,43,629/- INSTEAD OF RS.20,53,51,656/- CONSIDERED BY THE ASSESSING OFFIC ER IN HIS ASSESSMENT ORDER. ACCORDINGLY, WE DO NOT FIN D ANY MERIT IN THE PLEA OF THE ASSESSEES COUNSEL THA T ADDITION OF RS.30 LAKHS IS UNWARRANTED. THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, M.A. OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.11.2013 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAV AN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 22 ND NOVEMBER, 2013 VBP/- COPY TO 1. SRINIVAS PANDIT, C/O. S. RAMA RAO, ADVOCATE, FLA T NO.102, SHRIYAS ELEGANCE, ROAD NO.9, HIMAYATNAGAR, HYD ERABAD 29. 2. ADDL. CIT, RANGE-7, HYDERABAD. 3. CIT(A)-VI, HYDERABAD. 4. CIT-VI, HYDERABAD 5. DR A BENCH, ITAT, HYDERABAD.