M/s. Bhoopalam Marketing Services Private Limited, Shimoga V. Assistant Commissioner Of Income Tax, Circle-1, Shimgoa

MA 64/BANG/2023

AI Insights

The case involves M/s. Bhoopalam Marketing Services Pvt. Ltd, which filed a miscellaneous application seeking correction of typographical mistakes in a previous Tribunal order. The application highlighted that certain grounds were inadvertently missed for adjudication and that the estimation of business profit at 0.75% by the CIT(A) was erroneous as there was no rejection of the books of accounts by the AO. The Tribunal acknowledged the oversight and corrected the order to reflect the inclusion of these issues, thereby allowing the miscellaneous petition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129991 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 21-02-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V. SRINIVAS
• Keywords: Rejection of books of accounts; Business income
• Section: 68; 69A

Judgement Text

MP No.64/Bang/2023 M/s. Bhoopalam Marketing Services, Shimoga IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER MP No.64/Bang/2023 (Arising out of ITA No.375/Bang/2022) Assessment Year: 2017-18 M/s. Bhoopalam Marketing Services Pvt. Ltd #107, Subhadra Nilaya SPM Road Shimoga 577 202 PAN NO : AADCB3705F Vs. ACIT Circle-1 Shimoga APPELLANT RESPONDENT Appellant by : Shri V. Srinivas, A.R. Respondent by : Shri Sankar Ganesh K., D.R. Date of Hearing : 23.06.2023 Date of Pronouncement : 23.06.2023 O R D E R PER BEENA PILLAI, JUDICIAL MEMBER: The present miscellaneous application is filed by the assessee seeking certain typographical mistakes that has crept in the order by this Tribunal dated 15.9.2022. 2. The ld. A.R. submitted that ground Nos.2 & 2.1 has inadvertently missed out for adjudication. He submitted that in para 6 of the order, this Tribunal has remanded the issues back to the file of ld. AO for de-novo verification. However, in para 3, there is an observation that the only issue raised is in respect of addition made u/s 69A of the Income-tax Act,1961 ['the Act' for short] in respect of the cash deposits during demonetization period as unexplained. The ld. A.R. submitted that para 6 only considers the cash deposits added in the hands of the assessee amounting to Rs.2,98,08,080/-. MP No.64/Bang/2023 M/s. Bhoopalam Marketing Services, Shimoga Page 2 of 4 However, the entire addition made by the ld. AO amounting to Rs.5,82,76,300/- has been remanded to the ld. AO. Referring to the assessment order, the ld. A.R. submitted that the total addition of Rs.5,82,76,300/- comprising of 2 more disallowances being business income adopted @ 0.75% by the ld. CIT(A) and bank FD interest disallowed. He submitted that in respect of the business income considered by the ld. CIT(A) at 0.75% is erroneous as there is no rejection of books of accounts by the ld. AO. The assessee has also been maintaining audited books of accounts and accordingly an estimation cannot be made in respect of the same. Referring to the table reproduced by the ld. CIT(A) at page 19 of the impugned order, he submitted that assessee has considered the net profit @ 0.33% and that adopting 0.75% by the ld. CIT(A) is not justified. He thus, prayed that this issue to be included in para 3 as para 6 categorically mentioning the issue being remanded to the ld. AO for de-novo verification. 3. The ld. D.R. on the contrary relied on the orders passed by the Tribunal by relying on the specific direction for de-novo verification by this Tribunal in para 6. 4. We have perused the submissions advanced by both sides. We note that though the direction to the ld. AO for de-novo verification has been given and all the issues have been remanded back to the ld. AO. The observation in para 3 regarding the only issue being raised being in respect of addition on account of cash deposits during demonetization period therefore needs to be rectified. We accordingly, rectify para 3 by observing as under: “3. The issues that arises in the present appeals are (i) addition made u/s 69A r.w.s. 115 BBE being MP No.64/Bang/2023 M/s. Bhoopalam Marketing Services, Shimoga Page 3 of 4 the cash deposited during demonetization period as unexplained (ii) Estimation of business profit @ 0.5% without rejecting the books of accounts. ................................................................................. ..............................................................................” 4.1. One more change that needs to be made in para 6 as we observe is that the addition is just not limited to section 68 of the Act as there is a disallowance of business profit on estimate basis. Accordingly, the relevant at page 6 & 7 of the Tribunal’s order shall be read as under: “Admittedly the assessee has deposited cash during the post-demonetization between 9.11.2016 and 30.12.2016. Therefore, ld. CIT(A) made addition in respect of demonetization cash deposited u/s 68 of the Act and has also disallowed the business profit @ 0.75%. The ld. CIT(A) made such addition as the assessee could not file requisite details as the notice was issued to the email address that was not functional. In the interest of justice, we deem it proper to remand the issues back to the ld. AO for a de-novo verification.” 4.2 Rest of the portion of the order by the Tribunal shall remain unchanged. 4.3 Accordingly, the miscellaneous petition filed by the assessee stands allowed. MP No.64/Bang/2023 M/s. Bhoopalam Marketing Services, Shimoga Page 4 of 4 5. In the result, the miscellaneous petition filed by the assessee is allowed. Order pronounced in the open court on 23 rd June, 2023 Sd/- (Laxmi Prasad Sahu) Accountant Member Sd/- (Beena Pillai) Judicial Member Bangalore, Dated 23 rd June, 2023. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.