The ACIT, Circle-5(1), Visakhapatnam v. Sri T Appala Swamy, Visakhapatnam

ITA 439/VIZ/2009 | 2006-2007
Pronouncement Date: 24-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 43925314 RSA 2009
Assessee PAN AAQPT9195F
Bench Visakhapatnam
Appeal Number ITA 439/VIZ/2009
Duration Of Justice 5 month(s) 17 day(s)
Appellant The ACIT, Circle-5(1), Visakhapatnam
Respondent Sri T Appala Swamy, Visakhapatnam
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 24-02-2010
Date Of Final Hearing 04-02-2010
Next Hearing Date 04-02-2010
Assessment Year 2006-2007
Appeal Filed On 07-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.439/VIZAG/2009 ASSESSMENT YEAR : 2006-07 THE ACIT CIRCLE-5(1) VISAKHAPATNAM SRI T. APPALA SWAMY VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.AAQPT 9195F CO NO.69/VIZAG/2009 ASSESSMENT YEAR : 2006-07 THE ACIT CIRCLE-5(1) VISAKHAPATNAM SRI T. APPALA SWAMY VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.AAQPT 9195F APPELLANT BY: SHRI G.S.S. GOPINATH DR RESPONDENT BY: SHRI C.V.S. MURTHY CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) MAINLY ON TWO GROUNDS WHICH ARE AS UNDER:- 1) THE CIT(A)-1 HAS ERRED IN DIRECTING THE A.O. TO EST IMATE THE INCOME AT 5% OF THE GROSS TRANSPORT RECEIPTS AS AGAINST 9% ESTIMATED BY THE A.O. WITHOUT ANY VALID EXPLANATION. 2) THE CIT(A)-1 VISAKHAPATNAM ERRED IN DIRECTING THE A.O. TO ACCEPT THE INCOME RETURNED BY THE ASSESSEE IN RESPECT OF T HE BUSINESS OF IMFL WITHOUT ANY VALID EXPLANATION. 2. THE ASSESSEE HAS ALSO FILED THE CROSS OBJECTIONS ASSAILING THE ORDER OF THE CIT(A) THAT HE HAS ERRED IN ESTIMATING INCOME A T 5% OF TRANSPORT RECEIPTS AS AGAINST THE DECLARED INCOME. 3. SINCE THE REVENUES APPEAL AND THE COS WERE HEAR D TOGETHER WE ADJUDICATE THEM SIMULTANEOUSLY THROUGH THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. GROUND NO.1 IN THE REVENUES APPE AL AND THE CO RELATE TO 2 THE ESTIMATE OF INCOME FOR TRANSPORT BUSINESS. THE ASSESSING OFFICER HAS ESTIMATED THE INCOME AT 9% ON GROSS RECEIPTS OF TRA NSPORT BUSINESS WHICH WORKS OUT TO RS.7 67 769/- AGAINST THE DECLARED INC OME AT RS.2 36 469/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) RESTRICTED IT TO 5% OF THE GROSS TRANSPORT RECEIPTS. THE ESTI MATION MADE BY THE CIT(A) IS NOT ACCEPTED BY BOTH THE PARTIES AND AS SUCH THE Y ARE BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ASSESSMENT ORDERS IN THE ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 2007- 08 IN WHICH THE INCOME WAS ESTIMATED AT 3% OF TOTAL RECEIPTS. SINCE THE FACTS IN BOTH THE ASSESSMENT YEARS ARE SAME THE INCOME S HOULD BE ESTIMATED AT 3% OF THE TOTAL RECEIPTS. THE LD. D.R. ON THE OTHE R HAND HAS SUBMITTED THAT IN 2007-08 THE TOTAL RECEIPTS WAS OF RS.2 75 210/- AGAINST THE TOTAL RECEIPTS OF RS.85 30 370/- IN THE IMPUGNED ASSESSMENT YEAR. TH EREFORE BOTH THE CASES ARE NOT COMPARABLE. HENCE THE PERCENTAGE OF ESTIM ATION IN 2007-08 CANNOT BE APPLIED IN THE IMPUGNED ASSESSMENT YEAR. WE HAV E CAREFULLY EXAMINED THE FACTS OF THE CASE AND THE PERCENTAGE ADOPTED BY THE A.O. IN A.Y. 2007-08 AND ARE OF THE VIEW THAT TO MEET THE ENDS OF JUSTIC E INCOME BE ESTIMATED AT 4% OF GROSS TRANSPORT RECEIPTS TO WHICH ASSESSEE HA S AGREED. ACCORDINGLY WE MODIFY THE ORDER OF CIT(A) AND DIRECT THE A.O. T O ESTIMATE THE INCOME AT 4% OF THE GROSS TRANSPORT RECEIPTS. 5. WITH REGARD TO THE GROUND NO.2 IN REVENUES APPE AL WE NOTICED THAT FROM THE IMFL BUSINESS THE ASSESSING OFFICER HAS E STIMATED GROSS PROFIT RANGING BETWEEN 26% TO 77% WHILE COMPUTING THE NET INCOME FROM THE BAR AND RESTAURANT BUSINESS. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSIONS THAT THE NORMAL RATE OF GROSS PROFIT IN A SIMILAR LINE OF BUSINESS IN THE SAME LOCALITY IS ABOUT 15% TO 18% AGAINST WHICH ASSESSEE HAD DISCLOSED A G.P. OF 21.5% WHICH IS QUI TE REASONABLE. FINDING FORCE IN THE CONTENTION OF THE ASSESSEE THE CIT(A) DIRECTED THE A.O. TO ACCEPT THE DISCLOSED G.P. AT 21%. NOW THE REVENUE IS BEFORE US AND PLACED A HEAVY RELIANCE UPON THE A.OS ORDER. THE LD. COUNS EL FOR THE ASSESSEE ON THE OTHER HAND HAS INVITED OUR ATTENTION TO THE ASSESSM ENT ORDER FOR THE ASSESSMENT YEAR 2004-05 IN WHICH THE G.P. WAS ESTIM ATED AT 20% ON SALES 3 BY THE A.O. THE CIT(A) FURTHER REDUCED THE G.P. RA TE TO 18% ON TOTAL SALES. IN THE INSTANT CASE ASSESSEE HAS ALREADY DECLARED AT 21% MORE THAN THAT THE ESTIMATION MADE BY THE CIT(A) IN OTHER YEARS. 6. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE LOWE R AUTHORITIES AND WE FIND THAT ASSESSEE HAS ALREADY DECLARED THE MORE PR OFIT ON SALE OF IMFL IN COMPARISON TO ESTIMATION MADE BY THE REVENUE AUTHOR ITIES IN OTHER YEARS. WE THEREFORE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) AS HE HAS RIGHTLY DIRECTED THE A.O. TO ADOPT THE DECLARED PROFITS IN THE IMPUGNED ASSESSMENT ORDER ON SALE OF IMF. 7. IN THE RESULT THE APPEAL OF THE REVENUE AND THE C.O. ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 24.2.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 24 TH FEBRUARY 2010 COPY TO 1 THE ACIT CIRCLE-5(1) VISAKHAPATNAM 2 SRI T. APPALASWAMY S/O T. APPA RAO D.NO.HIG-178 VINAYAKNAGAR VISAKHAPATNAM 3 THE CIT-1 VISAKHAPATNAM 4 THE CIT(A) VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM