Income Tax Appellate Tribunal - Hyderabad
Laxmi Narayan Agarwal, Hyd, Hyderabad vs Acit, Cirlce-6(1), Hyd, Hyderabad on 21 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "B", HYDERABAD
BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA No. 787/Hyd/2016
Assessment Year: 2002-03
Sri Laxmi Narayan Agarwal, vs. Asst. Commissioner of
Hyderabad. Income-tax, Circle - 6(1),
Hyderabad.
PAN - ACDPA 7791 B
(Appellant) (Respondent)
Assessee by : Shri P. Murali Mohan Rao
Revenue by : Smt. U. Minichandran
Date of hearing : 13-12-2016
Date of pronouncement : 21-12-2016
O RDE R
PER S. RIFAUR RAHMAN, A.M.:
This appeal filed by the Assessee is directed against the order of CIT(A)-9, Hyderabad, dated 22 nd March, 2016 for AY 2002-03.
2. Briefly the facts of the case are that the assessee is engaged in the business of trading scrap and filed his original return of income for the AY 2002-03 on 09/10/2002 admitting taxable income of Rs. 81,160/-. Search and seizure operations u/s 132 of the Income-tax Act were conducted in the residential premises of the assessee on 07/11/2007. Subsequently, in response to notice issued u/s 153A, the assessee filed the return admitting taxable income of Rs. 2,76,990/-. The assessment was completed u/s 143(3) r.w.s. 153A of IT Act on 30/11/2009 by making the following additions:
2 ITA No. 787/H/16Sri Laxmi Narayan Agarwal
1. Difference in profit Rs. 1,23,435/-
2. Disallowance of deduction u/s 80U Rs. 40,000/-.
3. The assessee has raised 9 grounds of appeal, out of which ground Nos. 1 is general in nature. Ground Nos. 2 & 3 did not arise out of the order of the CIT(A), hence, we do not deal with the same.
Ground Nos. 4 to 6 are pertaining to the addition of Rs. 1,23,435/- on account of estimation of profit @ 6% of sales. Ground Nos. 7 & 8 pertain to the disallowance of deduction claimed u/s 80U of the Act for Rs. 40,000/-.
4. As regards the addition of Rs. 1,23,435/-, the AO noted that during the course of assessment proceedings, the assessee could not submit the bills for purchase and sales and as it was not possible to verify the purchase and sales in the absence of any bills, the AO rejected the books of account submitted by the assessee and estimated the net profit on the total sales admitted @ 6% and the difference in the profit admitted amounting to Rs. 1,23,435/- as income of the assessee.
5. Before the CIT(A), the assessee contended that the addition is not based on any incriminating material and hence it is liable to be deleted. Rejecting the contention of the assessee, the CIT(A) confirmed the action of the AO by observing that the assessee could not produce sufficient evidence with regard to the purchases and sales made by him, therefore, the AO is justified in rejecting the books and estimating the income. Further, he observed that the assessee's contention that this addition is not based on any incriminating material has not been raised in grounds of appeal and hence this aspect is not adjudicated upon.
6. Before us, the ld. AR of the assessee submitted that the issue in dispute is squarely covered by the decision of the coordinate bench of this Tribunal in assessee's own case for AY 2007-08 in ITA No. 3 ITA No. 787/H/16 Sri Laxmi Narayan Agarwal 1391/H/10, order dated 17/06/2015, a copy of which is available on record.
7. The ld. DR on the other hand relied on the orders of revenue authorities.
8. Considered the rival submissions and perused the material facts on record. We find that the issue in dispute is squarely covered in favour of the assessee by the coordinate bench of this Tribunal (supra), where in the Bench has held as under:
" 8. As regards ground relating to estimation of profits, we heard the rival parties. Admittedly, there is no incriminating material seized as a result of search and seizure operation indicating that the Books of Accounts maintained by the assessee are either defective or appellant had inflated the expenditure or suppressed the sales resulting in lower returned income. It is trite law that in the absence of any incriminating material suggesting that book results should be rejected the addition cannot be made on estimate basis in the assessment made u/s. 153A. Accordingly, the addition is deleted. Hence, this ground of appeal filed by the assessee is allowed."
8.1 As the issue is materially identical in the present case to that of AY 2007-08, respectfully following the decision of the coordinate bench, we set aside the order of the CIT(A) and delete the addition made on this count. Accordingly, ground Nos. 4 to 6 are allowed.
9. As regards ground Nos. 7 & 8 pertaining to disallowance of deduction u/s 80U of Rs. 40,000/-, during the course of assessment proceedings, the assessee submitted certificate issued by the civil surgeon Gandhi Hospital Hyderabad, in support of his claim of deduction u/s 80U of Rs. 40,000/-. When the AO questioned about the genuineness of the certificate dated 28/09/1999, the assessee agreed to withdraw the claim made u/s 80U of the Act and accordingly filed a letter with regard to this addition.
10. Before the CIT(A), the assessee contended that this addition is not based on any incriminating/seized material and hence it is liable to be deleted. Rejecting the contention of the assessee, the CIT(A) 4 ITA No. 787/H/16 Sri Laxmi Narayan Agarwal observed that the assessee himself filed a letter during the course of assessment proceedings withdrawing the claim. Further, he observed that the assessee's contention that this addition is not based on any incriminating material has not been raised in grounds of appeal and hence this aspect is not adjudicated upon. Accordingly, he upheld the addition.
11. The ld. AR submitted that the issue in dispute is covered against the assessee by his own case in AY 2007-08.
12. Ld. DR relied on the orders of revenue authorities.
13. Considered the rival submissions and perused the material facts on record. As the assessee himself withdrawn the claim before the AO, the CIT(A) was right in rejecting the assessee's claim and hence, we uphold the order of the CIT(A) on this issue and dismiss the grounds raised in this regard.
14. In the result, appeal of the assessee is partly allowed.
Pronounced in the open court on 21 st December, 2016 Sd/- Sd/-
(P. MADHAVI DEVI) (S. RIFAUR RAHMAN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 21 st December, 2016
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Copy to:-
1) Sri Laxmi Narayan Agarwal, C/o. P. Murali & Co., CAs, 6-3-655/2/3/, 1 st Floor, Somajiguda, Hyderabad - 82.
2) ACIT, Circle - 6 (1), Hyderabad.
3) CIT(A) - 9, Hyderabad 4 Pr. CIT - 6 Hyderabad
5) The Departmental Representative, I.T.A.T., Hyderabad.
6) Guard File 5 ITA No. 787/H/16 Sri Laxmi Narayan Agarwal D es c ri p t i o n Date Intls S . N o. ds 1. D r af t di c t at ed on S r. P . S . / P . S 2. D r af t pl ac e d be f or e a ut h or S r. P . S / P S D r af t p ro p os ed & pl ac e d b ef o re t h e s e c on d J M/ A M Mem b er 3 4 D r af t di s c us s e d/ a pp r ov e d b y s e c o n d Mem b er J M/ A M 5 A p pr ov e d D r af t c om es t o t he S r . P . S . / P S S r. P . S . / P . S 6. K e pt f or p r o no u nc em e nt on S r. P . S . / P . S . 7. Fi l e s en t t o t h e B e nc h C l erk S r. P . S . / P . S 8 D a t e o n w hi c h f i l e g o es t o t h e H e ad C l e rk 9 D a t e o f D i s p at c h o f o rd e r