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Income Tax Appellate Tribunal - Hyderabad

Sailesh Kumar Agarwal, Hyd, Hyderabad vs Ito, Ward-5(2),Hyd, Hyderabad on 14 February, 2017

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                                                 ITA.No.1081/Hyd/2016
                                  Sri Sailesh Kumar Agarwal, Hyderabad.

            IN THE INCOME TAX APPELLATE TRIBUNAL
          HYDERABAD BENCHES "A" (SMC) : HYDERABAD

   BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER

                      ITA.No.1081/Hyd/2016
                    Assessment Years 2010-2011

Sri Sailesh Kumar Agarwal           The Income Tax Officer
Hyderabad.                      vs. Ward-5(2)
PAN AAYPA8954F                      Hyderabad.
(Appellant)                         (Respondent)

                    For Assessee : Shri P. Muralimohan Rao
                    For Revenue : Shri A. Sitarama Rao

                Date of Hearing : 14.02.2017
         Date of Pronouncement : 14.02.2017

                               ORDER

This appeal by the assessee is directed against the order of the Ld. CIT(A)-4 on the following grounds :

1. "The order of the CIT(A)-4, Hyderabad is erroneous both on facts and in law.

2. The Ld. CIT (A) erred in sustaining the disallowance of Rs.47,101 claimed as standard deduction in the computation of income from house property, which is calculated @ 30% of rent received of Rs.1,57,004/ -.

3. The Ld. CIT(A) ought to have appreciated the fact that land given to tenant was not an open land, a structure was built on the land and eligible for standard deduction.

4. The Ld. CIT (A) ought to have appreciated the certificate given by the tenant i.e. M/ s Ramcor Marketing Pvt. Ltd which is clearly stated that there is a structure built at the plot.

Sri Sailesh Kumar Agarwal, Hyderabad.

5. The Ld. CIT (A) erred in not adjudicating on the ground taken in respect of disallowance of standard deduction of Rs.9,540 from charges of Rs.31,800.

6. The Ld. CIT(A) erred in sustaining the disallowance of Rs.9,540 claimed as standard deduction @ 30% of amenities of Rs.31,800 which is part of rental income only .

7. The Ld. CIT (A) ought to have appreciated the fact that assessee has received rent of Rs.84,800 for the building as per lease deed which includes rent of Rs. 53,000 and amenities of Rs.31,800 and both the component are eligible for standard deduction.

8. The Ld. CIT(A) erred in confirming the addition made of Rs.20,29,499 under section 69A of the Act.

9. The Ld. CIT(A) ought to have appreciated the fact that assessee has made cash deposit in bank account out of gross receipts from the father's gunny bag business.

10. The Ld. CIT(A) ought to have appreciated that the A.O. has added total amount of Rs.20,29,499 which is gross receipt from gunny bag business and even though if addition is made it should be at reasonable profit percentage which is between 3% or 4% in same line of business.

11. The assessee may add, alter or modify or substitute any other point to the grounds of appeal at any time before or at the time of hearing of the appeal."

2. After hearing rival contentions, I find that the assessee submitted that they are in the business of purchase and sale of old and new gunny bags for the last 50 years and that the department has accepted the same in the earlier year. The deposits in the bank accounts were the transactions i.e., purchase and sale transactions of old and new gunny bags. This explanation was accepted by the very same A.O. i.e., ITO, Ward-5(2), Hyderabad for the previous A.Y. 2009-2010 and the deposits from this bank account were considered as turnover of the assessee and profit on the same was taxed at 8%.

Sri Sailesh Kumar Agarwal, Hyderabad.

3. During the impugned A.Y. the A.O. has not computed the income in the same manner as in the previous year. He has added the peak deposits by rejecting the claim of the assessee that the deposits in the bank account is turnover of the assessee.

4. In view of the above, I am of the view that, there should be consistency on the part of the A.O. The deposits in the bank account should be taken as the turnover of the assessee from purchase and sale of old and new gunny bags. The income should be assessed to tax at 8% of such turnover as was done in the previous year.

5. In the result, appeal of the assessee is partly allowed.

Order pronounced in the open Court on 14.02.2017.

Sd/-

(J. SUDHAKAR REDDY) ACCOUNTANT MEMBER Hyderabad, Dated 14th February, 2017 VBP/-

Copy to

1. Shri Sailesh Kumar Agarwal, Hyderabad.

C/o. P. Murali & Co., Chartered Accountants, 6-3-655/2/3, 1st Floor, Somajiguda, Hyderabad - 82.

2. The Income Tax Officer, Ward-5(2), Hyderabad.

3. CIT(A)-4, 2nd Floor, 'A' Block, I.T. Towers, A.C. Guards, Masab Tank, Hyderabad - 500 004.

4. Pr. CIT-4, Hyderabad.

5. D.R. ITAT "A" (SMC) Bench, Hyderabad.

6. Guard File.