Income Tax Appellate Tribunal - Chennai
N.Narayanasamy, Virudhunagar vs Acit, Virudhunagar on 16 December, 2019
आयकर अपील य अ धकरण,'सी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL, 'C' BENCH : CHENNAI
ी इंटूर रामा राव, लेखा सद य एवं
ी ध ु व
ु आर.एल रे डी, या यक सद य के सम
[BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER]
आयकर अपील सं./I.T.A. Nos.1431 & 1432/CHNY/2019.
नधा$रण वष$ /Assessment years : 2014-15 & 2015-2016.
N. Narayanasamy, Vs. The Assistant Commissioner of
Prop. Banu Hotel, Income tax,
134, Madurai Main Road, Virudhunagar Circle,
Virudhunagar. Virudhunagar.
[PAN ACJPN 6473B]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ( क) ओर से/ Appellant by : Shri. D. Anand, Advocate
+,यथ( क) ओर से /Respondent by : Shri. AR.V. Sreenivasan, JCIT.
सन
ु वाई क) तार ख/Date of Hearing : 10-12-2019
घोषणा क) तार ख /Date of Pronouncement : 16-12-2019
आदे श / O R D E R
PER INTURI RAMA RAO, ACCOUNTANT MEMBER
These are appeals filed by the assessee directed against different orders of the Commissioner of Income Tax (Appeals)-1, Madurai ('CIT(A)' for short) dated 20.02.2019 for the Assessment Years (AY) 2014-15 and 2015-2016.
:- 2 -: ITA Nos.1431 & 32 /2019
2. Since, the identical facts and issues are involved in these appeals, we proceed to dispose of the same vide this common order.
3. For the sake of convenience and clarity the facts relevant to the appeal in ITA No.1431/Chny/2019 for assessment year 2014-15 are stated herein.
4. The Assessee raised the following grounds of appeal:
''1) The order of the learned CIT (Appeals) is opposed to the facts and contrary to law.
2) The learned CIT (Appeals) erred in not deciding the grounds (1) and (2) reproduced in para 3 of the appeal order.
3) The learned CIT (Appeals) failed to note that the assessing officer included the sales relating to the family members of the assessee while estimating the turnover of the assessee.
4) The learned CIT (Appeals) failed to note that the assessing officer estimated the turnover of the assessee for this year based on the sales figures relating to the next year.
5) The learned CIT (Appeals) ought to have followed the order of the Honourable Tribunal for the earlier years while estimating the turnover of the assessee.(copy enclosed)
6) The learned CIT (Appeals) failed to note that the same assessing officer based on the same evidences estimated the turnover of the assessee as below.
Estimated turn over for this Asst.year 2014-2015 by the AO and CIT (Appeal) higher sales value in earlier year Rs.6,03,81,864/- Estimated turn over for the future Asst.year 2015-2016 by the AO and CIT (Appeal) lower sales value in future year Rs.4,84,67,116/-
7) The CIT has failed to note the AD has estimated the higher sales in the A.Y. 2014-15 and lower sales in future period 201 5-16.
8) The learned CIT (A) failed to note that the net profit ratio will decrease when the sales will increase.
:- 3 -: ITA Nos.1431 & 32 /2019
9) The appellant prays for leave to add, amend, modify or alter any grounds of appeal at the time of or before the hearing of the appeal''.
5. The brief facts of the case are as under:
The appellant is an individual engaged in the business of running hotels. The return of income for the AY 2014-15 was filed on 04.02.2015 disclosing total income of Rs. 46,49,740/-. The Assessing Officer had conducted survey operations u/s.133A of the Income Tax Act, 1961 (in short ''the Act'') in the business premises of the assessee on 04.02.2015 and during the survey operations, the Assessing Officer found that assessee had not maintained any books of accounts and suppressed turnover. Therefore, the Assessing Officer formed an opinion that income escaped assessment to tax and accordingly issued notice u/s.148 of the Act on 29.09.2016. In response to which, assessee filed return of income on 18.08.2017 disclosing total income of C46,49,740/-Against the said return of income, the assessment was completed by the Assistant Commissioner of Income Tax, Virudhunagar Circle, Virudhunagar (in short ''the Assessing Officer'' vide order dated 28.12.2017 passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (for short 'the Act') at total income of C 61,06,505/-. While doing so, the AO based on the material found during the course of survey operations found out that during the period October, 2014 to December, 2014, assessee had suppressed :- 4 -: ITA Nos.1431 & 32 /2019 turnover of C61,46,516/- and inferred that assessee suppressed around eight times of reported turnover. Accordingly, the Assessing Officer estimated the turnover at C6,03,81,864/- and profit was estimated @18%, accordingly completed the assessment.
6. Aggrieved, assessee filed an appeal before the ld. CIT(A), who vide impugned order confirmed the action of the Assessing Officer.
7. Being aggrieved by the order of the ld. CIT(A), the appellant is in appeal before us in the present appeal. It is argued that in the assessment years 2012-13 and 2013-14, the turnover were computed at the rate of C75,000/- per month and profit was estimated at 10% by the Tribunal. It is submitted that following the rule of consistency, the same method may be adopted.
8. On the other hand, ld. Sr. Departmental Representative submitted that turnover should be estimated based on the seized materials and inference made by the Assessing Officer profit @18% be upheld.
9. We heard the rival submissions and perused the material on record. Admittedly, assessee had not maintained any books of accounts. Therefore, even the turnover has to be estimated based on :- 5 -: ITA Nos.1431 & 32 /2019 some cogent material, in the absence of any material evidence in support of actual turnover earned. No doubt, estimation always involves guess work. In the preceding assessment years i.e. 2012-13 and 2013-14, the Tribunal in assessee's own case estimated turnover at C75,000/- per month, involving the identical facts, the Tribunal held that as the estimated turnover net profit of 10% is reasonable. We do not find any reason to disturb the findings of the Tribunal. Accordingly, we direct the Assessing Officer to estimate the turnover at C75,000/- per month and also estimate profit at 10% of the estimated turnover in terms of the order passed by this Tribunal in assessee's own case in preceding two assessment years. We do not see any reason to default from the reasoning of the Tribunal in earlier years. Accordingly, the appeal filed by the assessee is partly allowed for statistical purpose.
ITA No.1432/CHNY/2019 for assessment year 2015-16
10. Since, the facts in the present appeal are identical to the facts in ITA No.1431/Chny/2019, for assessment year 2014-15, for the reasons mentioned therein, we remit the issue back to the file of the Assessing Officer as in the same lines indicated in appeal ITA :- 6 -: ITA Nos.1431 & 32 /2019 No.1431/Chny/2019 supra. Hence, the above captioned appeal filed by the assessee is partly allowed for statistical purpose.
11. In the result, the appeals filed by the assessee in ITA Nos. 1431 & 1432/CHNY/2019 for assessment years 2014-15 and 2015-16 are partly allowed for statistical purpose.
Order pronounced on 16th day of December, 2019, at Chennai.
Sd/- Sd/-
(ध ु व
ु आर.एल रे डी) (इंटूर रामा राव)
(DUVVURU RL REDDY) (INTURI RAMA RAO)
या"यक सद#य/JUDICIAL MEMBER लेखा सद य/ACCOUNTANT MEMBER
चे नई/Chennai
2दनांक/Dated:16th December,2019.
KV
आदे श क) + त4ल5प अ6े5षत/Copy to:
1. अपीलाथ(/Appellant 3. आयकर आयु7त (अपील)/CIT(A) 5. 5वभागीय + त न<ध/DR
2. +,यथ(/Respondent 4. आयकर आयु7त/CIT 6. गाड$ फाईल/GF