Smt. V. Sailaja, Hyd, Hyderabad v. The ITO, Ward-8(2), Hyderabad

ITA 1111/HYD/2011 | 2007-2008
Pronouncement Date: 03-02-2012 | Result: Dismissed

Appeal Details

RSA Number 111122514 RSA 2011
Assessee PAN AEJPV4149N
Bench Hyderabad
Appeal Number ITA 1111/HYD/2011
Duration Of Justice 7 month(s) 24 day(s)
Appellant Smt. V. Sailaja, Hyd, Hyderabad
Respondent The ITO, Ward-8(2), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 03-02-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 03-02-2012
Assessment Year 2007-2008
Appeal Filed On 09-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBE R. ITA NO.1111/HYD/2011 (ASSESSMENT YEAR 2007-08) SMT. V.SAILAJA HYDERABAD. (PAN - AEJPV 4149 N ) V/S INCOME - TAX OFFICER WARD - 8(2) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.A.SAI PRASAD RESPONDENT BY : SHRI B.V.PRASAD REDDY DATE OF HEARING 25. 1.2012 DATE OF PRONOUNCEMENT 3.2.2012 O R D E R PER ASHA VIJAYARAGHAVAN JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(A) VIJAYAWADA DATED 30.3.2011 FOR THE ASSE SSMENT YEAR 2007-08. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO THE ADDITION MADE BY RESORTING TO ESTIMATION OF PROFIT OF THE ASSESSEE. 3. FACTS OF THE ASSESSEE IN BRIEF ARE THAT THE ASS ESSEE AN INDIVIDUAL IS A COMMISSION AGENT FOR REAL ESTATE C OMPANY CALLED GREEN HOME GROUP OF COMPANIES. HER HUSBAND IS ALSO IN TH E SAME LINE OF BUSINESS. FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION ASSESSEE FILED RETURN OF INCOME DECLARING AN INCOME OF RS.5 34 017 . DURING THE COURSE OF ASSESSMENT THE ASSESSING OFFICER OBSERVE D THAT THE ASSESSEE HAD MADE HUGE DEPOSITS IN HER BANK ACCOUNT DURING T HE YEAR AND REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCES FOR SU CH DEPOSITS. IT WAS EXPLAINED THAT THE DEPOSITS IN THE BANK ACCOUNT ALS O INCLUDED RECEIPTS OF RS.16 47 801 BELONGING TO HER HUSBAND SHRI V.BH ASKAR AS IT WAS A JOINT ACCOUNT WITH THE BANK. IT WAS ALSO EXPLAINED THAT THE CASH DEPOSITS OF RS.33 37 000 WERE OUT OF THE WITHDRAWAL S MADE EARLIER ITA NO.1111/HYD/2011 SMT. V.SAILAJA HYDERABAD 2 FORM THE SAME ACCOUNT AND A FURTHER SUM OF RS.29 9 4 990 WAS CLAIMED TO HAVE BEEN RECEIVED FROM HER CUSTOMERS FO R PURCHASE OF OPEN PLOTS WHICH WERE SUBSEQUENTLY RETURNED AS TH E DEALS COULD NOT BE FINALIZED. THE ASSESSING OFFICER REJECTING THE EXPLANATION OF THE ASSESSEE AND OBSERVING THAT THERE WAS NO COMPLIANC E TO THE SUMMONS ISSUED ON 27.11.2009 TO BOTH THE ASSESSEE AND HER H USBAND FOR APPEARANCE ON 9.12.2009 CONCLUDED THAT THE DEPOSIT S IN THE BANK ACCOUNT WERE UNEXPLAINED IN TERMS OF S.69 OF THE AC T. CONSEQUENTLY MAKING AN ADDITION OF RS.76 49 575 AFTER REDUCING THE ADMITTED RECEIPTS OF THE RETURN OF INCOME AND THE WRONG ENT RY CLAIMED TO HAVE BEEN DEPOSITED IN THE BANK ACCOUNT. THUS THE ASSE SSMENT WAS COMPLETED ON AN INCOME OF RS.81 83 592 AFTER MAKIN G AN ADDITION OF S.69 OF THE ACT AS ABOVE AS AGAINST THE RETURNED I NCOME OF RS.5 34 017. 4. AGGRIEVED ASSESSEE PREFER4RED APPEAL BEFORE TH E CIT(A). THE CIT(A) GAVE PARTIAL RELIEF TO THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS. 5. IT WOULD APPEAR THAT THE ADDITION OF ALL THE DEPOSITS IN THE BANK ACCOUNT AS UNEXPLAINED U/S. 69 OF THE ACT HAS BEEN MADE WITHOUT GIVING ADEQUATE OPPORTUNITY T O THE APPELLANT TO EXPLAIN THE ENTRIES IN THE BANK ACCOUN T. FURTHER ADVERSE INFERENCE APPEARS TO HAVE BEEN DRAWN MAINLY ON ACCOUNT OF THE NON-COMPLIANCE TO THE SUMMONS ISSUED ON 27/11/2009. AS CONTENDED BY THE LEARNED AUTHORISED REPRESENTATIVE THE APPELLANT AND HER HUSBAND HAVE A VALID REASON OR THE NON-COMPLIANCE AS THE SUMMONS HAVE BE EN SERVED AFTER THE SPECIFIED DATE ON WHICH THEY WERE TO APPEAR BEFORE THE ASSESSING OFFICER. IT IS THE CLAIM OF T HE APPELLANT THAT THE DEPOSITS IN THE BANK ACCOUNT RELATE TO THE REAL ESTATE TRANSACTIONS HANDLED BY THE APPELLANT. IN SUCH CIR CUM STANCES IT MAY NOT BE JUSTIFIED IN CONCLUDING THAT THE DEPO SITS WERE UNRELATED TO THE REAL ESTATE BUSINESS AND ARE TO BE ASSESSED AS UNEXPLAINED DEPOSITS/INVESTMENT U/S. 69 OF THE ACT. THE ASSESSING OFFICER HAS NOT CONTROVERTED SUCH A CLAIM MADE DURING THE ASSESSMENT PROCEEDINGS. THE CONTENTION THAT A SUM OF RS.33 37 000 REPRESENTS THE DEPOSITS MADE OUT OF THE EARLIER WITHDRAWALS IS NOT ACCEPTABLE AS THE APPELLANT IS U NABLE TO DEMONSTRATE ANY NEXUS BETWEEN THE EARLIER WITHDRAWA LS AND THE SUBSEQUENT DEPOSITS IN THE BANK ACCOUNT. ON VE RIFICATION OF ITA NO.1111/HYD/2011 SMT. V.SAILAJA HYDERABAD 3 THE RETURN FILED BY THE APPELLANTS HUSBAND WHEREIN RECEIPTS TO THE EXTENT OF RS.33 70 301 HAVE BEEN DISCLOSED THE CLAIM THAT THE RECEIPTS OF RS.16 47 801 BELONGING TO HER HUSBA ND NEEDS TO BE EXCLUDED IS REASONABLE AS THE ACCOUNT IS JOINTL Y HELD BY THE BOTH OF THEM. AS A RESULT THE DIFFERENCE IN THE CRE DITS IN THE BANK ACCOUNT WORKS OUT TO RS.60 01 774 AS QUANTIFIE D IN THE LETTER FILED ON 18.12.2011. ON CAREFUL CONSIDERATIO N I AM UNABLE TO ACCEPT THE PLEA OF THE APPELLANT THAT THI S AMOUNT WHICH REPRESENTS THE ADDITIONAL TURNOVER WOULD HAVE GIVEN RISE TO A PROFIT MARGIN OF ONLY 12.5%. SUCH AN ESTIMATE HAS NO BASIS. ON THE OTHER HAND AS SEEN FROM THE RETURN OF INCOM E THE PROFIT MARGIN DISCLOSED ON THE ADMITTED RECEIPT S IS AROUND 36%. IN SUCH CIRCUM STANCES IT WOULD BE ONLY REASONABLE AND JUSTIFIED IF THE ADMITTED PROFIT MARGIN OF THE APPE LLANT IS ALSO APPLIED TO THE ADDITIONAL RECEIPTS OF RS.60 01 774 HELD TO BE BUSINESS RECEIPTS. THE ASSESSING OFFICER IS THERE FORE DIRECTED TO COM PUTE THE ADDITIONAL INCOM E TO BE BROUGHT TO TAX BY ADOPTING THE PROFIT MARGIN ADM ITTED BY THE APPELLANT IN HER RETURN OF INCOME ON THE ADDITIONAL RECEIPTS OF RS.6 0 01 774. THE ADDITION OF RS.76 49 575 MADE WOULD CONSEQUENTL Y STAND SUBSTITUTED BY THE ABOVE COMPUTED ADDITIONAL INCOME . THUS WHILE THE ASSESSING OFFICER BROUGHT TO TAX TH E AGGREGATE AMOUNT OF DEPOSITS AS UNEXPLAINED DEPOSITS/INVESTMENT UNDE R S.69 OF THE ACT THE CIT(A) TREATING THE DEPOSITS IN THE BANK ACCOU NT AS COSNTITUTIANG BUSINESS RECEIPTS OF THE ASSESSEE APPROVED ASSESS MENT OF ONLY AN ESTIMATED PERCENTAGE OF SUCH RECEIPTS WHICH ALONE ACCORDING TO THE CIT(A) CONSTITUTED THE INCOME OF THE ASSESSEE. 5. STILL AGGRIEVED ASSESSEE IS IN SECOND APPEAL B EFORE US. 6. LEARNED COUNSEL FOR THE ASSESSEE REITERATING THE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES SUB MITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING ANY PART OF THE ADDITION MADE BY THE ASSESSING OFFICER. IN ANY EVENT HE SUBMITTED ESTIMATION OF PROFIT AT 36% ON THE ADDITIONAL TURNOVER BROUGHT TO TAX A S DIRECTED BY THE CIT(A) EXCESSIVE AND UNREASONABLE. HE ALSO FILED COPIES OF BANK ACCOUNT STATEMENT AND DETAILS OF WITHDRAWALS FROM T HE BANK MADE BY THE ASSESSEE IN SUPPORT OF HIS ARGUMENTS. ITA NO.1111/HYD/2011 SMT. V.SAILAJA HYDERABAD 4 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT(A) A ND SUBMITTED THAT THE CIT(A) HAS GIVEN REASONABLE RELIEF TO THE ASSES SEE AND AS SUCH THERE IS NO JUSTIFICATION FOR ANY FURTHER RELIEF FR OM THE TRIBUNAL.. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT IS THE HUGE AMOUNT OF DEPOSITS IN THE BANK ACCOUNT NOTICED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS WHICH RESULTED IN THE ADDIT ION UNDER S.69 OF THE ACT. IN THE ABSENCE OF ANY NEXUS BETWEEN THE W ITHDRAWALS MADE EARLIER WITH THE DEPOSITS MADE BY THE ASSESSEE THE CIT(A) IN OUR CONSIDERED OPINION WAS JUSTIFIED IN REJECTING THE CONTENTION OF THE ASSESSEE THAT SOME OF THE DEPOSITS INTO THE BANK AC COUNT WERE MADE OUT OF THE WITHDRAWALS MADE EARLIER BY THE ASSESSEE HERSELF. IT IS AN UNDISPUTED FACT THAT THE HUGE DEPOSITS IN THE BANK ACCOUNT NOTICED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEED INGS REVEALED AT LEAST TO SOME EXTENT THE BUSINESS RECEIPTS OF THE ASSESSEE WHICH HAVE NOT BEEN TAKEN INTO ACCOUNT WHILE FILING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. AS SUCH ASSESSEE CA NNOT ESCAPE ADDITION TOWARDS ESTIMATED PROFIT IN RELATION TO TH IS ADDITIONAL TURNOVER SOUGHT TO BE TAXED BY THE DEPARTMENT. WE FIND NO INFIRMITY IN THE REASONING GIVEN BY THE CIT(A) FOR REJECTING THE VAR IOUS CONTENTIONS URGED BY THE ASSESSEE BEFORE HIM AND CONSIDERING T OTALITY OF FACTS AND CIRCUMSTANCES WE FIND THAT THE RATE OF 36% ADOPTED BY THE CIT(A) FOR ESTIMATING THE PROFIT OF THE ASSESSEE ON THE ADDITI ONAL TURNOVER OF RS.60 01 774 BROUGHT TO TAX IS TO BE CONFIRMED S INCE THE SAME HAS BEEN WORKED OUT BASED ON THE BASIS OF THE RATE AT W HICH PROFIT HAS BEEN DECLARED ON THE TURNOVER DECLARED IN THE RETUR N. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) AND REJECT THE GROUN DS OF THE ASSESSEE IN THIS APPEAL. ITA NO.1111/HYD/2011 SMT. V.SAILAJA HYDERABAD 5 9. IN THE RESULT ASSESSEES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 3.2.2012 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 3RD FEBRUARY 2012 COPY FORWARDED TO: 1. SMT. V.SAILAJA C/O. M/S. CH.PARTHASARATHY & CO. 1-1-298/2/B/3 1 ST FLOOR SOWBHAGYA AVENUE STREET NO.1 ASHOKNAGAR HYDERABAD 500 020. 2. INCOME - TAX OFFICER WARD - 8(2) HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) VIJAYAWADA 4. COMMISSIONER OF INCOME - TAX II HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD B.V.S.