M/s. Perfect Enterprises, Hyderabad v. The ITO Ward 10(1), Hyderabad

ITA 27/HYD/2011 | 2005-2006
Pronouncement Date: 24-02-2012 | Result: Allowed

Appeal Details

RSA Number 2722514 RSA 2011
Assessee PAN AAEFP7710Q
Bench Hyderabad
Appeal Number ITA 27/HYD/2011
Duration Of Justice 1 year(s) 1 month(s) 17 day(s)
Appellant M/s. Perfect Enterprises, Hyderabad
Respondent The ITO Ward 10(1), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 24-02-2012
Date Of Final Hearing 13-06-2011
Next Hearing Date 13-06-2011
Assessment Year 2005-2006
Appeal Filed On 07-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE CHANDRA POOJARI ACCOUNTANT MEMBER & SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER ITA NO. 27/HYD/2011 ASSESSMENT YEAR 2005-06 M/S PERFECT ENTERPRISES HYDERABAD ( PAN AAEFP7710Q) VS ITO WARD 10(1) HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI A.V. RAGHURAM RESPONDENT BY : SHRI T. DIWAKAR PRASAD DATE OF HEARING : 16.1.2012 DATE OF PRONOUNCEMENT : 24.2.2012 ORDER PER ASHA VIJAYARAGHAVAN JM . THIS APPEAL PREFERRED BY THE ASSESSEE IS DIREC TED AGAINST THE ORDER PASSED BY THE CIT(A) VI HYDERABAD DATED 29. 10.2010 AND PERTAINS TO THE ASSESSMENT YEAR 2005-06. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FIRM M/S PERFECT ENTERPRISES IS IN THE BUSINESS OF HUMAN RES OURCES CONSULTANCY AND PAINTING CONTACTS. FOR THE ASST. Y EAR 2005-06 THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS 2 46 420/- DURING THE COURSE OF ASSESSMENT PROCEEDI NGS THE ASSESSEE WAS ASKED AS TO WHY AN AMOUNT OF RS 26 15 664/- AND RS 12 26 948/- SHOULD NOT BE DISALLOWED CLAIMED ON ACCOUNT OF OPERATIVE EXPENDITURE AND NON PAYMENT OF TDS RESPEC TIVELY. HOWEVER THE ASSESSING OFFICER FINALLY COMPUTED THE TOTAL INCOME BY ESTIMATING THE PROFIT AT 20% ON CONTRACT RECEIPT S AND THUS ITA NO.27/H/2011 M/S PERFECT ENTERPRISES HYDERABAD 2 ARRIVED AT RS 34 76 320/- WHILE DOING SO THE ASSES SING OFFICER OBSERVED AS UNDER: ON 24.12.2008 MS. LAXMI PARTNER APPEARED BUT FAIL ED TO PRODUCE THE COMPLETE SET OF BOOKS OF ACCOUNT AND AL SO THE BILLS AND VOUCHERS IN SUPPORT OF CLAIMS IN THE RETURN OF INCOME. IT WAS THEREFORE PROPOSED TO COMPLETE THE ASSESSMENT ESTIMATING THE TOTAL INCOME OF THE ASSESSEE AT 20% OF THE GROSS RECEIPTS FOR WHICH THE PARTNER OF THE ASSESSE E FIRM AGREED ACCORDINGLY THE ASSESSMENT IS COMPLETED ESTI MATING THE TOTAL INCOME OF THE ASSESSEE @ 20% OF THE GROSS RECEIPTS OF RS 1 73 81 592/- WHICH WORKS OUT TO RS 34 76 318/- 3. THE ASSESSEE FIRM FILED APPEAL BEFORE THE HONB LE CIT(A) RAISING VARIOUS GROUNDS. THE ASSESSEE FILED ADDI TIONAL GROUNDS OF APPEAL CONTESTING THE OBSERVATION OF THE ASSESSI NG OFFICER THAT THE ASSESSEE FIRM AGREED FOR ESTIMATION AT 20% OF GROSS RECEIPTS. 4. THE CIT(A) CALLED FOR REMAND REPORT FROM THE AS SESSING OFFICER. 7. HOWEVER THE CIT(A) REJECTED TO ADMIT THE ADDIT IONAL GROUND RAISED BY THE ASSESSEE ON THE GROUND THAT TH E ASSESSEE WAS NOT ENTITLED TO PRODUCE ADDITIONAL EVIDENCE AS THE ASSESSEES CASE DOES NOT FIT INTO ANY OF HE CLAUSES OF RULE 46 A OF THE IT RULES. THUS THE CIT(A) DISMISSED THE APPEAL FILED B Y THE ASSESSEE. 8. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. THE LEARNED DR RELIED ON THE DECISION IN THE CASE OF C IT VS. JAIPUR UDYOG LTD. (227 ITR 345) (JAIPUR) AND A.K. BABU KHAN VS. CIT (102 ITR 757) (AP) CONTENDING THAT THE ADDITIO NAL GROUNDS CANNOT BE ADMITTED AS THERE IS NO CHANGE IN THE FAC TS OF THE CASE. ITA NO.27/H/2011 M/S PERFECT ENTERPRISES HYDERABAD 3 9. THE LEARNED AR SHRI A. V. RAGHURAM SUBMITTED TH AT THE CIT(A) HAD CALLED FOR REMAND REPORT WHICH SHOWS THA T THE CIT(A) HAS TACITLY ADMITTED THE ADDITIONAL EVIDENCE AND IF HE HAD NOT ADMITTED ADDITIONAL EVIDENCE THE REMAND REPORT NEED NOT HAD BEEN CALLED FOR. WITHOUT PREJUDICE HE ARGUED T HAT FOR EARLIER YEARS THE INCOME WAS ESTIMATED AT 5% OF THE GROSS RECEIPTS AND ESTIMATION AT 20% IS VERY HIGH AND ARBITRARY. 10. WE HAVE HEARD BOTH THE PARTIES. WE HAVE PERUS ED THE REMAND REPORT WHICH IS AS FOLLOWS: THE AR OF THE ASSESSEE ALONG WITH MS. LAXMI APPEARE D BEFORE THE AO ON 15.6.2010 AND 21.6.2010 AND PRODUCED BOOK S OF ACCOUNT BILLS AND VOUCHERS FOR VERIFICATION.. THE DETAILS OF BREAK-UP OF INCOME AND EXPENSES CAT EGORY WISE ACTIVITY WISE LEDGER ACCOUNT COPIES OF MATERIA L PURCHASERS AND OTHER DIRECT EXPENSES DETAILS OF COM PLIANCE OF TDS PROVISIONS AND A NOTE ON ACTIVITY AS FRANCHISE OF M/S ASIAN PAINS INDIA LTD WERE OBTAINED AND VERIFIED WI TH REFERENCE TO BOOKS OF ACCOUNTS. BILLS/VOUCHERS AND BANK STATEMENTS. ON VERIFICATION NO DISCREPANCY WAS FOUND.(ITALICS SUPPLIED). THE DETAILS GATHERED D URING THE COURSE OF REMAND PROCEEDINGS ALONG WITH COPIES OF L EDGER EXTRACTS ARE ENCLOSED. HOWEVER IT IS AGAIN REQUEST ED THAT THE ADDITIONAL EVIDENCE PRODUCED BY ASSESSEE BEFORE THE CIT(A) MAY NOT BE ENTERTAINED IN VIEW OF THE DETAILED REAS ONS ELABORATED IN EARLIER REMAND REPORT SUBMITTED ON 16 .10.2009. 11. FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE M AINTAINED REGULAR ACCOUNT BOOKS AND THE SAME WERE PRODUCED BE FORE THE ASSESSING OFFICER FOR VERIFICATION DURING THE REMAN D PROCEEDINGS. THE ASSESSING OFFICER AFTER VERIFICATION OF SUCH AC COUNT BOOKS AND OTHER MATERIAL DID NOT FIND ANY DISCREPANCY. THERE FORE WE DIRECT ITA NO.27/H/2011 M/S PERFECT ENTERPRISES HYDERABAD 4 THE AO TO ARRIVE AT THE TOTAL INCOME OF THE ASSESSE E AFTER EXAMINING THE BOOKS OF ACCOUNT BILLS AND VOUCHERS TO BE PRODUCED BY THE ASSESSEE AFTER PROVIDING REASONABLE OPPORTUNITY FOR THE ASSESSEE TO PRESENT ITS CASE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON: 24.2.20 12 SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER DATED THE 24 TH FEBRUARY 2012 COPY FORWARDED TO: 1. SHRI B. NARSING RAO & CO. CA PLOT NO.554 ROAD N O.92 JUBILEE HILLS HYDERABAD-96. 2. THE ITO WARD 10(1) HYDERABAD 3. THE CIT(A)-VI HYDERABAD 4. THE CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP/