Hotel Sai Leela Residency, Hyderabad v. ACIT, Karimnagar

ITA 656/HYD/2009 | 2006-2007
Pronouncement Date: 19-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 65622514 RSA 2009
Bench Hyderabad
Appeal Number ITA 656/HYD/2009
Duration Of Justice 10 month(s) 1 day(s)
Appellant Hotel Sai Leela Residency, Hyderabad
Respondent ACIT, Karimnagar
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 19-03-2010
Date Of Final Hearing 10-03-2010
Next Hearing Date 10-03-2010
Assessment Year 2006-2007
Appeal Filed On 18-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NOS.656/HYD/2009 ASSTT. YEAR : 2006-07 M/S HOTEL SAI LEELA RESIDENCY KARIMNAGAR (AACFH-9340Q) VS ACIT CIRCLE 1 KARIMNAGAR (APPELLANT) (RESPONDENT) ITA NO.653/HYD/2009 ASSTT. YEAR : 2006- 07 ACIT CIRCLE 1 KARIMNAGAR VS M/S HOTEL SAI LEELA RESIDENCY KARIMNAGAR (AACFH-9340Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI E. NAGENDRA PRASAD RESPONDENT BY : SHRI S. RAMA RAO O R D E R PER: CHANDRA POOJARI ACCOUNTANT MEMBER THESE TWO CROSS APPEALS PREFERRED ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE ARE DIRECTED AGAINST THE COM MON ORDER PASSED BY THE CIT(A)-III DATED 9.3.2009 AND PERTAINS TO THE ASSESSMENT YEAR 2006-07. SINCE ISSUES INVOLVED IN THESE TWO CROSS APPEALS A RE COMMON IN NATURE THEY ARE CLUBBED TOGETHER HEARD TOGETHER AND DISPOSED OFF VIDE THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEES GRIEVANCE IS RELATING TO SUSTAINING ADD ITION OF RS.3 35 290/- OUT OF ADDITION OF RS.8 32 244/- AND TH E REVENUES GRIEVANCE AGAINST GRANTING RELIEF OF RS.4 96 954/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI RM IS RUNNING A HOTEL. A SURVEY U/S 133A WAS CONDUCTED AT THE BUSINESS P REMISES ON 2 2 30.9.2005 DURING WHICH THE ASSESSEE ADMITTED UNDISCLOSED I NCOME OF RS.8 00 000/- FOR THE ASSESSMENT YEAR 2006-07. THE RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 WAS FILED ON 16.1.2007 A DMITTING TOTAL INCOME OF RS.8 35 250/- INCLUDING THE UNDISCLOSED INCOME A DMITTED DURING THE SURVEY. IN THE PROFIT AND LOSS ACCOUNT FILED WITH THE RETURN THE GROSS RECEIPTS WERE SHOWN AT RS.31 66 080/- ON WHICH THE NET PROFIT BEFORE DEPRECIATION AND INTEREST AND REMUNERATION TO PARTNERS WERE SHOWN AT RS.11 28 666/- AND AFTER DEDUCTING THE DEPRECI ATION INTEREST AND REMUNERATION TO PARTNERS THE NET PROFIT WAS SHOWN AT RS.35 250/- THE ASSESSING OFFICER OBSERVED THAT THE GROSS RECEIPTS OF TH E ASSESSEE FOR SIX MONTHS PERIOD I.E. FROM APRIL TO SEPTEMBER 2 005 AS FOUND DURING SURVEY WAS AROUND RS.24 27 667/- WHICH WAS ADMITTED BY THE MANAGING PARTNER. THE DETAILS OF SUCH RECEIPTS AS EVIDEN T FROM IMPOUNDED RECEIPT BOOKS. SINCE NO BOOKS OF ACCOUNTS WERE FOUND MAINTAINED DURING THE COURSE OF SURVEY AND NO BOOKS OF ACCOUNTS WERE PRODUCED DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFF ICER ESTIMATED THE TOTAL RECEIPT OF THE YEAR AT RS.48 55 33 4/- ON THE BASIS OF RECEIPT BOOKS IMPOUNDED DURING THE SURVEY. IT WAS FUR THER HELD BY THE ASSESSING OFFICER THAT SINCE ASSESSEE HAD ADMITTED ONLY GROSS R ECEIPTS AT RS.31 66 080/- IN ITS PROFIT AND LOSS ACCOUNT AND FU RTHER ADMITTED UNDISCLOSED INCOME OF RS.8 00 000/- DURING SURVEY THE B ALANCE OF RS.8 32 244/- WAS FURTHER REQUIRED TO BE TAXED AS UNDI SCLOSED INCOME OF THE ASSESSEE. HE ACCORDINGLY MADE AN ADDITION OF RS.8 32 2 44/- TO THE RETURNED INCOME. 4. ON APPEAL CIT(A) ESTIMATED OF INCOME AT 38% OF THE GROSS RECEIPTS AT RS.18 45 026/- THEREAFTER HE HAS GIVEN DED UCTION TOWARDS INTEREST AND REMUNERATION TO PARTNERS AT RS.6 74 486/- DETERMINING THE INCOME AT RS.11 70 540/-. FURTHER THE ASSESSEE HAS ALREA DY DISCLOSED INCOME AT RS.8 35 250/- IN ITS RETURN THE BALANCE OF R S.3 35 290/- IS 3 3 SUSTAINED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE ASSESSMEN T YEAR 2006-07. AGAINST THIS BOTH THE PARTIES ARE IN AP PEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS NOT SUPPORTED BY PROPER VOUCHERS AND BILLS . THE SAME FACT WAS ADMITTED B Y THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE L OWER AUTHORITIES. HENCE THE INCOME OF THE ASSESSEE HAS TO BE ESTIMATED ON REASO NABLE BASIS. IN THE INTEREST OF JUSTICE WE DIRECT THE ASSESSING O FFICER TO ESTIMATE THE INCOME AT 35% OF THE GROSS RECEIPTS AND THER EAFTER GIVE DEDUCTION TOWARDS INTEREST AND REMUNERATION TO PARTNER S. 6. IN THE RESULT THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE IN ITA NOS.653 & 656/HYD/2009 ARE PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON : 19.3.2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 19 TH MARCH 2010 COPY FORWARDED TO: 1. THE ACIT CIRCLE-1 KARIMNAGAR 2. M/S HOTEL SAI LEELA RESIDENCY GODAVARIKHANI KARIMN AGAR 3. CIT(A)-III HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP