CHANDRA KANTA BUNG,HYDERABAD vs. INCOME TAX OFFICER, WARD-9(2), HYDERABAD

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ITA 1488/HYD/2019Status: DisposedITAT Hyderabad08 March 2022AY 2013-143 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that neither the assessee provided sufficient reasons for not producing the bills, nor did the revenue authorities verify the stock register. Therefore, the addition was restricted to a lumpsum of Rs. 3 lakhs, without setting a precedent.

What were the facts?

The assessee failed to produce fuel sale bills for her petrol pump business, leading the lower authorities to estimate her business income at 0.43% of gross receipts and make an addition of Rs. 13,18,285/-. The Assessing Officer had used three comparable instances for this estimation.

What were the issues?

Whether the estimation of business income based on a low percentage of gross receipts is justified when sale bills are not produced, and whether the revenue authorities took adequate steps to verify stock registers.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “SMC”, HYDERABAD

Before: SHRI S.S.GODARA

This assessee’s appeal for AY.2013-14 arises from the CIT(A)-7, Hyderabad’s order dated 03-06-2019 passed in case No.0089/CIT(A)-7/2016-17, involving proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

The assessee’s instant appeal suffers from eight days delay stated to be attributable to the reason(s) beyond her control. No rebuttal has come from the departmental side. The impugned delay is condoned therefore.

3.

It emerges during the course of hearing at the outset that both the learned lower authorities have estimated assessee’s business income at Rs.0.43% of her gross receipts resulting in addition of Rs.13,18,285/-. They have taken recourse to the impugned estimation for the sole reason that the assessee had failed to produce her corresponding fuel sale bills in petrol pump business in lower proceedings. Suffice to say, the Assessing Officer had quoted three comparable instances to make the impugned estimation @0.43%.

4.

I have given my thoughtful consideration to rival pleadings against and in support of the impugned estimation and find no reason to accept either parties’ arguments in entirety. This is for the sole reason that neither the assessee has been able to cite her cogent reasons in expressing her inability to produce all the corresponding sale bills nor the Assessing Officer and the CIT(A); as the case may be, have taken any effort to check the stock register figures in issue. Faced with this situation, I deem it appropriate that larger interest of justice would be met in case the impugned addition of Rs.13,18,285/- is restricted to a lumpsum figure of Rs.3 lakhs in the given facts and circumstances, with a rider that the same shall not be treated as a precedent. I order accordingly. Consequential computation to follow as per law.

5.

This assessee’s appeal is partly allowed in above terms.

Order pronounced in the open court on 8th March, 2022

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