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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLE
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON’BLE ACCOUNTANT MEMBER ITA No. 267/VIZ/2016 (Asst. Year : 2008-09) Alla V.S.N. Chowdary, vs. ITO, Ward-1, D.No. 2-220, Sarada Nagar, Anakapalle. Narsipatnam, Visakhapatnam. PAN No. AHGPA 9423 L (Appellant) (Respondent)
Assessee by : Shri Y.Aappa Rao – FCA. Department By : Shri V. Appala Raju – Sr.DR
Date of hearing : 24/04/2018. Date of pronouncement : 26/04/2018.
O R D E R PER V. DURGA RAO, JUDICIAL MEMBER
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-2, Visakhapatnam, dated 03/02/2016 for the Assessment Year 2008-09. 2. The only dispute in this appeal is with regard to addition of Rs. 1,78,093/-. The assessee is in the business of lorry transport contracts, admitted total income of Rs.9,94,175/-. The case of the assessee was selected for scrutiny and the Assessing Officer estimated the income from lorry business at 6%, as against 4.7%
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admitted by the assessee, as a result, addition of Rs. 2,88,175/- was made. The Assessing Officer also noted that the assessee was in the business of sand and gravel and purchased sand and gravel to the tune of Rs.50,63,900/-, but the sale was not admitted. Therefore, sale value was estimated at 20% of the purchases made of Rs.60,76,680/- and estimated the profit at 17% on the said sales. Accordingly, an addition of Rs.9,11,502/- was made. 3. On appeal, ld. CIT(A) by considering the facts and circumstances of the case, estimated the income at 5.5% of the gross receipts and directed the Assessing Officer to re-compute the income of the assessee. For the sake of convenience, the relevant portion of the ld. CIT(A)’s order is extracted as under:- “4.1 I have considered the submissions and he details flied along with the written submission. From the details filed, it is evident that the expenditure claimed for the subject year was substantially higher than the corresponding expenditure in the earlier years. The assessee has not filed the vouchers and other evidence though it was claimed that the expenditure was incurred in cheque. It is also noted that the assessee admitted receipts on transport of gravel and sand. It was claimed that the assessee was not engaged in trading in gravel and sand but only transporter of gravel and sand. But the gross receipts was said to include cost of gravel and sand. The profit and loss account show separate payments have been made to the gravel suppliers. No evidence was adduced that only the cost of gravel and sand was embedded in the gross receipts, though the AO had raised the issue in the show cause notice Even during the appellate proceedings, the assessee has not adduced any specific information in this regard. As these issues have not been clarified, the decisions relied on by the assessee would not be
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applicable. Therefore, taking into consideration the overall facts and circumstances, I find that the AO is justified in disbelieving the claim of expenditure, and I consider it fair and reasonable to estimate the income at 5.5% of the gross receipts. Accordingly the AO is directed to re-compute the income.”
Ld. counsel for the assessee has submitted that direction for re-computation of income to the Assessing Officer at 5.5%, is on higher side, which may be reduced. 5. Ld. Departmental Representative strongly supported the orders passed by the authorities below. 6. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. 7. We find that ld. CIT(A) after considering all the materials placed on record, estimated the income at 5.5%, in our opinion, is fair and reasonable. Therefore, we find no infirmity in the order passed by the ld. CIT(A). Thus, this appeal filed by the assessee is dismissed. 8. In the result, appeal filed by the assessee is dismissed. Order Pronounced in open Court on this 26th day of April, 2018.
Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated : 26th April, 2018.
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vr/- Copy to: 1. The Assessee - Alla V.S.N. Chowdary, D.No. 2-220, Sarada Nagar, Narsipatnam, Visakhapatnam. 2. The Revenue – ITO, Ward-1, Anakapalle. 3. The CIT-2, Visakhapatnam. 4. The CIT(A)-2, Visakhapatnam. 5. The D.R., Visakhapatnam. 6. Guard file. By order
(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.