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Income Tax Appellate Tribunal, “C ” BENCH, CHENNAI
Before: SHRI A.MOHAN ALANKAMONY & SHRI. G. PAVAN KUMAR
आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:
The appeal filed by the assessee is directed against order of Commissioner of Income-tax (Appeals)-8, Chennai in ITA No.79/2011-
ITA No.2043/Mds/2015. :- 2 -:
12, Dated 31.08.2015 for the assessment year 2000-2001 passed u/s. 143(3) and 250 of the Income Tax Act, 1961.
The assessee raised only one substantive ground in respect of presumptive taxation and estimation of income at 8% instead of 12% determined by the Assessing Officer.
The Brief facts of the case are that the assessee is in the business of Real Estate and filed return of income on 30.11.2000 with Total loss of �5,06,390/- and the return was processed u/s.143(1) of the Act and as the case was selected under scrutiny and notice was issued. The Assessing Officer determined income u/sec144 of the Act dated 10.02.2003 at �33,12,376/-. The Assessing Officer completed assessment in the absence of any evidence and estimated 20% of gross sales at �33,12,376/- as assessed income and raised the demand. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) by orders in /07-08, Dated 07.03.2008 relied on the ITAT order in assessee own case dated 26.08.1998 for the assessment year 1998-99 and estimated the income at 12% of gross sales. Aggrieved, the assessee preferred an appeal before the Tribunal, and the Tribunal in ITA No.1144/Mds/2008 dated 03.03.2009 remitted the matter back to ITA No.2043/Mds/2015. :- 3 -:
the file of the Assessing Officer. Presently, the Assessing Officer as
per the directions of the ITAT posted the case for hearing. The ld.
Authorised Representative of assessee filed details explaining �1,26,17,760/- was incurred towards direct expenditure and produced break up of expenses to the extent of �51,57,089/- and for other expenditures, could not produce bills. Further, the ld. Authorised Representative submitted that the Accounts of the Company are Audited and due to survey operations, the Books of Accounts and other records are impounded by the Income Tax Department. The Assessing Officer inspite of giving adequate opportunity, the assessee could not provide any evidence to support the explanations and relied on the Commissioner of Income Tax (Appeals) order pertaining to the assessment year 1998-99 and adopted 12% of gross sales as reasonable estimation of income and made Best Judgment Assessment u/Sec. 144 of the Act dated 5.4.2011 assessed income of �19,87,426/- and raised demand. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals)
In the appellate proceedings, the ld. Authorised Representative reiterated his submissions made in assessment proceedings and the ld. Assessing Officer relied on ITAT order in ITA No.2043/Mds/2015. :- 4 -:
assessee own case for assessment year 1998-99 and that the assessee is same and same business is carried on, estimated income @12% of gross sales and such estimation is on higher side and the assessee is passing through financial crisis and due to the adverse circumstances not in a position to produce any documentary evidence and pleaded for reduction of estimation at 8% as per the provisions of Sec. 44AD of the Act. But the ld. Commissioner of Income Tax (Appeals) upheld the order of the Assessing Officer. Aggrieved by the order of the Commissioner of Income Tax (Appeals), the assessee assailed an appeal before the Tribunal.
Before the Tribunal, the ld. Authorised Representative reiterated his submissions made before Assessing Officer and Commissioner of Income Tax (Appeals) and substantiated his grounds with arguments that the Commissioner of Income Tax (Appeals) has erred in confirming the estimation at 12% inspite of assessee demonstrated the circumstances and rejection of Books of Accounts.
The business of the assessee is passing through the toughest situations in the real estate market and pleaded for estimation at 8% of gross sales instead of 12% as determined by ld. Assessing Officer and prayed for allowing the appeal.
ITA No.2043/Mds/2015. :- 5 -:
Contra, the ld. Departmental Representative relied on the orders of the lower authorities and vehemently opposed to the grounds of the assessee.
We heard the rival submissions and perused the material on record and also provisions of law. The ld. Authorised Representative has substantiated his claim for non - production of Bills in Assessment proceedings and the assessee is fighting second round of litigation with the Income Tax Department were the Assessing Officer has estimated income at 20% of gross sales due to non availability of evidence. The ld. Commissioner of Income Tax (Appeals) following the order of the ITAT in assessee’s own case for the assessment year 1998-99 reduced the estimation to 12%. The assessee aggrieved by the order of CIT(A) filed an appeal with the Tribunal. The Tribunal in dated 03.03.2009 remitted the issue back to the file of the Assessing Officer. The Assessing Officer passed order u/s.144 of the Act estimating at 12% of gross sales and Commissioner of Income Tax (Appeals) has endorsed the findings of the Assessing Officer. The ld. Authorised Representative has expressed the genuine hardship of the company, passing through financial difficulties and estimation at 12% is much higher and requested for reduction of ITA No.2043/Mds/2015. :- 6 -:
estimation to 8% as per the provisions of Sec.44AD. We considering the apparent facts and also circumstances of estimation at 12% pertaining to earlier assessment years and the current market conditions changed due to slump in real estate business. In our opinion the order of the Commissioner of Income Tax (Appeals) cannot be sustained and we set aside the order and direct the Assessing Officer to estimate income at 8% on gross sales and pass the order.
In the result, the appeal of the assessee in is allowed.
Order pronounced on Wednesday, the 17th day of February, 2016 at Chennai.