Itta/632/2006 Of D. Suresh Babu v. Income Tax Officer, Sangareddy, Medak Dist

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD MONDAY, THE FOURTH DAY OF SEPTEMBERTWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY INCOME TAX TRIBUNAL APPEAL No: 632 of2006 lncome Tax Tribunal Appeal Under Section 260 of the lncome Tax Act,'1961against the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' B',Hyderabad in ITA No.987/Hyd12003, for assessment Year 2000-01 dated 23-06-2006, preferred against the Order of the Commissioner of lncome Tax (Appeals)-2,Visakhapatnam, Camp at Hyderabad, Appeal No.01651CI(A)-2 VSP/2002-03, dated'13-05-2003, preferred against the Order of the lncome Tax Officer, Sangareddy, GIRtlNo.S-993, dated: 31-03-2003. Between: D. Suresh Babu, S-41, lsnapur Village, Patancheru lvlandal, Medak District. ...Appellant AND Income Tax Officer, Sangareddy, Medak District. ...Respondent ITTAMP. No: 217 of 2008 Petition under Section 151 CPC praying that in the circumstances stated inthe affidavit filed in support of the [petition, ]the High Court may be [pleased ]togrant stay of collection of disputed tax and interest of Rs. 5,91,495/- due for theassessment [year ]2000-0'1 pending disposal 0f the above appeal. Counsel for the Appellant: SRI DUNDU IilANMOHAN Counsel for the Respondent: SRI K. MAMATHA, Sr. SC FOR lT DEPARTMENT The Court delivered the following: JUDGMENT HONOURABLE SRI JUSTICE P.SAM KOSITYANDHON'BLE SRI JUSTICE LAXMI IYARAYANA ALISHETTY INCOME 1]A]('I'RIBUNAL APPEAI, NO.632 OF 2006 JUDGMENT: il). t I ou l,; \n.:ustke !,(Lxt t lontLlartt AltsJt.,ltt/) 'iht irrcscr I it1.r1.ical hirs l-rcen illcd under section 26O-A oflrii ()1nc ['i':;r ]Acr i!t(t I (1or shorL tllc "Act") aggrier,e(l by l)r-r,rrlcr [):rssc(l l]\r lncome Tax Appcllate 'lribunal, Bt:nclt lJ,iliri, i:rl;acl (jir; sir,rrt "'llibunarl") ir I'IA No.9tl7 ltlvrll2r-t.t.\.'i,,rr ri ..2.1 \ll , ?1)Or r i,,, rltt /\ssc:rst-l.l( rrr Y('itt-2000 2OOl .r. Wl Ir:n'rr lrr::rrd thc learnt.<l coLlusel Srr l)urciLrtfvir;rrr:;oIralr ic:rrrrr:r1 coLillsoI lor tl-rc appeilant zrrrrlrr,ls. [i.\1.rr,r:; ]t:, [j;trlncd ]Strritrr :lianding OounsrI for tl-r,! i' ii )a)ldc1t I i. Thc l;r:r:f lacts leading to filing of prcsent appeal are asi.i ;rric r t. 'l'hc zlpl;e I an'r is in thc business of prirchasr: ol'bullalocsb1' proculrng, them liom vanous placcs ilt the state of AlldhraI)r'.'rrli'sir [rlrr,, ]r(ilr ,.i: 'rls a;rtl sr:llilig iiqi, same r() M/s. Alkr:rhet.r'I:.>:pLrrts i,tci., s lri.:h is an arxp()rter ol- LTreat Lo varic)Lls ioroiqt)c()irrtries. [-l'he ]lI\', si,-,ck,/calt[(.arc Lrirnsp()rtccl in tltc rcgulzrr IIIt j'\( /,( l\ Iiii [| ]\ ,a.i:.t [:'] re Courseinmotorlorriesotlday-to-d:r}.basisandcaclltl.uckcattcon[ain [onll' ][8-9 ][buiialocs ][The ][bulfaloes ][$ ][hel ][trilllsl]ortcd ][rlr]rnotor lorrics/trucks [arc ][made ][to ][sllnd colilttltt,usl\ ][lilr ][mor(']than [1O ][hours ][at ][a ][strctch ][at-rd ][as ][most ][ol- ][tlli'sc ][lltrfi;rloes ][arc]aimost [at ][the last ][stage of ][their ][life ][Lheir ][(lal)ir( ][rtY ][to ][$ iLhstatrcl]such Iong [journcys ][whilc ][standing ][is ][mininrzr'1 ][u'h ][ich ][restrlt ][in]fatalitY [at the ][raLc ][of ][3o/o ][to ][7oh'] IIIt j'\( /,( l\ Iiii [| ]\ ,a.i:.t [:'] re Courseinmotorlorriesotlday-to-d:r}.basisandcaclltl.uckcattcon[ain [onll' ][8-9 ][buiialocs ][The ][bulfaloes ][$ ][hel ][trilllsl]ortcd ][rlr]rnotor lorrics/trucks [arc ][made ][to ][sllnd colilttltt,usl\ ][lilr ][mor(']than [1O ][hours ][at ][a ][strctch ][at-rd ][as ][most ][ol- ][tlli'sc ][lltrfi;rloes ][arc]aimost [at ][the last ][stage of ][their ][life ][Lheir ][(lal)ir( ][rtY ][to ][$ iLhstatrcl]such Iong [journcys ][whilc ][standing ][is ][mininrzr'1 ][u'h ][ich ][restrlt ][in]fatalitY [at the ][raLc ][of ][3o/o ][to ][7oh'] 5. In this [process, ][the ][appellant ][had ][pltrcl-rr:st:rl ][a ][total]bulfaloes [of ][15,O8l ][The ][appellant ][ltlcd ][return ][of ][itrr:oLrrc ][ltl ][r ][llic]Asscssmetlt [Year ][2O00-01 declaril.rg ][a ][tzt'xitblt' ttl<:omc ][ol]Rs. 1,25,84O/ [- ][and also has ][shou'n ][an ][agriculltural itlcorne ][of]JRs. 30,000/-. [The ][Assessir-rg ][Ofhcer ][(for ][short ]["AO ][) lrad ][tal<cn]up the [return ][of ][income ][for ][scrutiny ][and ][had ][raisccl ][a ][dor-ilrt]with rcgard [to ][total number ][of ][buffalocs ][prtrt:hast:ci ][which ][arc]15,O81 and [sold ][to M/s' ][Alkabeer ][Exports ][['td ][rvhich ][arc]numbered [13,949' ][Therefore'][ the ][AO addrcssed ][a lctter ][d:rted]i8.O2.2003 [to ][appellant to ][explain ][the ][reasot-rs ][u ][ith][ regard ][to]to M/stotal number [of ][buflalocs ][sold]thc discrePancY [rn]Alkabeer [trxPort ][Ltd' The ][appellanl ][furnisheci ][his ][explanatrot't]uid.eleLterdated06.03.2003th+onanavcragcols./oanin-rals*,ill die in transit [and ][said fatality ][shall ][be ][consic]ered ][lr'hile]computing [actual number ][of ][bufialoes ][which is ][as ][trtrder:-] 'I,)tal l)ur( ltils( o1 lrLrll;rloesr5,oB 1l-( ss;5(lir (l( acit rje(l7.5 4Iirrlttrrr'eI.r,.12 7 (). t\s pt.r (ltc cxp(.nriiLurc, thc total purchilsed vallrc c,f M/s.AIk:rbecr Exl:,or.Ls L[cl shou.n as Rs. 2,g5,97,2g31_. Along u,ithtlre s:ri.l rcpl'". tht' :rppc ant arso c-ncrosecr a certilrcatc issLrcdlrr I\47's. Al]< rlrt.er Intcrnational l_f<i., n.hich sho\\,s thlt thet:rtalitr..l' rlrc t.lrtr- ,[ l>uJ'ltrloes rvould bc at an aver.tse bt:t*.ccn3('1, Lo 7').,,, 'l'lte A() on consiclerertion of clarifications/r:xpler.ati.rrs p.virled b! the assessee, c.tmc to conclusion thatih(' ass('ssc(, has ltot macle any clairn of such loss due to thcclcarh ol thc :rnirnais rn rhe profit and loss u."o.ln, cncloscd tolhc rcturrr ol [jncontc ]or ir.r the Audit Report enciosed to thcrcturn. ['l-lrcr,:lirrc. ]ttre claim of deceascd animals tt Jo/onu rnbr:ring ,'51 is only an aftcrthought to explaiD thcd,screpant--ies arrd r1; ps16[ Lhc figures u,ith the infornrationrcccived from M/s.Atkabccr Exports Ltd. The AO did rror iicceptthe claim of appellant of death of 754 buffaloes and madc:rddition ol Fis. I 1 ,93,592/- r.vhich is estimated cosL o[.754buffaloes trr Rs. 1583 (per bulfaloJ iLnd finall_v determinc.dtheroL.rl incorre zr t lls. 13,19,422/- ulcle orcler dared 3t.03.2O03 7 . Aggrievcd [by ][thc order' ][datcd ][3 ][1 ]['03'2OO3 ][passcd ][trr ][r\( ][) ]['][hc apllellant [preferrcd ][appcal ][beforc ][the ][Commissiotict- 6f]Incomc [Tax ][(Appeal)-2' ][Visakhaptrtnam ][Thc ][Commi*<ir ]['trcr ][r ]['I]Incomc'la-x [(Appeals) ][(lor short' 'thc ][Appcllatc ][Co ][mtnisstotre ][r')]uidLe [orc)cr ][datcd ][13 ][05 ][2003 ][had ][substantialty ][allou ][ecl ][tht:]claim [of ][thc ][appellant ][whiie ][holding ][that ][the ][loss claimccl ][clr-te]to th€r [dearh o[ ][buffaroes ][during thc transit ][canrloL ][bc ][di:.icd ][i.]futl and [hcld loss ][at ][Rs' ][80'000/- ][and ][delelcd ][the ][trzrLanccr]amourlt [of ][Rs ][1 ][l,l3'5821-'] 13.05.2OO3, [the AO ][P: ][c[crrcd]8Aggrieved [bY ][lhe ][order ][dated]in LT.A.No [987l]appeal [bcforc ][the ][Tribunal' ][Hyderabad]uide [\ ]ord..' [dated]Ht'cl/ 2OO3 [The ][Appellate ][Tribunal']23.06 -2f)06 [set-aside ][the ][ordcr ][of ][the ][Appellate ][Comtnisstotrr-t]ancl rcstored [the ][order of ][AO'] 13.05.2OO3, [the AO ][P: ][c[crrcd]8Aggrieved [bY ][lhe ][order ][dated]in LT.A.No [987l]appeal [bcforc ][the ][Tribunal' ][Hyderabad]uide [\ ]ord..' [dated]Ht'cl/ 2OO3 [The ][Appellate ][Tribunal']23.06 -2f)06 [set-aside ][the ][ordcr ][of ][the ][Appellate ][Comtnisstotrr-t]ancl rcstored [the ][order of ][AO'] g. Aggrieved by [the ][order ][of ][Tribunal' ][dated ][23'06 2006' ][the]prcscnt [appeal ][is ][filed ][by ][the ][appellant'] 10. Learncd [counsel ][for ][the ][appellant ][conLended ][tl-rat thc]'lribunal had overlooked [trade ][practice ][and prudent ][business]cxpediencies [in ][this line ][of ][br'piness ][and ][not ][considcred]ccrtif-tcates [furnished ][by ][the ][appellant ][on ][the issue o[ ][avcrage]re.te [of ][fataliLy ][of buffaloes ][in transit ][of ][long ][journcy ][Fle ][lurthct'] \,. -) submitted that Triltunal [grosslv ][crred ][in ][not considering ][thc]crucr.ll la(:ttral cvidcrtcc [otl ][tllc ][lttcc ][clf ][asscssrncnt ][rccord ][and]pcr-vcrsc 1indin11 coIttral.r/ ro [iiiu'. ][l'lc ][s'ould further subnlit ][that]ccr-t illca te issu<:cl [br]thc Vctcrinitrl' Doctor clearly shows [thc]lzrlalitr, ratt oI;(t i,Lo1O(l,i, ol lrnim:rls during trzutsit [rvhich ][q':ls]also ignored. Ir: iirtall;.,subrnits that Tribunal is not.lustifie d [in]setting-asidc tlrcordcrol thc Tribunal and thus [pra,vei ][for]sett ing-asidt' thcrrrdcr clirted 23.06.2006 passcd by theAppellate Tri bttr-rirl L 1. Per contr:t, leart'red cottrtsel [lor ][the ][rcspondent ][sullmitted]that the ordcl passed i:r [t ]he ['l'ribr-tr-ral ][is]propcr a ncl thcq'l'ribr-tnal irlrs rct or-clt'cl collcltI rc.lsons u'hilesctting aside theorder o[ thc Appellate [Commissioncr ][and ][does ][not ][walrant]interfcrence blr this Bench. [The ][learned counsel ][for ][the]respondent rel'erred to rcasons [rccorded ][bv ][the ][Tribuntll ][at]paragraph-5 of Lhe order, particularly [the ][relevant ][portion]u'hich is as unrf cr:- "lt is ar-r admitte d fact that 15,08 1 buffaloes [were]purchrrse,C and what \t,as given to Alkabeer ExportsLt(1. Is orrly 13,949 buffakrcs. When Alkabeer [Exports]Ltd.. conlirrrs that I3,949 anim{s were [purchascd ][br]tl'rcm, u'e do r-rot fincl ar-ry [justification ]in [thc]explimaLi:rr.t of the :rssessee that the bulfaloes [u'cre]sold on [rveight ]basis. If actually the meat [was ][sold.]\All<abrlc'x Expolts Ltd, nray not have the [dctails ][o1'] inrliridutrl anirtrals. In rirrs casc, i;oth ttrc assesscc andAlkal;r:cr Exports Ltd. C,rnfirmecl rlrat I _?.q.+!) buffalc,csuerr: sold and there was a shorlage of 1.132 buff:riocsln rLciv o[ the above, rve are unable to accepl lhccxl;i:u'ration oi the assessee that lvhat ivas sokl ivasrnenr artcl nclt rnCividual anirnais. In our opinion, $.lrirtu.as sold w.cre only indiviclual animals and, therclorc.it is for thc assessee to explain wherc the l.lil2artimais hacl gone. In the abscnce vahclof any cxplarraiion, in our oprnion, the AO has rightly marlctl-re addition t2 t2Learned counsel for the respondent further poinred orrrth(' obser\,:rtion of thc Tribunalat paragraph-6, rvhich rt'acl:; i,:,u nrlcr "'lhc CIT(A) [ound thal thc loss claimcrl g:y tlieassessee duc to death oI buffaloes cannot bc clenicdin full. f.lowcvcr, he obsen,ecl that the loss u,as on theI'righcr side. When thc Ci'l'(A) says that. thr_. loss rvason titc highcr side, he dcleted thc additi,:n to thecxtcnt of Rs.ll,l3,5g2l_ without any basis. As wehave already observed, if at all there was death of theanimals, it should have been noticed by the assessceand details would have been available with theassessec. The asessee. being in thc regular trade ofpurchase of buffaloes frrr several lakh s of rupees,cannot claim that he has no details of death of theatrimals. In the absenco of any details rccaJdinedcalh oI animals. we do nor ttt anr.lustificJtiorr inthe clarnr of thc assesscc on estimate basis,,. "'lhc CIT(A) [ound thal thc loss claimcrl g:y tlieassessee duc to death oI buffaloes cannot bc clenicdin full. f.lowcvcr, he obsen,ecl that the loss u,as on theI'righcr side. When thc Ci'l'(A) says that. thr_. loss rvason titc highcr side, he dcleted thc additi,:n to thecxtcnt of Rs.ll,l3,5g2l_ without any basis. As wehave already observed, if at all there was death of theanimals, it should have been noticed by the assessceand details would have been available with theassessec. The asessee. being in thc regular trade ofpurchase of buffaloes frrr several lakh s of rupees,cannot claim that he has no details of death of theatrimals. In the absenco of any details rccaJdinedcalh oI animals. we do nor ttt anr.lustificJtiorr inthe clarnr of thc assesscc on estimate basis,,. 13. The ordt r ol't^c AO, clzrtecl 31.03.2003 ir.rdiczrrcs Lhat rireAO has consiclr_-rcrl thc mirrerial, cvirlcnc.c rn detail and recordccircasons lil- h s r.onclusion ()ltr.r t her hancl, the AppcllateCommissioncr uidc hrs order clatcclI3.O5.2003 hacl rclit-cl r_rponinlormation pr,rvi.icd by Ihc trsscssec rr,.hilc partly allou,int] thcappeal thert'by delcring a surn of Rs. I 1,13,Sg2/-. Hou,er.er, butthe Appcllale ,loutmissionc.r [-racl ncithcr referred to clet.tilcdobservatior-rs o1 (hc AO nor rccor-de<ircasorls u.hilc ovr-.rridingthr conclusi,rn:, of r lre AO )4. It is rcl,'r,anr lo relitr to ri ist.re pzrr-rc1, in the cerlifir;aLe,dated 08.04.2O03 rssuecl bt, VcLerinary Assistant Surgeonwherein, the name of the sigr-ratory is mentioned as An imalDoctor. The corrtention of thc counscl lor thc appellant theLt invierv of the cou, vlgililnte, thc buflalocs r.r,ere bcing transportedfor long distance \r,ithout an1, break during lhe transit andthus, it invariably result in death of some of buffaroes carrnotbe acceptcd in l.he abscnce ol any material to support tlie :;aidcontention and also that in fact, there u,as issue ol :o\4,vigilante during the year 2000-0 1 which is subject ma tte r ofthc present appr:a l. ! 15. For all tlre aloresaid reasons, \.\.e are of the firm vieu,that the question of rau, framed by the court, u,h e adnritting s:, .r( 8 , ['I'hus, ][the]disrnisse [d,] s to [be ][decicled ][in ][the ][negattve]lhc [trPPtlal' ][c"eserve]LO [lte ][trrrcl ][is ][accordirrgN']atp Pc [al ][deservcs]'lribunal. [No ][ord ][er ][as]conflrming [the ][order ][ol ][Lhe]Irendinq [miscellancous applicatioi'rs' ][if ][an]"] to [co ][s1s ][']shall [stancl] c [o [sccl] /ITRUE [COPY'I] @SECTION To, 1. The [lncome ][Tax ][Appellate Tribrrnal' Hyderabad ][Bench' B" ][Hyderabad']lnppeatsyz' [Visakhapatnam' camp ][at]lnppeatsyz' [Visakhapatnam' camp ][at]? The commissioner [of ]'"""t";;' '"""t";;' HYderabad HYderabadqqg. fn. tn"o'" [f ][ax ][Officer' ][Sangareddy ] 4. One One [ [to ] ][[to ] ][ ][[MANMOHAN' ]][Advocate ][[FoR ][lr ]][[lr ]][DEPARTT\^ENr ][[FoR ][lr ]][[lr ]][DEPARTT\^ENr ] 4. One One [ [to ] ][[to ] ][ ][[MANMOHAN' ]]sc [[FoR ][lr ]][[lr ]][DEPARTT\^ENr ][toPucl]sc [[FoR ][lr ]][[lr ]][DEPARTT\^ENr ][toPucl]5. [one ][cc ][to ][sRlK ][*^*;;:;' ] 6. [Two ][cD copies] kam Pr'\c, t HIGH COURT DATED:04 t09t2023 JUDGMENT lTTA.No.632 of 2006 THE APPEAL ISDISMISSED @e^*z\to'l>s' t S!T EI. 4t.,a.$*IJJoI!\[s],vgil l*