Is there a requirement for the AO to estimate the turnover if the sale of property is identifiable?

This Income Tax Appellate Tribunal case concerns whether an Assessing Officer (AO) is permitted to estimate a company's turnover when the sale of property is clearly identifiable. The assessee argued that the AO should not estimate turnover if the property sales are distinct and their values can be precisely determined. The tribunal reviewed the grounds for appeal, which included the AO's confirmation of an estimated turnover figure despite the availability of actual sales data.

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH “SMC”, HYDERABAD

BEFORE SHRI A. MOHAN ALANKAMONY,
ACCOUNTANT MEMBER

ITA No.1904/Hyd/2019
Assessment Year:2009-10

Sri Surya Constructions,
Hyderabad.
PAN: ABKFS 1402 P
(Appellant) 

Vs. 

Income Tax Officer,
Suryapet.
(Respondent)

Assessee by: Shri S. Rama Rao
Revenue by: Shri A. Venkata Rao, DR

Date of hearing: 15/03/2021
Date of pronouncement: 21/06/2021

ORDER

PER A. MOHAN ALANKAMONY, AM.:

This appeal is filed by the assessee against the order of the Ld. CIT (A)-3, Hyderabad in appal No. 0890/ITO/Syp/CIT (A)-3/2014-15, dated 20/05/2019 passed U/s. 143(3) r.w.s 147 and U/s. 250(6) of the Act for the AY 2009-10.

2. The assessee has raised four grounds in its appeal and they are extracted herein below for reference:-

“1. The order of the CIT (A) is erroneous both on facts and law.

2. The Ld. CIT (A) erred in confirming the action of the AO in estimating the turnover at Rs. 1,21,46,655/- without considering the actual sales effected during the previous year.

3. The Ld. CIT (A) ought to have considered the fact that the sale of properties during the year are identifiable and there is no requirement for the Assessing Officer to estimate the turnover.

4. Any other ground that may be urged at the time of hearing.”

3. At the outset, the Ld. AR submitted before me that there is a delay of 122 days in filing the appeal before the Tribunal. In this regard, the assessee’s Counsel had submitted a petition for condonation of delay wherein the reasons for filing the appeal beyond the prescribed time limit was explained. For reference, the relevant portion from the affidavit is extracted herein below: -

“…………During the relevant period the Chartered Accountant of the petitioner firm was pre-occupied with the prepareation and filing of return of income the last date for which was 31/8/2019. The order of the Ld. CIT (A) got mixed up with other filed and was lost sight off. When the AO was pressurizing for payment of demand, consequent to the disposal of first appeal, the matter of receipt of appellate order was recollected. They searched the office record but the order could not be traced. Therefore, the Chartered Accountant obtained a copy of the appellate order of CIT (A) from the office of the AO. The appeal institution fees was immediatepaid on 20/12/2019. The preparation of appeal before the Tribunal entrusted to an Advocate at Hyderabad. Sri S. Rama Rao, Advocate underwent cataract surgery on 24/12/2019 and he was not attending the office since 21/12/2019. The appeal was prepared on 27/12/2019 and the same is being filed before the Hon’ble Tribunal on 27/12/2019. There is a delay of 122 days in filing the appeal. The appellant humbly submits that the delay is for the reasons submitted above……….”

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