BANGAR RAJU PENMETSA,HYDERABAD V. ACIT, CENTRAL CIRCLE-1(4), HYDERABAD

ITA 896/HYD/2024

AI Insights

The case involves Bangar Raju Penmetsa, the Managing Director of M/s. KVR Consultancy Pvt Ltd, who appealed against the order of the Commissioner of Income Tax (Appeals)-11, Hyderabad. The appeal was related to the addition of Rs. 23,64,000 as unexplained income for the assessment year 2019-20, following a search and seizure operation under Section 132 of the Income Tax Act, 1961. The Tribunal considered the assessee's arguments and the documentary evidence provided, which included income returns and land records, and decided to remit the matter back to the Assessing Officer for a detailed examination of these documents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 36099 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SM-B
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U. MINI CHANDRAN
• Assessee Lawyers: P. MURALI MOHAN RAO
• Keywords: Opportunity of being heard
• Section: 132; 69A

Judgement Text

"आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ मɅ IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “SMC-B”, HYDERABAD BEFORE SHRI MANJUNATHA. G , ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA No. 896/Hyd/2024 (Ǔनधा[रण वष[ / Assessment Year: 2019-20) Bangar Raju Penmetsa, Hyderabad. [PAN : ACAPP1228P] Vs. ACIT, Central Circle-1(4), Hyderabad. अपीलाथȸ / Appellant Ĥ× यथȸ / Respondent Ǔनधा[ǐरती ɮवारा/Assessee by: Shri P. Murali Mohan Rao, AR राजè व ɮवारा/Revenue by: Shri U. Mini Chandran, Sr. AR सुनवाई कȧ तारȣख/Date of hearing: 18/12/2024 घोषणा कȧ तारȣख/Pronouncement on: 23/01/2025 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 04/09/2024 passed by the learned Commissioner of Income Tax (Appeals)-11, Hyderabad (“Ld. CIT(A)”), in the case of Bangar Raju Penmetsa (“the assessee”), assessee preferred this appeal. ITA No. 896/Hyd/2024 Bangar Raju Penmetsa Page 2 of 5 2. Brief facts of the case are that assessee, Mr. Bangar Raju Penmetsa, Managing Director of M/s. KVR Consultancy Pvt Ltd, filed his return of income for the AY 2019-20 on 29/08/2019 declaring a total income of Rs.2,45,000/-. A search & seizure operaƟon U/s. 132 of the Income Tax Act, 1961 (“the Act”) was conducted in the case of M/s. Sumeru Infrastructure Park and group cases on 08/02/2019. During the search & seizure proceedings cash amounƟng to Rs. 20,00,000/- was seized in the residenƟal premises of Smt. Dasari Sandhya Sree, who stated that the said amount belongs to Mr. Bangar Raju Penmetsa, assessee in the present case. Assessee also confirmed the statement given by Smt Dasari Sandhya Sree vide leƩer dated 1/3/2021. Further, during the course of search, an amount of Rs.3,64,000/- was also found at the residenƟal remises of assessee. 3. On being asked, assessee stated before the learned Assessing Officer that cash of Rs. 10,19,000/- was received from proceeds of agricultural crop and the balance of Rs. 13,45,000/- is out of his personal savings. However, in the absence of any verifiable documentary evidence, the learned Assessing Officer made addiƟon of Rs. 23,64,000/- as unexplained income U/s. 69A of the Act and assessed the total income at Rs. 26,09,000/-. Learned Assessing Officer also iniƟated the penalty proceedings while passing the assessment order. 4. Aggrieved, assessee preferred an appeal before the learned CIT(A) who sustained the addiƟon of Rs. 10,19,000/-, which was stated to have been received by assessee from proceeds of agricultural corp. However, learned CIT(A) granted a part relief of Rs. 3,00,000/- out of addiƟon of Rs. 13,45,000/- made on account of unsubstanƟated personal savings in previous years. Thus, learned CIT(A) partly allowed the appeal. Aggrieved, assessee is in appeal before the Tribunal. ITA No. 896/Hyd/2024 Bangar Raju Penmetsa Page 3 of 5 5. Learned Authorized RepresentaƟve (“learned AR”) submiƩed that learned CIT(A) did not consider the returns of income for the earlier years ie., 2015-16 to 2018-19 as per which the assessee’s net income worked out to Rs. 31,56,802/-. He further submiƩed that the returns of income for the earlier years consƟtute documentary evidence to substanƟate the source of earlier year’s income. It was also submiƩed that Rs. 10,19,000/- is from sale proceeds of agricultural crops and the said amount was given to assessee by his father. However, the learned CIT(A) did not appreciate the documentary evidence submiƩed before him with respect to the sale proceeds of the agricultural crops as well as erred in not considering the returns of income files for the years as a proof of documentary evidence. 6. Learned Departmental RepresentaƟve (“learned DR”) vehemently argued in support of the decision taken by the lower authoriƟes. 7. We have gone through the record in the light of the submissions made on either side. The plea of the assessee is that the learned CIT(A) considered the returns of income filed for the years i.e., 2016-17 to 2018-19 and having accepted the returned income for those AYs, learned CIT(A) held that to the tune of such returned income, viz., Rs. 10,45,0000/- stood explained. On the same analogy the learned AR placed before us acknowledgment copies of assessee’s returns of income for the AYs 2015-16 and 2019-20as well and submits that the returned income is well substanƟated by the property held by the father of the assessee, and therefore, this amount may also be taken into consideraƟon for explanaƟon of the sources towards the amounts added. Further, to substanƟate assessee’s claim of agricultural income, learned AR also placed before us copies of Title Deeds and PaƩadar Passbooks which evidences the land holdings of assessee’s father. 8. On a perusal of the documentary evidence placed before us, we are of the opinion that learned CIT(A) ought to have consider these documentary ITA No. 896/Hyd/2024 Bangar Raju Penmetsa Page 4 of 5 evidence ie., returns of income filed for the years ie., 2015-16 and 2019-20 also on the same fooƟng as he considered the income returned for the AYs 2016-17 to 2018-19, having regard to the land record evidencing the agricultural land holdings of assessee’s father and appreciate the submissions of the assessee while adjudicaƟng the assessee’s appeal which lacks in this case. 9. Therefore, we deem it fit to remit the maƩer to the file of learned Assessing Officer for considering the documentary evidence furnished by the assessee in the light of the returns of income for the AYs 2015-16 and 2019-20 also, aŌer affording a reasonable opportunity of being heard to the assessee as per the principles of natural jusƟce. If the learned Assessing Officer finds source for the balance cash derivable from the agricultural lands of the father of the assessee, then he will delete the enƟre addiƟon. The grounds are answered accordingly. 10. In the result, appeal of the assessee is allowed as indicated herein above. Order pronounced in the open court on the 23rd January, 2025. Sd/- Sd/- (MANJUNATHA. G) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 23/01/2025 OKK ITA No. 896/Hyd/2024 Bangar Raju Penmetsa Page 5 of 5 Copy forwarded to: 1. Bangar Raju Penmetsa, C/o. P. Murali & Co., Chartered Accountants, 6-3- 655/2/3, Somajiguda, Hyderabad, Telangana-500082. 2. ACIT, Central Circle-1(4), Hyderabad. 3. Pr. CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. GUARD FILE. TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD "