INCOME TAX OFFICER, WARD-6(1), HYDERABAD V. HEMANTH KANTAMNENI, HYFDERABAD

ITA 1307/HYD/2024

AI Insights

The case involves Shri Hemanth Kantamneni, the respondent, who was initially assessed by the Income Tax Officer (ITO) for unexplained investments and expenditures during the assessment year 2017-18. The ITO made additions to the assessee's income based on unexplained investments in property and unexplained cash deposits during the demonetization period. The CIT(A) later deleted these additions, leading to the revenue's appeal to the Tribunal. The primary contention of the revenue was the CIT(A)'s alleged failure to consider a remand report from the ITO before passing his order. However, the Tribunal found that the remand report did not adversely affect the assessee's case, leading to the dismissal of the revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472555 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINATH SADANALA
• Assessee Lawyers: RAJESH VAISHNAV
• Keywords: Set aside; Unexplained investment

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.1307/Hyd/2024 (निर्धारण वर्ा/Assessment Year:2017-18) Income Tax Officer, Ward-6(1), Hyderabad. Vs. Shri Hemanth Kantamneni, Hyderabad. PAN:ANDPK6134F (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri Rajesh Vaishnav, C.A. रधजस व द्वधरध/Revenue by: Shri Srinath Sadanala, SR-DR सुिवधई की तधरीख/Date of hearing: 05/03/2025 घोर्णध की तधरीख/Pronouncement: 10/03/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Shri Hemanth Kantamneni (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 21.08.2024 for the A.Y. 2017-18. 2. The revenue has raised the following grounds : “ 1. The Ld. CIT(A) order is erroneous and is contradictory to the facts of the case. ITA No.1307/Hyd/2024 2 2. The Ld. CIT(A) erred in stating that remand report has not been submitted, whereas, remand report was already submitted before the date of appellate order. 3. The Ld. CIT(A) erred in not considering the remand report which was already submitted, while passing the appellate order. 4. Any other ground which may be urged at the time of hearing.” 3. The brief facts of the case are that the assessee is an individual, filed his Return of Income (“ROI”) for A.Y. 2017-18 on 13.11.2017 admitting total income of Rs.8,50,000/-. The case of the assessee was selected for limited scrutiny under CASS and notice u/s.143(2) of the Income Tax Act, 1961 ('the Act') dated 28.08.2018 was issued by the Learned Assessing Officer (\"Ld. AO\") to the assessee. During the assessment proceedings, various notices were issued by the Ld. AO calling explanation / documents from the assessee. However, the assessee did not respond to any of the notices issued by the Ld. AO. Consequently, on the basis of the information available on record and on the basis of information collected u/s.133(6) of the Act, the Ld. AO noted that the assessee had purchased a flat for Rs.1,35,90,000/-, out of which Rs.69,64,563/- was funded through loan from PNB Housing Finance Limited. Accordingly, the balance amount of Rs.66,25,397/- was considered as unexplained investment u/s.69 of the Act. The Ld. AO further observed that, the assessee had incurred expenditure of Rs.7,47,378/- towards payment of stamp duty / registration charges, which was also not explained. Accordingly, the Ld. AO added this amount also to the unexplained investment u/s.69 of the Act. Hence, the Ld. AO made a total addition of Rs.73,72,775/- u/s.69 of the Act. In addition, the Ld. AO found that during the period of demonetization i.e. 09.11.2016 to 31.12.2016, the assessee had deposited cash of Rs.29,50,000/- in Axis Bank and cash of Rs.3,04,999/- in Andhra Bank. Due to non-receipt of ITA No.1307/Hyd/2024 3 any explanation from the assessee, the Ld. AO treated the same as unexplained money u/s.69A of the Act and added the same to the total income of the assessee. Finally, the Ld. AO completed the assessment u/s.144 of the Act on 02.12.2019 at total income of Rs.1,14,77,774/-. 4. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) deleted all the additions made by the Ld. AO and allowed the appeal of the assessee. 5. Aggrieved with the order of Ld. CIT(A), the revenue is in appeal before the Tribunal. The primary contention of the revenue before us is that the Ld. CIT(A) erroneously mentioned in para no.4.2 of his order that the Ld. AO did not file any remand report, whereas the Ld. AO had in fact submitted a remand report on 18.08.2024. Thus, the Ld. CIT(A) had passed the impugned order on 21.08.2024 without considering the remand report. In support of his submission, the Learned Department Representative (\"Ld. DR\") had filed before us a copy of remand report dated 18.08.2024 and copy of order sheet and demonstrated that the remand report was sent by the Ld. AO on 18.08.2024. Finally, the Ld. DR submitted that the order passed by Ld. CIT(A) is without considering the remand report of Ld. AO, hence the same is bad in law and liable to be quashed and the issue may be set aside to the file of Ld. CIT(A) for passing a fresh order after considering the remand report of Ld. AO. 6. Per contra, the Learned Authorised Representative (\"Ld. AR\") relying on the order of Ld. CIT(A) submitted that, the Ld. CIT(A) after due consideration of all their submissions / evidences has deleted the addition made by the Ld. AO. The Ld. AR also invited our attention to para no.3(iii) to (v) of the remand report dated 18.08.2024 and submitted that during remand proceedings, the assessee had provided all the relevant documents and explanation before the ITA No.1307/Hyd/2024 4 Ld. AO also. Hence, on perusal of evidences / explanation filed by the assessee, the Ld. AO was convinced with the submission of the assessee. The same is evident from the remand report of the Ld. AO where he has not pointed out any adverse finding regarding both the additions made by him in his order dated 02.12.2019. Finally, the Ld. AR submitted that though the Ld. CIT(A) has not considered the remand report of Ld. Assessing Officer however, there is no adverse findings in the remand report of Ld. AO, which ultimately do not effect the findings of the Ld. CIT(A). Hence, the Ld. AR prayed before the bench to uphold the order of Ld. CIT(A). 7. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through the para no.4.2 of the impugned order, wherein the Ld. CIT(A) has mentioned that no remand report was received from Ld. AO. We have also gone through the para nos. 3(iii) to (v) of the remand report dated 18.08.2024 which are to the following effect : ITA No.1307/Hyd/2024 5 ITA No.1307/Hyd/2024 6 On perusal of above, we found that the Ld. AO accepted the explanation of the assessee in the remand report regarding the additions made by him in his order u/s.144 of the Act dated 02.12.2019. The revenue’s main objection is that the Ld. CIT(A) did not consider the remand report before passing the order. However, upon perusal of the remand report, it is evident that it did not contain any adverse comments against the assessee rather it supports the claim of the assessee. Hence, in our considered opinion, as the Ld. AO’s remand report did not contain the adverse comments, therefore, non- consideration of the same by Ld. CIT(A) has caused no prejudice to the interest of revenue because the substantive finding remain uneffected. Further, the revenue has failed to demonstrate any error on merits in the order of Ld. CIT(A). Accordingly, we do not find any infirmity in the order of Ld. CIT(A), ITA No.1307/Hyd/2024 7 hence, the revenue’s contention is rejected and the appeal of revenue is dismissed. 8. In the result, the appeal filed by the revenue is dismissed. Order pronounced in the open Court on 10th Mar., 2025. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad. Dated: 10.03.2025. * Reddy gp Copy of the Order forwarded to : 1. Hemanth Kantamneni, Flat No.301, Pallavi Estate II, 8-3-830/A, Yellareddyguda, Hyderabad-500 073 2. ITO, Ward-6(1), Hyderabad. 3. Pr. CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard File. BY ORDER, "