B. Venkateshwar Rao, Hyderabad V. Income Tax Officer, Ward-11(4), Hyderabad

ITA 1020/Hyd/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4746 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 14-05-2019
• Assessment Year: 2005-2006
• Appeal Filed On: 15-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIJU GUPTA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Capital asset
• Section: 142(1); 201; 69A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 1020 / HYD/ 201 7 (ASST. YEAR : 20 05 - 06 ) BARUMA VENKATESHWAR RAO, 1 - 105, JEEDIMETLA POST, HYDERABAD. V S . IT O , WARD - 11(4), HYDERABAD . P AN NO. AOJPB 8933 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO ADV. DEPARTMENT BY : SMT. NIJU GUPTA DR DATE OF HEARING : 14 / 05 /201 9 . DATE OF PRONOUNCEMENT : 17 / 0 5 /201 9 . O R D E R TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 1 , HYDERABAD , DATED 16 / 12 /201 6 FOR THE ASSESSMENT YEAR 20 05 - 06 . 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WITH REGARD TO SUSTENANCE OF ADDITION BY THE LD.CIT(A) OF RS. 11,57,550/ - 3 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL NOT FILED RETURN OF INCOME. AS PER THE INFORMATION RECEIVED BY THE ASSESSING OFFICER, IT IS NOTICED THAT THE ASSESSEE HAD INVESTED AN AMOUNT OF RS. 11,57,550/ - IN SB ACCOUNT OF ANDHRA BANK DURING THE 2 ITA NO. 1020 / HYD /201 7 ( BARUMA VENKATESHWAR RAO ) F.Y. 2004 - 05 RELEVANT TO THE A.Y. 2005 - 06 . AS THE ASSESSEE HAS NOT ASSESSED TO TAX, A NOTICE U/S. 142(1) DATED 26/11/2007 WAS ISSUED FOR REQUESTING HIM TO FILE RETURN OF INCOME. AS THERE IS NO RESPONSE TO THE NOTICE, AGAIN SHOW CAUSE NOTICE WAS ISSUED. THE ASSESSEE NEITHER APPEARED NOR FILED ANY REPLY TO THE NOTICE, THEREFORE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT BY CONSIDERING THE SAME AS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT ON 20/12/2007 . 4 . ON APPEAL, LD.CIT(A) DELETED THE ADDITION TO THE EXTENT OF RS. 7.7 0 LAKHS ON THE GROUND THAT THERE IS AN EVIDENCE TO THE EXTENT OF THE ABOVE AMOUNT AND CONFIRMED THE ADDITION OF RS. 3,87,550/ - . FOR THE SAKE OF CONVENIENCE, THE ORDER OF THE LD.CIT(A) IS EXTRACTED AS UNDER: - 6.2 IT IS STATED THAT THE CASH DEPOSITS ARE PRIMARILY ON ACCOUNT OF PROCEEDS FROM SALE OF AGRICULTURAL LAND BELONGING TO THE FAMILY. THE LAND WAS NOT A CAPITAL ASSET, SALE PROCEEDS OF WHICH ARE CHARGEABLE TO TAX, BECAUSE THE LAND IS SITUATED IN JEEDIMETLA VILLAGE. THOUGH THIS WAS CONVERTED INTO A MU NICIPALITY IN 2001, IT WAS NOT NOTIFIED FOR THE PURPOSES OF SECTION 2(14)(III)(B), BESIDES BEING BEYOND THE NOTIFIED PERIPHERY OF HYDERABAD/SECUNDERABAD MUNICIPAL CORPORATION. AS A RESULT, IT WAS STATED THAT THESE SALE PROCEEDS DEPOSITED WERE NOT TAXABLE A NYWAY. IT IS SEEN, HOWEVER, FROM THE COPY OF THE REGISTERED SALE DEED FURNISHED THAT THE SALE I CONSIDERATION ATTRIBUTED TO THIS LAND WAS RS. 7,70,000/ - , WHILE THE AGGREGATE CASH DEPOSITS NOTICED IN THE ACCOUNT WAS R S .11,57, 550 / - PERUSAL OF THE ACCOUNT STA TEMENT FURTHER SHOWS THAT THE DEPOSITS - MAINLY RS. 5 ,28,7S0/ - AND RS. 5 ,66,000/WERE CREDITED TO THE ACCOUNT ON 05/04/2004 AND 11/09/2004 RESPECTIVELY, WHILE THE SALE DEED IS DATED 30/08/2004. THE EXPLANATION OF THE LD. A.R. DOES NOT ADDRESS ITSELF TO THESE CONTRADICTORY DATA POINTS. EVEN IF IT IS ASSUMED - AS A MEASURE OF BENEFICIAL CONSTRUCTION, THAT THE FIRST RECEIPT WAS AN ADVANCE RECEIVED FIVE MONTHS EARLIER, WITH THE 3 ITA NO. 1020 / HYD /201 7 ( BARUMA VENKATESHWAR RAO ) REMAINING AMOUNT PAID WITHIN 10 DAYS OF REGISTRATION, THE FACT REMAINS THAT STATED SALE CONSIDERATION IS ONLY RS. 7. 70 LAKHS. FURTHER, IT IS BY NO MEANS SELF - EVIDENT THAT THE SALE CONSIDERATION WAS ENTIRELY RECEIVED INTO ASSESSEES BANK ACCOUNT BECAUSE HE WAS THE ONLY PERSON WITH A BANK ACCOUNT, AND IN FACT THE SALE CONSIDERATION HAD TO BE NECESSARILY APPROPRIATED BETWEEN FOUR INDIVIDUALS. THE PROFILE OF THE FAMILY WITH REGARD TO THE INTER SE DISTRIBUTION OF AVAILABLE WEALTH IS NOT AVAILABLE TO GRANT THIS ASSUMPTION. UNDER THE CIRCUMSTANCES, CONSIDERING THE EFFLUX OF TIME, AND THE IMPROBABIL ITY OF A BETTER RESOLUTION, AND GRANTING THE ASSESSEE BENEFIT OF DOUBT, IT IS HELD THAT CASH DEPOSITS TO THE EXTENT OF RS.7.70 LAKHS ALONE ARE EXPLAINED BY THE SALE DEED, AS RECEIPTS WHOSE TAXABILITY IS NOT ESTABLISHED. THE REMAINING SUM OF RS 3,87,550/ - , DOES NOT GET EXPLAINED BY THE SUBMISSIONS MADE. THE ADDITION OF RS.11,57,550/ - MADE U/S 69A IS, THEREFORE, REDUCED TO RS 3,87,550/ - 5. AS AGAINST THE ABOVE ADDITION SUSTAINED BY THE LD.CIT(A), THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THIS TRIBUNAL. 6. LD. C OUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS ONLY HAVING AGRICULTURAL INCOME , T HERE IS NO OTHER INCOME, THEREFORE, WHATEVER AMOUNT DEPOSITED IN THE BANK ACCOUNT HAS TO CONSIDERED AS IT RELATES TO AGRICULTURAL INCOME. HE ALSO RELIED ON THE JUDGMENT S OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SMT.P.K. NOORJAHAN (237 ITR 570) AND CIT VS BHARAT ENGINEERING (83 ITR 187) . 7. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD.CIT(A). 8 . I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW . 4 ITA NO. 1020 / HYD /201 7 ( BARUMA VENKATESHWAR RAO ) 9 . IN THIS CASE, THE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF RS. 3,87,550/ - ON THE GROUND THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE FOR THE DEPOSIT IN THE BANK ACCOUNT . THE ASSESSEE NEITHER EXPLAINED THE SOURCE NOR ANY REA SONABLE EXPLAN ATION WAS GIVEN BEFORE THE LD.CIT(A) AND THEREFORE, THE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER TO THAT EXTENT . BEFORE ME, THE ASSESSEES COUNSEL SAYS THAT WHEN THE ASSESSEE IS NOT HAVING ANY OTHER SOURCE AND HIS ONLY SOURCE IS SELLING OF AGRICULTURAL LAND , THEREFORE WHATEVER AMOUNT DEPOSITED IN THE BANK ACCOUNT SHOULD BE CONSIDERED AS IT IS RECEIVED FROM THE SALE CONSIDERATION OF AGRICULTURAL LAND. IT IS A FACT THAT THE ASSESSEE HAS SOLD THE AGRICULTURAL LAND FOR A CONSIDERATION OF RS. 7.7 0 LAKHS , BUT DEPOSITED AMOUNT IS RS. 11,57,550/ - . THE ASSESSEE IS NOT ABLE TO EXPLAIN WHAT IS THE SOURCE FOR REMAINING BALANCE OF RS . 3,87,550/ - , THEREFORE, THE EXCESS AMOUNT DEPOSITED BY THE ASSESSEE CANNOT BE CONSIDERED AS IT IS THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. SO FAR AS CASE - LAWS RELIED ON BY THE ASSESSEES COUNSEL, HAVE NO RELEVANC Y TO THE FACTS OF THE CASE . THUS, THIS APPEAL FILED BY THE ASSESSEE I S DISMISSED. 5 ITA NO. 1020 / HYD /201 7 ( BARUMA VENKATESHWAR RAO ) 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 17 TH DAY OF MAY , 201 9 . S D/ - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 17 TH MAY , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE - BARUMA VENKATESHWAR RAO, 1 - 105, JEEDIMETLA POST, HYDERABAD . 2. THE REVENUE - ITO, WARD - 11(4), HYDERABAD. 3. THE PR. CIT - 5, HYDERABAD. 4. THE CIT(A) - 11 , HYDERABAD . 5. THE D.R . , HYDERABAD. 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, HYDERABAD .