ACIT, Central Circle-2, Hyderabad V. Sri P. Vishnu Vardhan Reddy, R.R.Dist

ITA 1030/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66408 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 04-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARILAL NAIK
• Keywords: Unexplained investment; Search and seizure
• Section: 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1030/HYD/2012 ASSESSMENT YEAR: 2007-08 ACIT, CC-2, HYDERABAD. .... APPELLANT VS. SRI P. VISHNU VARDHAN REDDY, R.R. DISTRICT. RESPONDENT PAN: ARFPP 3842 D APPELLANT BY : SHRI K. HARILAL NAIK RESPONDENT BY : NONE DATE OF HEARING : 17-10-2012 DATE OF PRONOUNCEMENT : 31-10-2012 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 29-3-2012 PASSED IN ITA NO.0132/CIT(A)/ GNT/09-10 AND IT PERTAINS TO THE ASSESSMENT YEAR 2007-08. IT IS SEEN FROM THE RECORD THAT THE NOTICE SENT TO THE ASSESSEE-RES PONDENT IN THE ADDRESS MENTIONED IN FORM NO.36 RETURNED UN-SERVED WITH THE POSTAL REMARK LEFT HENCE R TO SENDER. HENCE, WE PROCEED TO DISPOSE OF THE APPEAL ON MERIT AFTER HEARING THE LE ARNED DR . 2. THE DEPARTMENT HAS RAISED THE FOLLOWING EFFECTI VE GROUND. 2 ITA NO.1030 OF 2012 P. VISHNU VARDHAN REDDY, HYD.. THE CIT (A) IS NOT JUSTIFIED IN DELETING THE PROTECTIVE ADDITIONS MADE IN THE CASE OF THE ASSESS EE MERELY ON THE BASIS THAT THE ITAT HAS DISMISSED THE APPEAL OF SRI P. NARASIMHA REDDY WHERE THE SUBSTANTIVE ADDITIONS ARE MADE SINCE ITAT HAS A RIG HT TO RECALL THE ORDER PASSED AND THUS THE ISSUE HAS N OT REACHED FINALITY. 3. BRIEFLY THE FACTS ARE THE ASSESSEE IS AN INDIVID UAL. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUC TED IN THE BUSINESS PREMISES OF M/S. RATNA HOUSING AND ESTATES PVT. LTD., ON 15-12-2006. SIMULTANEOUSLY SEARCH OPERATION WAS AL SO CARRIED OUT IN THE RESIDENTIAL PREMISES OF SHRI P. NARASIMH A REDDY, THE M.D OF M/S. RATNA HOUSING AND PVT. LIMITED AND WH O ALSO HAPPENS TO BE THE BROTHER OF THE ASSESSEE. IN COUR SE OF SEARCH OPERATION, THE DOCUMENTS FOUND REVEALED PURCHASE OF SEVERAL AGRICULTURAL LAND IN THE NAME OF THE ASSESSEE. AS A CONSEQUENCE, NOTICES U/S 153C WAS ISSUED TO THE ASSESSEE CALLING UPON HIM TO FILE RETURNS OF INCOME. THE ASSESSEE IN RESPONSE T O THE NOTICES FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2001 -02 TO 2006- 07 DECLARING NIL INCOME. HOWEVER, FOR THE ASSESSME NT YEAR 2007- 08, HE FILED HIS RETURN OF INCOME DECLARING TOTAL I NCOME RS.6,30,106/-. IN COURSE OF ASSESSMENT PROCEEDINGS , WHEN THE AO ENQUIRED FROM THE ASSESSEE WITH REGARD TO THE PU RCHASE OF THE AGRICULTURAL LAND, THE ASSESSEE STATED THAT THE LAN D WAS PURCHASED AND REGISTERED IN NAME BY HIS BROTHER SRI P. NARA SIMHA REDDY. SRI P. NARASIMHA REDDY WAS ALSO EXAMINED BY THE AO. IN HIS SWORN STATEMENT, SRI P. NARASIMHA REDDY ADMITTED TH AT THE ENTIRE TRANSACTION OF PURCHASE OF AGRICULTURAL LAND WAS ON LY CARRIED OUT BY HIM IN HIS NAME OF HIS BROTHER. THE AO AFTER CO NSIDERING THE MATERIALS GATHERED AS A RESULT OF THE SEARCH OPERAT ION AND ALSO IN COURSE OF ENQUIRY CONDUCTED BY HIM, CAME TO A CONCL USION THAT THE AMOUNT OF RS.5,41,00,907/- INVESTED TOWARDS PUR CHASE OF 3 ITA NO.1030 OF 2012 P. VISHNU VARDHAN REDDY, HYD.. AGRICULTURAL LAND WAS THE UNEXPLAINED INVESTMENT O F SRI P. NARASIMHA REDDY AND ADDED U/S 69 OF THE ACT ON SUBS TANTIVE BASIS FOR THE ASSESSMENT YEAR 2007-08. THE SELF SAM E AMOUNT WAS ADDED ON PROTECTIVE BASIS AT THE HANDS OF THE A SSESSEE FOR THE ASSESSMENT YEAR 2007-08. APART FROM THIS, THE AO ADDED AN AMOUNT OF RS.1,23,25,957/- TOWARDS PROFIT EARNED FR OM THE SALE OF THE LAND AT THE HANDS OF SRI P. NARASIMHA REDDY ON SUBSTANTIVE BASIS AND AT THE HANDS OF THE ASSESSEE ON PROTECTIV E BASIS. THE ASSESSEE CHALLENGED THE ADDITIONS MADE ON PROTECTIV E BASIS BY FILING AN APPEAL BEFORE THE CIT (A). 4. IN COURSE OF HEARING OF APPEAL, THE CIT (A) FOUN D FROM RECORD THAT IN CASE OF SRI P. NARASIMHA REDDY, THE BROTHER OF THE ASSESSEE THE ASSESSMENTS MADE ON SUBSTANTIVE BASIS FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 WERE CONFIRMED BY THE CIT (A) VIDE HIS ORDER IN ITA NO.0137 AND 0138/CC- II,HYD/CIT(A)-I/09-10 DATED 29-1-2010. THE APPEALS FILED BY SRI P. NARASIMHA REDDY AGAINST THE AFORESAID ORDER OF C IT (A) WERE ALSO DISMISSED BY THE ITAT, HYDERABAD BENCH IN ITA NOS.503 AND 504/HYD/11 DATED 20-6-2011. THE CIT (A) THEREFORE H ELD THAT SINCE THE ADDITIONS MADE HAVE BEEN CONFIRMED IN THE SUBSTANTIVE ASSESSMENTS MADE IN THE CASE OF SRI P. NARASIMHA R EDDY, THE SELF SAME ADDITIONS MADE IN THE PROTECTIVE ASSESSME NTS OF THE ASSESSEE CANNOT BE SUSTAINED. 5. WE HAVE HEARD THE LEARNED DR AND ALSO PERUSED TH E MATERIAL ON RECORD. IT SEEN THAT THE SELF SAME ADDITIONS W ERE MADE AT THE HANDS OF THE ASSESSEES BROTHER SRI P. NARASIMHA RE DDY ON SUBSTANTIVE BASIS AS WELL AS AT THE HANDS OF THE AS SESSEE ON PROTECTIVE BASIS. THE ADDITIONS MADE ON SUBSTANTI VE BASIS AT THE HANDS OF ASSESSEES BROTHER SRI P. NARASIMHA REDDY STANDS CONFIRMED AFTER THE DISMISSAL OF THE APPEAL AGAINS T THE CIT (A)S 4 ITA NO.1030 OF 2012 P. VISHNU VARDHAN REDDY, HYD.. ORDER BY THE ITAT, HYDERABAD BENCH IN ITA 503 AND 504/HYD/2011 DATED 20-6-2011. SINCE THE ADDITIONS I N CASE OF SRI P. NARASIMHA REDDY HAVE REACHED FINALITY BY VIRTUE OF ITATS ORDER, THERE IS NO REASON TO SUSTAIN THE ADDITION M ADE ON PROTECTIVE BASIS IN CASE OF THE ASSESSEE. THE FIND ING OF THE CIT (A) IN THIS REGARD DOES NOT REQUIRE ANY INFERENCE F ROM US. WE THEREFORE UPHOLD THE SAME AND DISMISS THE GROUND RA ISED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31-10 -2012 SD/- SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 31 ST OCTOBER, 2012. COPY TO:- 1) ACIT, CC-2, 7 TH FLOOR, AAYAKAR BHAVAN, HYDERABAD. 2) SRI P. VISHNU VARDHAN REDDY, 1-106/3, STREET NO.2, BHAVANI NAGAR, NACHARAM, RR DISTRICT. 3) THE CIT (A), GUNTUR. 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR * 5 ITA NO.1030 OF 2012 P. VISHNU VARDHAN REDDY, HYD..