Dy. Commissioner of Income Tax, Hyderabad V. Sri L. Veera Raghava Rao, Vijayawada

ITA 1160/HYD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6318 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Search and seizure; Period of limitation; Condonation of delay
• Section: 50C; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC) : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA.NO.1160/HYD/2013 ASSESSMENT YEAR 2007-2008 THE DCIT, CENTRAL CIRCLE-3, HYDERABAD. VS. MR. L. VEERA RAGHAVA RAO, VIJAYAWADA. PAN AAMPL1674R (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.28/HYD/2016 ARISING OUT OF ITA.NO.1160/HYD/2013 - ASSESSMENT YEAR 2007-2008 (LATE) L. VEERA RAGHAVA RAO, REPTD. BY LH MR. LINGAM RAVINDRA RAO, VIJAYAWADA. PAN AAMPL1675Q VS. THE DCIT, CENTRAL CIRCLE-3, HYDERABAD. (APPELLANT) (RESPONDENT) FOR REVENUE : MR. K.J. RAO FOR ASSESSEE : MR. M. CHANDRAMOULESWARA RAO DATE OF HEARING : 21.06.2016 DATE OF PRONOUNCEMENT : 12.08.2016 ORDER THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE ORDER PASSED BY THE CIT(A)-V, HYDERABAD. BY WAY OF C ROSS- OBJECTION, FILED LONG AFTER THE PERIOD OF LIMITATION (T IME BARRED BY 910 DAYS) ASSESSEE CONTENDS THAT THE CIT(A) ERRED IN M AKING FRESH ADDITIONS IN THE ASSESSMENTS MADE UNDER SECTION 1 53A OF THE I.T. ACT, 1961 WITHOUT ANY INCRIMINATING MATERIAL F OUND DURING THE SEARCH AND ALSO SUBMITTED THAT THE ASSESSMENT O RDER IS NULL AND VOID SINCE IT WAS PASSED WITHOUT NOTIFYIN G THE CHANGE OF JURISDICTION OF THE ASSESSING OFFICER. ASSESSEE HOWEVER DID NOT 2 ITA.NO.1160/H/2013 & C.O.NO.28/H/2016 MR. L. VEERA RAGHAVA REDDY, VIJAYAWADA. FILE ANY AFFIDAVIT TO EXPLAIN THE REASONS FOR THE DELA Y IN FILING THE CROSS OBJECTIONS. UNDER THESE CIRCUMSTANCES, CROSS-OBJ ECTIONS FILED BY THE ASSESSEE ARE REJECTED AS BARRED BY LIMI TATION. IN FACT, DEFECTS WERE POINTED OUT VIDE DEFECT MEMO SENT ON 17.06 .2016 BUT THE ASSESSEE DID NOT COME FORWARD WITH ANY PETITION /AFFIDAVIT FOR CONDONATION OF DELAY AND ADDITIONAL FORM NO.36A W AS ALSO NOT FILED IN ORIGINAL. THUS ONLY THE APPEAL FILED B Y THE REVENUE IS TAKEN-UP FOR CONSIDERATION. THE ONLY GROUND URGED BY THE REVENUE IS AS UNDER : 2. THE LD. CIT(A) ERRED BOTH IN FACTS AND IN LAW I N DELETING THE PROTECTIVE ADDITION TOWARDS UNEXPLAINE D INVESTMENT AS THE ADDITION MADE IN THE HANDS OF SRI L. TULSI PRASAD ON SUBSTANTIVE BASIS IS ALSO DELETED B Y THE LD. CIT(A), THE PRO-RATA SHARE OF UNEXPLAINED INVESTMENT SHOULD HAVE BEEN SUSTAINED IN THE HANDS OF ASSESSEE. 2. CONSEQUENT TO THE SEARCH AND SEIZURE OPERATIONS CONDUCTED IN THE CASE OF AMR CONSTRUCTIONS GROUP ON 16.12.2008, IN ORDER TO VERIFY CERTAIN INCRIMINATING EVIDENCES FOUND DURING THE COURSE OF SEARCH OPERATION, SEARCH WAS ALSO CONDUCTED IN THE CASES OF MR. L. TULSI PRASAD AND OTH ERS WHEREIN THE ASSESSEES CASE WAS ALSO COVERED. THIS GROUP WAS CENTRALISED WITH THE DCIT, CENTRAL CIRCLE-7, HYDERABAD. NOTICE UND ER SECTION 153A WAS ISSUED TO THE ASSESSEE ON 19.06.2009 CALLING FOR THE RETURNS OF INCOME FOR THE A.YS. 2003-04 TO 2008-09. IN RESPONSE THERETO, THE ASSESSEE DECLARED INCOME OF RS.2,22,500 F OR THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF EXAMINATION OF THE ACCOUNTS ETC., THE ASSESSING OFFICER NOTICED THAT MR. L. TULSI PRASAD WAS PREVIOUSLY TENANT IN SARIKONDA MANSION, SA GAR COOPERATIVE SOCIETY AND HE HAD LEFT SOME LOOSE PAPER S AT THE PREMISES ON THE DATE OF SEARCH. ON VERIFICATION OF TH E LOOSE SHEETS 3 ITA.NO.1160/H/2013 & C.O.NO.28/H/2016 MR. L. VEERA RAGHAVA REDDY, VIJAYAWADA. SEIZED, A RECEIPT DATED 31.07.2006 WAS FOUND TO HAVE BEEN ISSUED BY MR. G. SRINIVASA BABU IN CONNECTION OF THE TRANSACT IONS RELATING TO THE SALE OF LAND SITUATED AT KUKATPALLY WHI CH INDICATES THAT AN AMOUNT OF RS.92 LAKHS WAS PAID TOWARDS REGULARI SATION OF LAND UNDER URBAN LAND CEILING ACT. MR. G. SRINIVASA BABU HAS STATED THAT THE SAID LAND WAS SUBSEQUENTLY SOLD TO MR. L. TULSI PRASAD AND OTHERS @ RS.40 LAKHS PER ACRE IN SEPTEMBE R, 2006. ON DISCRETE ENQUIRIES, IT WAS NOTICED THAT FINAL CLAIMA NTS OF THE ABOVE LANDS WERE MR. L. TULSI PRASAD AND OTHERS. WHE N MR. L. TULSI PRASAD AND OTHERS WERE QUESTIONED THEY DID NOT AC CEPT PAYMENT OF ANY ON-MONEY TO THE VENDORS OF THE PROPERT Y. BUT THEY FAILED TO SUBSTANTIATE THE CONTENTS IN THE SEIZED MATER IAL AS FALSE. THE ASSESSING OFFICER ALSO OBSERVED THAT ASSES SEE WAS ONE OF THE CO-OWNERS OF THE LAND HAVING 1/34 TH SHARE IN AC.7.00 OF LAND; TOTAL SALE CONSIDERATION PAID BY MR. L. TULSI PR ASAD AND OTHERS FOR PURCHASE OF AC.7.00 WAS RS.1,60,00,000. T HE ASSESSEE ALONG WITH 03 OTHERS HAVE PURCHASED THE ABOVE LAND TO THE EXTENT OF AC.39.05 GTS. THE PURCHASE CONSIDERATION PAID WAS RS.9,87,500 AND HENCE THE BALANCE PURCHASE CONSIDERA TION OF RS.46,55,351 WAS TREATED AS UNEXPLAINED INVESTMENT BY THE ASSESSEE MR. L. VEERA RAGHAVA RAO AND ACCORDINGLY A DDED THE SAME IN HIS HANDS. 3. AGGRIEVED ASSESSEE CONTENDED BEFORE THE CIT(A) TH AT SEIZED MATERIAL RELIED UPON BY THE ASSESSING OFFICE R DOES NOT BELONG TO HIM AND IT RELATES TO A THIRD PARTY AND THE AS SESSING OFFICER ERRONEOUSLY DREW A CONCLUSION THAT IT BELONGS TO HIM. IT WAS MAINLY CONTENDED THAT THE RECEIPT FOUND DID NOT MENTIO N NAME OF THE ASSESSEE OR HIS RELATIVES AND THERE IS NO MENTION OF THE PURPORTED CONSIDERATION PAID BY THE ASSESSEE ALONG WITH HIS 4 ITA.NO.1160/H/2013 & C.O.NO.28/H/2016 MR. L. VEERA RAGHAVA REDDY, VIJAYAWADA. RELATIVES. NO MATERIAL WAS BROUGHT TO SUBSTANTIATE THAT ON -MONEY WAS ACTUALLY PAID TO THE VENDOR AND IN THE ABSENCE OF SUCH MATERIAL NO ADDITION CAN BE MADE. RELIANCE WAS PLACE D ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF VARG HESE (K.P.) VS. ITO (1987) 131 ITR 597. 4. HAVING REGARD TO THE CIRCUMSTANCES, THE LD. CIT(A) CONSIDERED THE MATTER IN GREAT DETAIL FROM PARA 6.2 ONWA RDS AND HELD THAT THE ASSESSMENT WAS MADE WITHOUT BRINGING ANY CORROBORATIVE MATERIAL PROVING THAT ON MONEY WAS ACTUALL Y RECEIVED BY THE SELLER IN WHICH EVENT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE TOWARDS UNEXPLAINED INVESTMEN T IN PURCHASE OF LAND. HE ALSO OBSERVED THAT THE PROVISION S OF SECTION 50C OF THE ACT CAN AT BEST BE INVOKED IN THE HANDS OF TH E SELLER BUT THE SAME CANNOT BE APPLIED WHILE MAKING AN ASSESS MENT IN THE HANDS OF PURCHASER UNLESS IT IS PROVED THAT SOME U NEXPLAINED INVESTMENT OTHER THAN THE VALUE MENTIONED IN THE REGISTER ED DOCUMENT WAS ACTUALLY PAID AND IN THIS REGARD, RELIANC E WAS PLACED UPON THE DECISION OF THE ITAT, AHMADABAD BENC H REPORTED IN 27 TAXMANN.COM 306. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED. 5. AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIBU NAL. NO MATERIAL WAS PLACED BEFORE THIS BENCH TO CONTRADICT T HE FINDINGS OF THE LD. CIT(A) OR TO HIGHLIGHT THAT THE FAC TUAL MATRIX OF THE INSTANT CASE IS DIFFERENT FROM THE FACTS WHICH WERE T AKEN INTO CONSIDERATION BY THE ITAT, AHMEDABAD BENCH CITED BY TH E LD. D.R. IN FACT, THE REVENUE HAS NOT PLACED ANY CASE LAW BEFORE THE BENCH AND IN FACT, NO PAPER BOOK WAS FILED IN SUPPO RT OF THEIR STAND THAT THE ASSESSING OFFICER HAD SUFFICIENT EVIDENC E TO PROVE 5 ITA.NO.1160/H/2013 & C.O.NO.28/H/2016 MR. L. VEERA RAGHAVA REDDY, VIJAYAWADA. THAT ON MONEY HAS BEEN RECEIVED BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, I HAVE NO OTHER ALTERNATIVE EXCEPT TO UPH OLD THE ORDER OF THE CIT(A). IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. 6. TO SUM-UP, APPEAL FILED BY THE REVENUE AS WELL A S CROSS-OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.08.2 016. SD/- (D. MANMOHAN) VICE PRESIDENT HYDERABAD, DATED 12 TH AUGUST, 2016 VBP/- COPY TO 1. THE DCIT, CENTRAL CIRCLE-3, 8 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. MR. L. VEERA RAGHAVA RAO, 64-9-2, SBH COMPLEX, PATAMATALANKA, VIJAYAWADA. 3. (LATE) L. VEERA RAGHAVA RAO, REPTD. BY L.H. MR. LI NGAM RAVINDRA RAO, 64-9-2, SBH COMPLEX, PATAMATA LANKA, VIJAYAWADA. 4. CIT(A)-V, HYDERABAD. 5. CIT-(CENTRAL), HYDERABAD. 6. D.R. ITAT B (SMC) BENCH, HYDERABAD. 7. GUARD FILE