Chenna Reddy Patlolla , Hyderabad V. Income Tax Officer, Ward-8(3) , Hyderabad

ITA 118/Hyd/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6974 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB-B
• Assessment Year: 2012-2013
• Appeal Filed On: 28-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y.V.S.T. SAI
• Section: 69C; 234B; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B” : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. No.118/HYD/2020 Assessment Year: 2012-13 Chenna Reddy Patlolla, HYDERABAD [PAN: AJQPP8085P] Vs Income Tax Officer, Ward-8(3), HYDERABAD (Appellant) (Respondent) For Assessee : Shri S.Rama Rao, AR For Revenue : Shri Y.V.S.T.Sai, CIT-DR Date of Hearing : 18-11-2021 Date of Pronouncement : 06-12-2021 O R D E R PER S.S.GODARA, J.M. : This assessee’s appeal for AY.2012-13 arises from the CIT(A)-1, Hyderabad’s order dated 20-11-2019 passed in case No.10558 / CIT(A)-1 / Hyd / 2017-18, involving proceedings u/s.143(3) r.w.s.153C of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused. 2. The assessee raised the following substantive grounds in the instant appeal: “1.The order of the learned Commissioner of Income-Tax (Appeals) is erroneous both on facts and in law. 2.The learned Commissioner of Income-Tax (Appeals) erred in confirming initiation of proceedings ix] s 153C of the I.T.Act. ITA No. 118/Hyd/2020 :- 2 -: 3.The learned Commissioner of Income-Tax (Appeals) ought to have seen that no document relating to the' appellant was available and that, therefore, the provisions of Sec.153C are not applicable. 4.The learned Commissioner of Income-Tax (Appeals) erred in confirming the addition made of Rs.85,00,000/- without considering the fact that no evidence was found that the appellant paid amount to Chalimeda Ananda Rao Institute of Medical Sciences, Karimnagar. 5.The learned Commissioner of Income-Tax (Appeals) erred in confirming levy of interest u/s 234A, 234B and 234C of the I.T. Act. 6. Any other ground that may be urged at the time of hearing”. 3. Mr.Rama Rao vehemently challenge correctness of the impugned Section 153C assessment framed in furtherance to the search action dt.25-07-2013 carried out in case of M/s.Arihant Educational Society. There is no doubt that there are two Assessing Officers i.e. in case of searched assessee and the instant taxpayer. And that DCIT, Central Circle-2(2), Hyderabad had recorded his corresponding satisfaction dt.28-12-2016 that the foregoing search had led to seizure of incriminating documents/evidence viz. AES/13, A/CAIMS/08 and AES SW.STMT (pages 114, 74 and 8) in the nature of payment of capitation fee of Rs.41 lakhs, DD of Rs.5,25,000/- paid for PG course and statement of Shri Y.Santosh Reddy, Accountant cum Cashier of the searched party; respectively. The former Assessing Officer therefore recorded his 153C satisfactions that the foregoing incriminating material related to the assessee. This followed the assessee’s assessing authority’s satisfaction i.e. ITO, Ward-8(3), Hyderabad’s satisfaction on the very lines leading to the initiation of the impugned proceedings finally culminating in Section 69C addition of Rs.85 lakhs on merits. ITA No. 118/Hyd/2020 :- 3 -: Learned authorised representative strongly argued that learned lower authorities had failed to offer cross-examination of Shri Y.Santosh Reddy (supra) to the assessee. We find no substance in the instant argument since the impugned incriminating material was duly put to the assessee during the course of lower proceedings. 4. Next comes correctness of the impugned addition on merits. Suffice to say, learned CIT-DR’s paper book running into five pages duly indicates the assessee to have paid/incurred deduction amount(s) of Rs.41 lakhs and Rs.5,25,000/- by DD; respectively. We thus find no reason to reverse the impugned addition of Rs.46.25 lakhs. The fact however remains that latter sum of Rs.5.25 lakhs had been paid by way of DD. We thus direct the Assessing Officer to ensure that the impugned sum of Rs.5.25 lakhs is not assessed twice both u/s.69C as well as in regular books. Ordered accordingly. It is further made clear that the remaining foregoing addition of Rs.41 lakhs shall stand confirmed. 5. We are now left with balance component of Rs.48.75 lakhs out of Rs.85 lakhs. Learned CIT-DR has vehemently contended the same was based on search statement of the searched party; which in turn, had made declaration to this effect before Income Tax Settlement Commission. We find no merit in the Revenue’s instant argument since the impugned addition is based on a mere statement by third party made in assessee’s case which does not deserve to be treated at par ITA No. 118/Hyd/2020 :- 4 -: with the alleged incriminating material having presumption of correctness u/s.292C of the Act. We further wish to reiterate that the CBDT’s lead circular dt.10-03-2003 settles the issue that a mere search statements in absence of any supportive incriminating evidence do not carry any significance. We accordingly delete the impugned balance component of Rs.48.75 lakhs for this precise reason. No other ground has been pressed before us. 6. This assessee’s appeal is partly allowed in above terms. Order pronounced in the open court on 6 th December, 2021 Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 06-12-2021 TNMM ITA No. 118/Hyd/2020 :- 5 -: Copy to : 1.Chenna Reddy Patlolla, Archana Multispeciality Hospital, H.No.5-136/1, Chanda Nagar, Hyderabad. 2.The ITO, Ward-8(3), Hyderabad. 3.CIT(Appeals)-1, Hyderabad. 4.Pr.CIT-2, Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.