DCIT, Central Circle-4, Hyderabad V. Sri Dheeraj Kumar Sonthalia, Hyderabad

ITA 1192/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66445 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SATAPATHY
• Assessee Lawyers: NEHRU MOORTHY
• Keywords: Unexplained cash credit; Search and seizure; Opportunity of being heard
• Section: 143(3); 142(1); 68; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNALHYDERABAD BENCH HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1192/HYD/2012 ASSESSMENT YEAR : 2009-10 DY. COMMISSIONER OF INCOME-TAX, APPELLANT CENTRAL CIRCLE 4, HYDERABAD. VS. SRI DHEERAJ KUMAR SONTHALIA, RESPONDENT HYDERABAD. (PAN ANTPS 8727 N) APPELLANT BY : SHRI A.K. SATAPATHY RESPONDENT BY : SHRI NEHRU MOORTHY DATE OF HEARING : 14/11/2012 DATE OF PRONOUNCEMENT : 16/11/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF CIT-VII, HYDERABAD DATED 25/05/2012 FOR THE ASSE SSMENT YEAR 2009-10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND SEARCH AND SEIZURE OPERATIONS U/S 13 2 OF THE ACT, WERE CONDUCTED ON 29/01/2009 ALONG WITH M/S SUNDER STEELS GROUP OF CASES. A NOTICE U/S 142(1) OF THE IT ACT WAS IS SUED ON 28/10/2010 REQUIRING THE ASSESSEE TO FILE THE RETUR N OF INCOME. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED RET URN OF INCOME ON 2 ITA NO. 1192/HYD/2012 SHRI DHEERAJ KUMAR SONTHALIA 23/11/2010 FOR THE YEAR UNDER CONSIDERATION DECLARI NG A TOTAL INCOME OF RS. 3,64,701/-, WHICH WAS PROCESSED U/S 1 43(1) OF THE IT ACT. SUBSEQUENTLY, NOTICES U/S 143(2) & 142(1) OF T HE IT ACT WERE ISSUED TO THE ASSESSEE AND THE ASSESSMENT WAS COMPL ETED U/S 143(3) OF THE ACT. WHILE COMPLETING THE ASSESSMENT, THE AO MADE AN ADDITION OF RS. 13,84,351/-, WHICH WAS SHOWN IN THE BALANCE SHEET AS CASH IN HAND, ON THE GROUND THAT WHEN THE ASSESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNT, THE ASSESSEE COU LD NOT PRODUCE ANY EVIDENCE REGARDING CASH BALANCE. HENCE, THE AO TREATED THE SAID CASH BALANCE AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AND ADDED THE SAME TO THE RETURNED INCOME OF THE AS SESSEE FOR THE YEAR UNDER CONSIDERATION. 3. ON APPEAL, BEFORE THE CIT(A) THE ASSESSEE OBJECT ED TO THE ADDITION AND FILED WRITTEN SUBMISSIONS STATING THAT THE AO HAD NEVER ASKED FOR THE BOOKS OF ACCOUNT. HOWEVER, THE ASSESS EE POINTED OUT THAT THE AO CONTRADICTED HIS STATEMENT BY SAYING TH AT THE ASSESSEE HAS NOT PRODUCED CAPITAL ACCOUNT AND BALANCE SHEET, BUT, IN THE SAME ASSESSMENT ORDER THE AO OBSERVED THAT BALANCE SHEET HAD BEEN PRODUCED BY THE ASSESSEE. THE ASSESSEE SUBMITT ED THAT HE HAD MAINTAINED BOOKS OF ACCOUNT AND FOR THE YEAR UNDER APPEAL AUDIT REPORT AS PER THE PROVISIONS OF SECTION 44AB WAS AL SO OBTAINED BY THE ASSESSEE. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT IN THE ASSESSMENT ORDER ADDITIONS WER E MADE WITHOUT ANY ELABORATE DISCUSSION ON THE ISSUE AND WITHOUT R EFERENCE TO RELEVANT EVIDENCES. HE FURTHER OBSERVED THAT THE AD DITION STATING THE ABSENCE OF INFORMATION/BOOKS AT THE TIME OF ASS ESSMENT 3 ITA NO. 1192/HYD/2012 SHRI DHEERAJ KUMAR SONTHALIA PROCEEDINGS CANNOT BE TAKEN AS REASON FOR MAKING AD DITION AND IS NOT JUSTIFIABLE IN A CASE WHERE SEARCH AND SEIZURE PROCEEDINGS HAVE TAKEN PLACE. HE ALSO OBSERVED THAT THIS BEING A 44A B CASE, THE AUDIT REPORT IS VERY MUCH AVAILABLE ON THE RECORD FOR VER IFICATION BY THE AO DURING THE ASSESSMENT PROCEEDINGS. THE CIT(A), THEREFORE, HELD THAT THE CASH IN HAND AS REFLECTED IN THE BALANCE S HEET AND CAPITAL ACCOUNT SUBMITTED BY THE ASSESSEE AND STATEMENT OF AFFAIRS OF THE SAID BUSINESS INDICATE THE AVAILABILITY OF CASH ON HAND TO THE EXTENT OF RS. 13,84,351/- AND IS VERY MUCH EXPLAINABLE THR OUGH THE BOOKS AS MAINTAINED BY THE ASSESSEE YEAR AFTER YEAR AND, THEREFORE, CANNOT BE TREATED THE SAME UNEXPLAINED CASH U/S 68 OF THE ACT. HE FURTHER POINTED THAT FOR ATTRACTING THE PROVISIONS OF SECTION 68, EITHER THERE SHOULD BE ABSENCE OF EXPLANATION OFFER ED BY THE ASSESSEE OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT ACCEPTABLE TO THE AO AND IN THIS CASE, NO FACTS HAV E BEEN BROUGHT OUT ON THE RECORD BY THE AO TO PROVE THAT THE ASSES SEE HAD BROUGHT UNACCOUNTED CASH IN THE BOOKS OF ACCOUNT SO AS TO A TTRACT THE PROVISIONS OF SECTION 68. THE CIT(A), THEREFORE, D ELETED THE ADDITION OF RS. 13,84,351/- MADE BY THE AO U/S 68 OF THE ACT . 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US AN D HAS RAISED THE FOLLOWING GROUND OF APPEAL:- THE LD. CIT(A) HAS ERRED IN ACCEPTING VARIOUS ADDIT IONAL EVIDENCES SUBMITTED BY THE ASSESSEE DURING THE COUR SE OF APPELLATE PROCEEDINGS WITHOUT ALLOWING AN OPPORTUNI TY TO THE AO TO CROSS EXAMINE THE SAME IN ACCORDANCE WITH THE RULE 46A OF THE IT RULES. 6. BEFORE US, THE CONTENTION OF THE REVENUE AS EXPR ESSED BY THE LEARNED DR SHRI A.K. SATYAPATHY IS THAT THE BALANCE SHEET, CAPITAL ACCOUNT AND THE AUDIT REPORT WERE ALL FURNISHED BEF ORE THE CIT(A) 4 ITA NO. 1192/HYD/2012 SHRI DHEERAJ KUMAR SONTHALIA AND THE CASE WAS EXPLAINED DILIGENTLY BY THE ASSESS EE WHEREAS THE ASSESSEE FAILED TO PRODUCE THE SAME BEFORE THE AO A T THE TIME OF ASSESSMENT PROCEEDINGS. 7. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SHRI NEHRU MOORTHY POINTED OUT THAT THE AO COMPLETED THE ASSESSMENT AT THE END OF THE TIME BARRED PERIOD AND HAD GIVEN ONL Y ONE OR 2 DAYS TIME TO SUBMIT THE DETAILS ASKED BY HIM AND DUE TO THE SHORT TIME AVAILABLE FOR PASSING THE ORDER THE AO PASSED THE O RDER WITHOUT CONSIDERING THE DETAILS SUBMITTED BY THE ASSESSEE. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, PERUSED THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. AS PER THE LEARNED COUNSEL FOR THE ASSESSEE, THE CASE HAS BEEN SUMMARILY DISMISSED BY THE AO WITHOUT GOING INTO THE DETAILS. ON THE OTHER HAND, THE GRIEVANCE OF THE DEPARTMENT IS THAT AN OP PORTUNITY HAS NOT BEEN GIVEN TO THE AO TO CROSS-EXAMINE THE EVIDE NCE IN ACCORDANCE WITH THE RULE 46A OF THE IT RULES . IN THESE CIRCUMSTANCES, WE ARE INCLINED TO REMIT THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THE DETAILS FILED BY ASSESSEE AND DECIDE THE ISSUE DE-NOVO IN ACCORDANCE WITH LAW AFT ER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE IN THE MATTER. 5 ITA NO. 1192/HYD/2012 SHRI DHEERAJ KUMAR SONTHALIA 9. IN THE RESULT, APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAY ARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 16 TH NOVEMBER, 2012 KV COPY TO:- 1) DCIT, (CENTRAL CIRCLE-4), 8 TH FLOOR, AAYAKAR BHAVAN, L.B. STADIUM ROAD, BASHEERBAGH, HYDERABAD 500 004 . SHRI DHEERAJ KUMAR SONTHALIA, 8-2-686, ROAD NO. 12, BANJARA HILLS, HYDERABAD. 2) THE CIT(A)-VII, HYDERABAD 3) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYD ERABAD.