Mr. Anil Kishore Agarwal, Hyd, Hyderabad V. DCIT, Central Circle-4, Hyderabad

ITA 1223/HYD/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5972 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 25-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2011
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained investment; Income from undisclosed sources; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1223/HYD/2011 ASSESSMENT YEAR: 2006-07 MR. ANIL KISHORE AGARWAL, HYDERABAD [PAN: ABGPA5830R] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, AR FOR REVENUE : SHRI A. SITARAMA RAO, DR DATE OF HEARING : 25-10-2016 DATE OF PRONOUNCEMENT : 09-12-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS APPEAL WAS ORIGINALLY HEARD ALONG WITH BATCH OF APPEALS IN THE GROUP OF M/S. JAI BALAJI SANITARY STORES AND HAS BEEN DISPOSED-OFF VIDE ORDER DT. 28-05-2014. LATER ON, AS SESSEE HAS PREFERRED A MISCELLANEOUS APPLICATION STATING THAT THE GROUNDS B AND C COVERING 4 TO 9 GROUNDS HAVE NOT BEEN ADJUDICAT ED IN THE ORDER. I.T.A. NO. 1223/HYD/2011 MR. ANIL KISHORE AGARWAL :- 2 -: 2. AFTER CONSIDERING THE GROUNDS RAISED AND THE ORDE R PASSED, THE ITAT HAS ALLOWED THE MISCELLANEOUS APPLIC ATION AND RECALLED THE ORDER OF TRIBUNAL DT. 28-05-2014 FOR ADJ UDICATION OF GROUND NOS. 4 TO 6 AND 7 TO 9. CONSEQUENTLY, THE CASE IS HEARD AND AFTER CONSIDERING THE RIVAL CONTENTIONS THE RELEVA NT GROUNDS WERE DECIDED IN THIS ORDER. THE GROUNDS RAISED BY A SSESSEE ARE AS UNDER: B. ADDITION TOWARDS UNEXPLAINED INVESTMENTS OF RS. 10,00,000/- : 4. THE DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCL E-4, WHILE PASSING THE ORDER WHEREIN A SUM OF RS. 10,00,000/- HAS BEEN ADD ED TO THE RETURNED INCOME FOR THE ASSESSMENT YEAR 2006-2007 TOWARDS TH E UNEXPLAINED INVESTMENTS AS UNDISCLOSED INVESTMENTS IN THE HANDS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-2007. 5. THE ASSESSEE HAS FURNISHED THE EXPLANATIONS TO T HE ASSESSING OFFICER WHICH HAS NOT BEEN CONSIDERED AND THE AMOUNT HAS BE EN ADDED ON THE BASIS OF THE ESTIMATED FIGURES WHICH HAS BEEN ARRIV ED BY THE IMAGINATION OF THE ASSESSING OFFICER WHICH IS NOT CORRECT AND N OT JUSTIFIED AND BAD IN LAW. 6. ACTUALLY THE ASSESSEE HAS RECEIVED THE AMOUNT TO WARDS THE SALE OF GOODS TO THE ABOVE NAMED PERSONS MENTIONED IN THE L IST IN THE ASSESSMENT ORDER AND THE DETAILS HAD ALREADY BEEN FURNISHED TO THE ASSESSING OFFICER AS THE AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE TOW ARDS THE SALE OF THE GOODS IN THE SHOP BY THE ASSESSEE AND AMOUNT IS NOT TOWARDS THE INVESTMENTS AND HENCE THE ADDITIONS MADE IS NOT COR RECT AND NOT JUSTIFIED AND BAD IN LAW. C. ADDITION TOWARDS UNEXPLAINED INCOME OF RS. 10,95 ,000/- : 7. THE DY. COMMISSIONER OF INCOME TAX WHILE PASSING THE ORDER HAS ADDED A SUM OF RS. 10,95,000/- WHICH IS NOT CORRECT AS THE ASSESSEE HAS PURCHASED THE PROPERTY AT BOGULKUNTA AND THE AMOUNT HAS BEEN REFLECTED IN THE BOOKS OF THE ASSESSEE ALSO. THERE IS NO QUES TION OF ADDITIONS OF THE SAME AS ALREADY BEEN REFLECTED IN THE BOOKS OF THE ASSESSEE. 8. THE ASSESSEE HAS FURNISHED THE EXPLANATIONS TO T HE ASSESSING OFFICER WHICH HAS NOT BEEN CONSIDERED AND THE AMOUNT HAS BE EN ADDED ON THE BASIS OF THE ESTIMATED FIGURES WHICH HAS BEEN ARRIV ED BY THE IMAGINATION I.T.A. NO. 1223/HYD/2011 MR. ANIL KISHORE AGARWAL :- 3 -: OF THE ASSESSING OFFICER WHICH IS NOT CORRECT AND N OT JUSTIFIED AND BAD IN LAW. 9. ACTUALLY THE ASESSEE HAS RECEIVED THE AMOUNT TOW ARDS THE SALE OF GOODS TO THE ABOVE NAMED PERSONS MENTIONED IN THE L IST IN THE ASSESSMENT ORDER AND THE DETAILS HAD ALREADY BEEN FURNISHED TO THE ASSESSING OFFICER AS THE AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE TOW ARDS THE SALE OF THE GOODS IN THE SHOP BY THE ASSESSEE AND AMOUNT IS NOT TOWARDS THE INVESTMENTS AND HENCE THE ADDITIONS MADE IS NOT COR RECT AND NOT JUSTIFIED AND BAD IN LAW. 2.1. THE ISSUE IN THE ABOVE GROUNDS ARE WITH REFEREN CE TO UNEXPLAINED INVESTMENT OF RS. 10 LAKHS AND UNEXPLAIN ED INCOME OF RS. 10,95,000/-. 3. WITH REFERENCE TO THE FIRST ISSUE OF UNEXPLAINED INVESTMENT OF RS. 10 LAKHS, THE AO HAS NOTED THAT ASSESSE E HAS ADVANCED AN AMOUNT OF RS. 10 LAKHS TOWARD AMEERPET PRO PERTY TO SHRI SHIV MOHAN REDDY ON 01-10-2005. AS PER EVIDEN CE IN SL. NO. 78 OF ANNEXURE A/HIMA/RES/6, AO NOTED THAT CASH OF RS. 10 LAKHS WAS DEPOSITED IN ASSESSEES SB A/C AND SINCE ASSESSEE HAS NOT EXPLAINED THE SOURCE, THE SAME WAS TREATED AS UNEX PLAINED INVESTMENT. AO ALSO ENQUIRED FROM SHRI SHIV MOHAN REDDY AND THE STATEMENT WAS RECORDED ON 20-02-2007, WHEREIN IT W AS STATED THAT THE TRANSACTION DID NOT MATERIALISE AND THE TOKEN ADV ANCE OF RS. 10 LAKHS WAS RETURNED THROUGH CHEQUE AND DD. IN ANSWER TO QUESTION NO. 5, SHRI MOHAN REDDY HAS ADMITTED THAT THE A MOUNT OF RS. 10 LAKHS AS ADVANCED WAS GIVEN VIDE CHEQUE D T. 30-09-2005 DRAWN ON ANDHRA BANK, HOWEVER, THE AO MADE AN ADDITIO N OF RS. 10 LAKHS. I.T.A. NO. 1223/HYD/2011 MR. ANIL KISHORE AGARWAL :- 4 -: 4. BEFORE THE LD. CIT(A), IT WAS THE SUBMISSION THAT THIS AMOUNT WAS RECORDED IN THE BOOKS OF ACCOUNT AND SINCE THE DEAL HAS NOT MATERIALISED, THE AMOUNT WAS RETURNED TO ASSESSEE . IT IS ALSO FURTHER SUBMITTED THAT AMOUNT WAS PAID BY WAY OF CH EQUE AND SAME WAS RETURNED TO ASSESSEE. ON THE REASON THAT THE S OURCE OF RS. 10 LAKHS WAS NOT EXPLAINED, LD. CIT(A) CONFIRMED THE AMOUNT. 5. IT WAS SUBMITTED THAT ASSESSEE HAS ENOUGH CASH BALANCES AND IT WAS PART OF THE CASH FLOW STATEMENT SUBMI TTED TO THE AO. REFERRING TO THE ORDER OF ITAT IN PARA 37 AN D ALSO PARA 58, IT WAS SUBMITTED THAT ASSESSEE CAN EXPLAIN THE SOURCES FR OM THE PAPERS FILED BEFORE THE AO, IF THE MATTER WAS RESTORED T O THE FILE OF AO FOR DECIDING AFRESH IN LINE WITH OTHER GROUNDS WH ICH WERE SENT BACK TO AO. 5.1. LD. DR HOWEVER, SUBMITTED THAT THERE IS NO EXPLAN ATION FOR THE ABOVE AMOUNT WHICH WAS DEPOSITED IN THE BANK AC COUNT. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES AN D PERUSING THE MATERIAL ON RECORD AND THE ORDERS ON S IMILAR GROUNDS BY THE ITAT, WE ARE OF THE OPINION THAT THIS ISSUE REQU IRES TO BE EXAMINED AFRESH BY THE AO AFTER CONSIDERING THE CASH FLOW STATEMENTS, AVAILABILITY OF FUNDS WITH ASSESSEE AND ITS FAMILY IN LINE WITH THE DIRECTIONS GIVEN IN PARA 37 AND PARA 52 & 58 . ACCORDINGLY, THIS GROUND IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 7. NEXT ISSUE FOR CONSIDERATION IS AMOUNT OF INVESTMEN T OF RS. 10 LAKHS IN THE PROPERTY AT BOGGULAKUNTA. VIDE S HEET NO. 2 OF I.T.A. NO. 1223/HYD/2011 MR. ANIL KISHORE AGARWAL :- 5 -: SEIZED ITEM A/HIMA/RES/PO/13, IT HAS COME TO THE KNOWL EDGE THAT ASSESSEE HAS ACQUIRED A HOUSE AT BOGULKUNTA FOR AN AMOUNT OF RS. 10 LAKHS AND IT WAS REGISTERED FOR AN AMOUNT OF RS. 95,200/-. SINCE THE SOURCE OF THE ABOVE FUNDS ARE N OT EXPLAINED, THE AO HAS ADDED THE AMOUNT AS UNACCOUNTED INCOME IN THE ASSESSEES HANDS INVESTED IN THE ABOVE PROPERTY. LD . CIT(A) ALSO NOTED THAT ASSESSEE HAS NOT GIVEN ANY DETAILS WITH REGAR D TO THE SAID INVESTMENT, EVEN THOUGH IT WAS CLAIMED THAT THE SAI D PURCHASE COST HAS BEEN REFLECTED IN THE BOOKS OF ACCO UNT. ACCORDINGLY, THE AMOUNT WAS CONFIRMED. 7.1. BEFORE US, LD. COUNSEL SUBMITTED THAT THE AMOUNT I S BROUGHT THROUGH ASSESSEES KNOWN SOURCES AND HAS BEE N SHOWN IN THE BALANCE SHEET AT THE TIME OF FILING THE RETURN ITSELF . HE ALSO REFERRED TO THE EXPLANATION GIVEN WHICH HAS NOT BEEN VE RIFIED BY THE AO. IN VIEW OF THAT, IT IS SUBMITTED THAT THIS ISSUE ALSO CAN BE RESTORED TO THE FILE OF AO AS THE TRANSACTION IS RECORDE D IN THE BOOKS OF ACCOUNT AND HAS GONE THROUGH THE BANK ACCOUNT. 7.2. CONSIDERING THE ARGUMENTS AND MATERIAL AVAILABL E ON RECORD, WE ARE OF THE OPINION THAT THIS ISSUE ALSO REQU IRES EXAMINATION BY THE AO AFRESH. IF THE MONEY HAS BEEN P AID THROUGH BANK ACCOUNT AND HAS BEEN PART OF ASSESSEES BOOKS O F ACCOUNT AND BALANCE SHEET, THERE IS NO NEED TO CONSIDER THE AMO UNT AS UNACCOUNTED. BOTH AO AND CIT(A) RECORDED THAT ASSESSEE HAS NOT EXPLAINED THE SOURCES BEFORE THEM. IN VIEW OF THAT, WE ARE OF THE OPINION THAT THIS ISSUE REQUIRES RE-EXAMINATION BY THE AO AFTER CONSIDERING ASSESSEES EXPLANATION, THE BOOKS OF ACCO UNT, BANK ACCOUNTS AND THE CASH FLOW STATEMENT FURNISHED DURING TH E COURSE I.T.A. NO. 1223/HYD/2011 MR. ANIL KISHORE AGARWAL :- 6 -: OF ASSESSMENT. WITH THESE DIRECTIONS, THE ISSUE IN THIS GROUND IS ALSO RESTORED TO THE FILE OF AO FOR FRESH EXAMINATION A ND CONSIDERATION. 8. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PUR POSES TO THE ABOVE EXTENT. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 9 TH DECEMBER, 2016 TNMM COPY TO : 1. MR. ANIL KISHORE AGARWAL, HYDERABAD. C/O. P. MUR ALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, HYDERABAD. 3. CIT (APPEALS)-VII, HYDERABAD. 4. CIT(CENTRAL), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.