Arkala Vijay, R.R.Dist, Hyderabad V. ITO, Ward-11(1), Hyd, Hyderabad

ITA 1235/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2507 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Additional evidence
• Section: 69; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 1235/HYD/2016 ASSESSMENT YEAR: 2009-10 ARKALA VIJAY, R.R. DISTRICT PAN AESPV 9949 M VS INCOME-TAX OFFICER, WARD 11(1), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. RAVISESHAGIRI RAO FOR REVENUE : SHRI K.J. RAO DATE OF HEARING : 11-05-2017 DATE OF PRONOUNCEMENT : 12-05-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDERABAD, DATED 30-06-2016 FOR THE A.Y. 2009-10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS IN THE BUSINESS OF SALE OF WINES. HE FILED HIS RETURN OF INCOME FOR THE AY 2009-10 ON 23/06/2009 ADMITTING AN INCOM E OF RS. 1,55,970/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT U/S 143(3) WAS COMPLETED BY THE AO BY MA KING AN ADDITION OF RS. 17,10,987/- TOWARDS INVESTMENT I N PURCHASE OF IMMOVABLE PROPERTY. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) A FTER I.T.A. NO. 1235/HYD/2016 ARKALA VIJAY :- 2 -: CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FOL LOWING THE DECISION OF HIS PREDECESSOR IN THE CASE OF SHRI ARKALA SURESH GOUD VIDE ORDER DATED 23/08/2013, HELD AS FO LLOWS: 6.9 THE ASSESSEE FAILED TO GIVE SATISFACTORY EXPLAN ATION FOR HAVING SOURCE OF INCOME FROM HIS BUSINESS. HE H AS NOT PRODUCED ANY BOOKS OF ACCOUNT OR BANK STATEMENT S EITHER AT THE TIME ASSESSMENT PROCEEDINGS OR AT THE TIME OF APPELLATE PROCEEDINGS. HENCE, THE CONTENTION THA T HE HAS INVESTED THE SAID AMOUNT OUT OF HIS BUSINESS IN COME IS ALSO NOT ACCEPTABLE. THEREFORE, IT IS EVIDENT TH AT THE ASSESSEE HAD NO PROPER EXPLANATION FOR THE SAID INVESTMENT IN THE PROPERTY PURCHASED AT BOWRAMPET F OR A CONSIDERATION OF RS.11,25,0001AND FOR THE EXPENSES TOWARDS STAMP DUTY AND REGISTRATION OF RS 2,96,975/ -THE ENTIRE AMOUNT OF RS.14,21,975/- WAS TREATED AS UNEXPLAINED AND CONSIDERING THE JOINT OWNERSHIP OF THE PROPERTY, 50% OF INVESTMENT IS TREATED AS UNEXPLAIN ED INVESTMENT IN THE HANDS OF THE ASSESSEE. 6.10 UNDER THESE CIRCUMSTANCES, IT IS HELD THAT THE AO IS JUSTIFIED IN MAKING ADDITION ON ACCOUNT OF UNEXPLAI NED INVESTMENT. ACCORDINGLY, THE ADDITION OF RS.7,10,98 8/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT, IN IMMOVABLE PROPERTY IS SUSTAINED. THEREFORE, THE REL EVANT GROUNDS OF APPEAL IS TREATED AS REJECTED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GR OUNDS OF APPEAL: 1) THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS T O THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. 2) THE LEARNED CIT (A) ERRED IN HOLDING THAT THE INVESTMENT MADE IN THE PROPERTY OF RS.7,10,988/- IS NOT PROPERTY EXPLAINED AND THAT THE SAID AMOUNT IS ASSESSABLE AS INCOME OF THE APPELLANT U/S 69 OF THE I.T.ACT. I.T.A. NO. 1235/HYD/2016 ARKALA VIJAY :- 3 -: 3) THE LEARNED CIT (A) OUGHT TO HAVE CONSIDERED THE EXPLANATION SUBMITTED BY THE APPELLANT; ACCEPTED TH AT THE INVESTMENT WAS FROM OUT OF THE KNOWN SOURCES AN D OUGHT TO HAVE DELETED THE ENTIRE ADDITION MADE BY T HE ASSESSING OFFICER. 5. BEFORE ME, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY TH E DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CAS E OF MR. ARKALA SURESH GOUD IN ITA NO. 1365/HYD/2013 VIDE OR DER DATED 24/03/2016. 6. THE LD. DR ON THE OTHER HAND NEITHER CONTROVERTE D THE SUBMISSION OF THE LD. AR NOR BROUGHT ANY CONTRARY D ECISION IN THIS REGARD. 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE CASE OF MR. ARKALA SURESH GOUD, THE COORDINATE BENCH HAS HE LD AS UNDER: 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE AO. HAD OBTAIN ED THE RELEVANT DOCUMENTS FROM THE SRO, QUTUBULLAPUR AND H AS ALSO EXAMINED AND RECORDED STATEMENTS OF THE PURCHASERS WHO HAVE CONFIRMED THE PAYMENT OF RS.62,50,000 TOWARDS SALE CONSIDERATION OF THE PROP ERTY. THE ASSESSEE HAS NOT ASKED FOR CROSS-EXAMINATION OF THOSE PARTIES BUT HAS OBJECTED TO THE ADOPTION OF T HE SRO VALUE AS THE SALE CONSIDERATION RECEIVED BY THE ASS ESSEE. THE BASIC CONTENTION OF THE ASSESSEE BEFORE US IS T HAT WHEN THE ASSESSEE HAS OBJECTED TO THE HIGHER VALUE OF THE SRO BEING TAKEN AS THE SALE CONSIDERATION RECEI VED BY THE ASSESSEE, THE A.O. IS MANDATORILY REQUIRED T O REFER THE MATTER FOR VALUATION TO THE DEPARTMENT VALUATIO N OFFICER UNDER SECTION 50C(2) OF THE ACT. WE FIND TH AT THE I.T.A. NO. 1235/HYD/2016 ARKALA VIJAY :- 4 -: ASSESSEE HAS RAISED THE ISSUE OF DISPUTES ON THE TI TLE OF THE PROPERTY AS THE REASON FOR THE RECEIPT OF THE L ESSER SALE CONSIDERATION AS COMPARED TO THE SRO VALUE EVE N BEFORE THE AO. BEFORE US ALSO, LD. COUNSEL FOR THE ASSESSEE HAS FILED COPIES OF VARIOUS DOCUMENTS INCL UDING COURT ORDERS IN SUPPORT OF HIS CONTENTION THAT THE PROPERTY WAS DISPUTED PROPERTY. HOWEVER, WE FIND TH AT THE AO. AND THE LD. CIT(A) HAVE HELD THAT THE ASSES SEE HAS FAILED TO PROVIDE ANY MATERIAL EVIDENCE IN SUPP ORT OF THIS CONTENTION. SINCE THESE DOCUMENTS GO TO PROVE THAT THERE WAS A DISPUTE ON THE PROPERTY AND THEREFORE, THE ASSESSEE DID NOT HAVE A CLEAR MARKETABLE TITLE, WE ARE INCLINED TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. SINCE THESE DOCUMENTS NEED VERIFICATION B Y THE AO. AND THE LD. CIT(A), WE DEEM IT FIT AND PROPER T O REMAND THE ISSUE TO THE FILE OF THE AO. FOR VERIFIC ATION OF THESE DOCUMENTS AND ALSO FOR THE VALUATION OF THE PROPERTY UNDER SECTION 50C(2) OF THE ACT, WE DIRECT THE A.O. TO REFER THE MATTER FOR VALUATION OF THE PROPE RTY TO A DEPARTMENTAL VALUATION OFFICER UNDER SECTION 50C(2) OF THE LT. ACT. THE A.O. SHALL ALSO CONSIDER THE NATUR E OF THE PROPERTY SOLD AND WHETHER THE INCOME THEREFORE, IS EXIGIBLE TO INCOME TAX. 7.1 SINCE THE ISSUE IN DISPUTE IS MATERIALLY IDENTI CAL TO THAT OF THE SAID CASE, FOLLOWING THE DECISION OF TH E COORDINATE BENCH, I DIRECT THE A.O. TO REFER THE MA TTER FOR VALUATION OF THE PROPERTY TO A DEPARTMENTAL VALUATI ON OFFICER UNDER SECTION 50C(2) OF THE LT. ACT. THE A. O. SHALL ALSO CONSIDER THE NATURE OF THE PROPERTY SOLD AND W HETHER THE INCOME THEREFORE, IS EXIGIBLE TO INCOME TAX. I.T.A. NO. 1235/HYD/2016 ARKALA VIJAY :- 5 -: 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2017. SD/- (ASHA V IJAYARAGHAVAIN) JU DICIAL MEMBER HYDERABAD, DATED: 12 TH MAY , 2017. KV COPY TO 1 ARKALA VIAY, C/O SRI S. S. RAMA RAO9, ADVOCATE, F LAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD 500 029. 2 ITO, WARD 11(1), IT TOWERS, AC GUARDS, HYDERA BAD. 3 CIT (A)-5, HYDERABAD. 4 PR. CIT 5, HYDERABAD. 5 THE DR, ITAT HYDERABAD 6 GUARD FILE