Rashmi Singh , Hyderabad V. DCIT, Circle-6(1), Hyderabad

ITA 127/Hyd/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5807 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E SRIDHAR
• Assessee Lawyers: A V RAGHURAM
• Keywords: Principle of natural justice; Reassessment proceedings; Set aside
• Section: 148

Judgement Text

ITA NO 127 OF 2021 RASHMI SINGH HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.127/HYD/2021 ASSESSMENT YEAR: 2010-11 MRS. RASHMI SINGH HYDERABAD PAN:BASPS9695A VS. DY. C.I.T CIRCLE 6(1) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY : SRI E. SRIDHAR, DR DATE OF HEARING: 19/04/2021 DATE OF PRONOUNCEMENT: 29/04/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2010-11 AGAIN ST THE ORDER OF THE CIT (A)-12, HYDERABAD, DATED 28.1 0.2020. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN DIVIDUAL FILED HER RETURN OF INCOME FOR THE A.Y 2010-11 ON 2 8.07.2010 ADMITTING TOTAL INCOME OF RS.50,901/- WHICH WAS PRO CESSED U/S 143(1). SUBSEQUENTLY, THE ASSESSING OFFICER CAME TO KNOW THAT THE ASSESSEE IS ONE OF THE PURCHASERS OF VILLA PLOT IN EMAAR HILLS TOWNSHIP (P) LTD., (EHTPL), HYDERABAD I.E. PLOT N O.B2 ADMEASURING 597 SQ.YARDS AND THAT THERE WAS AN INVE STIGATION BY THE CBI INTO THE AFFAIRS OF EHTPL AND CONNECTED GRO UP OF CASES AND HAS FILED A CHARGE SHEET. THE OUTCOME OF THE I NVESTIGATION BY THE CBI AND THE CHARGES FRAMED THEREON IS THAT THE VILLA PLOTS WERE SOLD AT A PRICE HIGHER THAN WHAT IS RECORDED I N THE MOU/ALLOTMENT LETTER OF REGISTERED DOCUMENT. IT WAS OBSERVED THAT THE RECORDED PRICE IS RS.5000/- PER SQ. YARD B UT THE AMOUNT ITA NO 127 OF 2021 RASHMI SINGH HYDERABAD PAGE 2 OF 5 PAID IN CASH WERE OVER AND ABOVE THE RECORDED PRICE OF RS.4000/- PER SQ. YARD TO RS.45,000/- PER SQ. YARD. THEREFORE , THE ASSESSING OFFICER REOPENED THE ASSESSMENT U/S 148 OF THE ACT. DURING THE REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REL IED UPON THE STATEMENT OF ONE OF THE DIRECTORS OF COMPANY, SRI K ONERU RAJENDRA PRASAD, AND SHRI TUMMALA RANGA RAO WHO MAR KETED THE PLOTS AND HELD THAT THE ASSESSEE HAS PAID THE C ASH COMPONENT OF RS.29,85,000/- AND HE ACCORDINGLY BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ASSESSMENT ORDER AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF AP PEAL: 1. THE LEARNED CIT (A) ERRED ON FACTS AND LAW. 2. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADD ITION OF RS.29,85,000 TOWARDS UNEXPLAINED MONEY. 3. THE CIT (A) BASED HIS ORDER ON PRESUMPTION OF FA CTS AND CIRCUMSTANTIAL EVIDENCES. 4. THE LEARNED CIT (A) OUGHT TO HAVE GIVEN THE ASSE SSEE AN OPPORTUNITY TO CROSS EXAMINE THE STATEMENTS OF T HIRD PARTIES RELIED UPON BY THE ASSESSING OFFICER. 5. ANY OTHER GROUND AT THE TIME OF HEARING 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT CASES OF SIMILAR ASSESSEES HAD COME UP BEFORE THE T RIBUNAL FOR ADJUDICATION AND THE B BENCH OF THIS TRIBUNAL IN TH E CASE OF SHRI G. MAHESH BABU IN ITA NOS 256/HYD/2015 AND OTHERS V IDE ORDERS DATED 27.11.2015 HAS CONSIDERED THE ISSUE AT LENGTH AND HAS REMANDED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RE- EXAMINATION. FOR THE SAKE OF READY REFERENCE, THE R ELEVANT PARAGRAPHS ARE REPRODUCED HEREUNDER: 23. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD. IT IS VERY MUCH EVIDENT FRO M THE ASSESSMENT ITA NO 127 OF 2021 RASHMI SINGH HYDERABAD PAGE 3 OF 5 ORDER THAT MAINLY RELYING UPON THE MATERIAL GATHERE D AS A RESULT OF INVESTIGATION MADE DURING THE ASSESSMENT PROCEEDING S OF EHTPL, PARTICULARLY ON THE BASIS OF STATEMENT RECORDED FRO M SHRI T.RANGA RAO, THE ASSESSING OFFICER HAS COME TO THE CONCLUSI ON THAT THE ASSESSEE HAS PAID ON MONEY TO THE EXTENT OF RS.1,99 ,20,000 OVER AND ABOVE THE RECORDED SALE CONSIDERATION. OF COURSE, B ESIDES THE STATEMENT OF SHRI T.RANGA RAO, IT IS SEEN THAT THE DEPARTMENT HAS GATHERED INFORMATION IN EXERCISE OF POWER UNDER S.1 33(6) FROM SOME OTHER BUYERS, WHO AGREED TO HAVE PAID ON-MONEY TOWA RDS PURCHASE OF PLOTS/VILLAS FROM EHTPL. IT IS RELEVANT TO NOTE THA T WHEN THE ASSESSEE WAS CALLED UPON TO EXPLAIN WHETHER HE HAS PAID ON-M ONEY, HE STOUTLY DENIED THE SAME AND INSISTED THAT APART FROM RECORD ED SALE CONSIDERATION, HE HAS NOT PAID ANYTHING MORE. IT IS THE PLEA OF THE ASSESSEE BEFORE THE CIT(A) AS WELL AS BEFORE US THA T THE ASSESSING OFFICER HAS UTILISED THE MATERIAL GATHERED AS A RES ULT OF INVESTIGATION/ENQUIRY ADVERSE TO THE ASSESSEE WITHO UT EITHER SUPPLYING THE SAME TO HIM OR ALLOWING AN OPPORTUNITY TO THE A SSESSEE TO CROSS EXAMINE SHRI T.RANGA RAO, WHOSE STATEMENT PRIMARILY FORMED THE BASIS OF THE ADDITION. WE FIND THAT THE AFORESAID S UBMISSIONS OF THE ASSESSEE ARE ACCEPTABLE. IT IS VERY MUCH CLEAR FROM THE ASSESSMENT ORDER THAT THOUGH THE ASSESSING OFFICER HAS SHRI G. MAHESH BABU, HYDERABAD, REFERRED TO THE INFORMATION RECEIVED TO SUGGEST THAT THE ASSESSEE HAS PAID AMOUNT OF RS.1,99,20,000, NEITHER IN THE ASSESSMENT ORDER NOR EVEN SUBSEQUENTLY NO MATERIAL HAS BEEN BR OUGHT ON RECORD TO SHOW WHAT EXACTLY IS THE INFORMATION/EVIDENCE, W HICH INDICATED THAT ASSESSEE HAS PAID THE ON MONEY OF RS.1,99,20,000. F URTHER, THE INVESTIGATION RESULTS OF CBI AS WELL AS STATEMENT O F SHRI T.RANGA RAO WHICH HAVE BEEN FOLLOWED BY WAY OF CHARGE SHEETS AN D SUPPLEMENTARY CHARGE SHEETS, THOUGH HEAVILY RELIED UPON BY THE AS SESSING OFFICER, BUT ADMITTEDLY THEY WERE NOT SUPPLIED TO THE ASSESS EE. EVEN THE LEARNED DEPARTMENTAL REPRESENTATIVE ACCEPTS THE AFO RESAID FACTUAL POSITION. THOUGH IN THE COURSE OF ASSESSMENT PROCEE DINGS THERE IS NO FETTER ON THE ASSESSING OFFICER TO CONDUCT ANY ENQU IRY OR INVESTIGATION AS FOUND NECESSARY FOR ASCERTAINING THE REAL NATURE OF TRANSACTION OR INCOME, AT THE SAME TIME, IT IS SALUTARY PRINCIPLE OF LAW THAT ANY ADVERSE MATERIAL GATHERED BY HIM, WHICH HE PROPOSES TO UTILISE AGAINST THE ASSESSEE, MUST BE CONFRONTED TO THE ASS ESSEE FOR ALLOWING HIM AN EFFECTIVE OPPORTUNITY OF REBUTTAL. THIS IS I N KEEPING WITH THE PRINCIPLE OF NATURAL JUSTICE THAT NO PERSON SHOULD BE CONDEMNED WITHOUT GIVING A FAIR OPPORTUNITY OF HEARING. IN TH E PRESENT CASE, THOUGH THE BASIS FOR ADDITION IS THE STATEMENT RECO RDED FROM SHRI T. RANGA RAO, ADMITTEDLY, THE ASSESSING OFFICER HAS NE ITHER SUPPLIED A COPY OF THE STATEMENT TO THE ASSESSEE NOR ALLOWED H IM AN OPPORTUNITY TO CROSS EXAMINE HIM, THOUGH THE ASSESSEE IN HIS LE TTER DATED 13.3.2014 HAS SPECIFICALLY ASKED FOR CROSS EXAMINAT ION OF SHRI T.RANGA RAO. IN THE AFORESAID VIEW OF THE MATTER, T HERE IS VIOLATION OF RULES OF NATURAL JUSTICE BY THE ASSESSING OFFICER W HILE MAKING THE ADDITION OF RS.1,99,20,000. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER, ON ACCOUNT OF ALLEGED PAYMENT OF ON-MONEY, CANNOT BE SUSTAINED. 24. HAVING HELD SO, IT IS NECESSARY TO EXAMINE WHET HER NON- COMPLIANCE OF THE RULES OF NATURAL JUSTICE IN THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE HAS MADE THE ASSE SSMENT VOID AB INITIO, OR THE ASSESSING OFFICER CAN BE ASKED TO DE CIDE THE ISSUE AGAIN ITA NO 127 OF 2021 RASHMI SINGH HYDERABAD PAGE 4 OF 5 AFTER FOLLOWING PRINCIPLES OF NATURAL JUSTICE, AS S HRI G. MAHESH BABU, HYDERABAD, REQUESTED BY THE EARNED DEPARTMENTAL REP RESENTATIVE. AS ALREADY STATED ELSEWHERE IN THE ORDER, THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HON'BL E SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA), TO P LEAD THAT NOT ALLOWING THE ASSESSEE TO CROSS EXAMINE THE WITNESS HAS RENDERED THE ASSESSMENT ORDER VOID. HOWEVER, ON A PERUSAL OF THE SAID JUDGMENT OF THE HON'BLE SUPREME COURT IT IS FOUND TO BE FACTUAL LY DISTINGUISHABLE. IN THAT CASE, HON'BLE SUPREME COURT HAS INITIALLY R EMITTED BACK THE MATTER TO THE TRIBUNAL FOR DECIDING THE ISSUE IN ON E WAY OR THE OTHER, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. HOWEVER, IT IS NOTICED THAT THE HON'BLE SUPREME COURT ULTIMATELY A LLOWED ASSESSEE'S APPEAL BECAUSE THE TRIBUNAL WHILE EXAMINING THE ISS UE OF CROSS EXAMINATION OF WITNESS HAS MERELY OBSERVED THAT EVE N SUCH CROSS- EXAMINATION WOULD NOT HAVE IMPROVED THE ASSESSEE'S CASE. HON'BLE SUPREME COURT HELD, AS THE DEMAND RAISED AGAINST AS SESSEE WAS SOLELY RELYING UPON THE STATEMENT OF WITNESS, DENIA L OF CROSS EXAMINATION TO ASSESSEE VITIATED THE ORDER. UNLIKE THE CASE OF ADAMAN TIMBER INDUSTRIES (SUPRA) IN ASSESSEE'S CASE STATEM ENT OF SHRI T.RANGA RAO IS NOT THE ONLY PIECE OF EVIDENCE RELIE D UPON BY THE ASSESSING OFFICER. IT IS RELEVANT TO NOTE THAT APAR T FROM THE STATEMENT OF SHRI T.RANGA RAO, THERE ARE OTHER INFORMATION GA THERED BY THE DEPARTMENT BY TAKING RECOURSE TO S.133(6) AS PER WH ICH SOME OF THE BUYERS OF THE PLOTS HAVE ADMITTED OF HAVING PAID ON - MONEY. FURTHER, THROUGH A PROCESS OF INVESTIGATION, CBI HAS FOUND I RREGULARITIES IN THE ACTIVITIES OF EHTPL AND SUBMITTED CHARGE SHEET(S). AS THE STATEMENT OF SRHI T.RANGA RAO, THE ENTIRE CHARGE SHEET(S) FIL ED BY CBI AND INFORMATION GATHERED BY THE DEPARTMENT THROUGH ENQU IRY HAVE NOT BEEN BROUGHT ON RECORD BEFORE US EITHER BY ASSESSEE OR DEPARTMENT, WE ARE UNABLE TO EXAMINE THE EXTENT OF ASSESSEE'S I NVOLVEMENT, IF AT ALL, IN THE IRREGULARITIES ALLEGED BY CBI OR WHETHE R THE ASSESSEE HAS ALSO BEEN IMPLICATED BY THE INVESTIGATION AGENCY OR ANY OTHER PERSON. THEREFORE, IN OUR VIEW, ISSUE RELATING TO PAYMENT O F ON-MONEY REQUIRES TO BE EXAMINED AFRESH BY ASSESSING OFFICER AFTER CONFRONTING EVIDENCE/MATERIAL SOUGHT TO BE RELIED UPON TO THE A SSESSEE AND SEEKING HIS RESPONSE ON THEM. THE ASSESSING OFFICER MUST ALSO DISCLOSE TO SHRI G. MAHESH BABU, HYDERABAD, THE ASS ESSEE THE MATERIAL/INFORMATION ON THE BASIS OF WHICH HE HAS Q UANTIFIED THE ON- MONEY PAYMENT OF RS.1,99,20,000. IF THE ASSESSING O FFICER IS ABLE TO ESTABLISH ON THE BASIS OF EVIDENCE GATHERED THAT TH E ASSESSEE HAS PAID ON- MONEY TO THE EXTENT QUANTIFIED BY HIM, THEN HE CAN MAKE THE ADDITION UNDER S.69B. ON THE FLIP SIDE, IF THERE IS NO EVIDENCE AVAILABLE ON RECORD TO DIRECTLY LINK THE ASSESSEE T OWARDS PAYMENT OF ON-MONEY, THEN MERELY ON THE BASIS OF THE FACT THAT SOME OTHER BUYERS HAVE ACCEPTED PAYMENT OF ON-MONEY, NO ADDITION CAN BE MADE. WITH THE AFORESAID OBSERVATIONS, WE REMIT THE ISSUE TO T HE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RE-DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING REASONABLE OPPORT UNITY TO THE ASSESSEE, DULY COMPLYING WITH THE PRINCIPLES OF NAT URAL JUSTICE. THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 4. WITH SIMILAR DIRECTION, THE ASSESSMENT OF ASSESS EE IS ALSO SET ASIDE AND THE ISSUE IS REMANDED TO THE FIL E OF THE ITA NO 127 OF 2021 RASHMI SINGH HYDERABAD PAGE 5 OF 5 ASSESSING OFFICER FOR RECONSIDERATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIV EN A FAIR OPPORTUNITY OF HEARING. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 29 TH APRIL, 2021. VINODAN/SPS COPY TO: S.NO ADDRESSES 1 MRS. RASHMI SINGH, PLOT NO.176, ROAD NO.72, PRA SHASHAN NAGAR, JUBILEE HILLS, HYDERABAD 500096 2 DY.CIT CIRCLE 6(1) HYDERABAD 3 CIT (A) - 12, HYDERABAD 4 PR. CIT - 12, HYDERABAD 5 DR, ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER