Asst. Commissioner of Income Tax, Central Circle-3(2), Hyderabad V. Sreevarun Atluri , Hyderabad

ITA 128/Hyd/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5683 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Appeal Filed On: 30-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T. SUNIL GOUTAM
• Keywords: Unexplained investment; TDS
• Section: 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “A”, HYDERABAD (Through Virtual Hearing) BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SRI S.S. GODARA, JUDICIAL MEMBER ITA No. 128/Hyd/2020 A.Y. 2017-18 ACIT, Central Circle-3(2), Hyderabad. Vs. Sreevarun Atluri, Hyderabad. PAN: AJGPA 5486 K (Appellant) (Respondent) Assessee by Sri Hari Prasad Kota Revenue by Sri T. Sunil Goutam, Sr. AR Date of hearing: 02/12/2021 Date of pronouncement: 23/12/2021 ORDER PER A. MOHAN ALANKAMONY, A.M: This appeal is filed by the Revenue against the order of the Ld. CIT(A)-11, Hyderabad in appeal No. 117/2018-19, dated 29/10/2019 passed U/s. 143(3) r.w.s 250(6) of the Act for the A.Y. 2017-18. 2. The Revenue has raised five grounds in its appeal however, the crux of the issue is that: “The Revenue is aggrieved by the order of the ld. CIT (A) who had deleted the addition made by the Ld. AO for Rs. 5,43,44,185/- towards unexplained cash credits/ 2 jewellery/credit card bill payment/wrong claim of agricultural income and unexplained investment in movie production.” 3. At the outset, the Ld. DR submitted that there is a delay of 04 days in filing the appeal before the Tribunal. In this regard, the Revenue had filed condonation petition and the relevant portion from the Revenue’s condonation petition is extracted herein below for reference: “The order of the Hon’ble CIT(A)-11, Hyderabad in the above mentioned case in appeal No.117/2018-19 dated 29/10/2019 was received in the office of the Pr. CIT (Central), Hyderabad on 28/11/2019. The due date for filing the appeal expired on 27/01/2020. The due date fell on a Monday and I was in Chennai to represent myself before Settlement Commission on 27/01/2020 and 28/01/2020 (a copy of attending Settlement Commission is enclosed). I am filing the appeal on 31/01/2020. There is a delay of four days in filing the appeal. 2. I humbly submit that upto 31/12/2019, I along with the available staff are busy in time barring assessments and during first half of this month I am busy with the finalization of settlement report in three cases. Copy of settlement commission order directing the undersigned to be present before settlement commission is enclosed for ready reference. 3. I humbly submit that the delay in filing is due to circumstances beyond my control. I therefore request the Hon’ble ITAT to kindly condone the delay of four days and kindly admit the appeal.” 4. On perusing the reasons stated by the Revenue (ACIT, Central Circle-3(2), Hyderabad) for filing the appeal beyond the prescribed time limit of 04 days we are of the view that the delay had occurred due to circumstances beyond the control of the Revenue. Therefore, we hereby conde the delay of 04 days in filing the appeal before the Tribunal and proceed to adjudicate the case on merits. 3 5. The brief facts of the case are that the assessee is an individual engaged in business, income from house property and income from other source. Pursuant to search in the case M/s. Western Constructions and its four partners notice was sent to the assessee U/s. 143(2) of the Act. After several intimations and show cause notice sent to the assessee, the assessee responded to the information sought by the Revenue. After considering the submissions of the assessee, the Ld. AO opined that several cash deposit, jewellery, bank deposit were unexplained and also 30% of the agricultural income claimed by the assessee was not with respect to agricultural operation. The ld.AO further observed that the assessee had incurred expenditure of Rs. 5,43,44,185/- towards movie production and it was also opined by the ld. AO that the assessee had not deducted TDS wherever applicable because the assessee had not furnished proper details. Due to these shortcomings the Ld.AO made addition of Rs. 5,43,44,185/- towards unexplained cash deposits, jewellery, credit card bill payments and bogus claim of agricultural income. 6. Before us the Ld. DR submitted that the Ld.CIT (A) has deleted the addition without considering the findings of the Ld. AO and therefore it was prayed that the order of the Ld. AO may be upheld. Ld. AR on the other hand argued in support of the order of the Ld. CIT (A). 4 7. We have heard the rival submissions and carefully perused the materials on record. From the orders of the Ld. AO it is apparent that thought he has cited various discrepancies he has not made conclusive finding on any specific addition. Instead, he has made an adhoc addition of Rs. 5,43,44,185/- towards unexplained source of fund for producing movie which ended up in loss. This ambiguous findings of the Ld.AO does not seem to be appropriate when such an addition is made of high magnitude on an individual. The ld. CIT (A) while dealing with the issue after detailed examination has deleted the addition by observing as follows: “6. I have considered the assessment order and submissions of the appellant. From the facts brought on record, it is seen that the appellant has claimed ‘cost of production’ of the movie at Rs. 5,43,44,185/- reflected in AY 2017-18. The entire amount is brought to tax as unexplained investment of the assessee. There is no discussion in the order about the genuineness of sources for the above expenses nor the same is doubted by the AO. The AO’s discussion in the order is about non-deduction of tax at source (TDS) for the above expenditure. But disallowance is not made U/s. 40(a)(ia) of the IT Act, 1961. The AO has mentioned that the addition is on account of comprehensive and multiple discrepancies involving complex violation of provisions of IT Act, without really bringing out any such discrepancies in a concrete way in the order. The conclusions drawn by the AO are without basis and without bringing any material on record. The addition is made without even discussion how the same is unexplained investment in the order. Even the TDS provisions are not applicable to the case of the appellant, as it is the first year where the appellant has crossed the turnover warranting compulsory audit. The appellant is not under obligation, for making TDS on account of above. In view of the above, it is held that there is no basis for the AO to make the addition and the same is liable to be deleted. The addition of Rs. 5,43,44,185/- is deleted. The appellant succeeds on the ground.” 8. On perusing the order of the Ld. CIT (A), we find merit in the same because there is no discussion in the order of the Ld. AO to fix the 5 assessee towards any specific discrepancies however, made addition for the same citing expenditure incurred towards producing a loss making movie. Considering these facts and circumstances of the case, we do not find any infirmity in the order of the Ld. CIT (A). Therefore, we hereby uphold the order of the Ld. CIT (A). 9. In the result, appeal of the Revenue is dismissed. Pronounced in the open Court on 23rd December, 2021. Sd/- Sd/- (S.S. GODARA) (A. MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated:23rd December, 2021. OKK Copy to:- 1) Appellant: Asst. Commissioner of Income Tax, Central Circle-3(2), 7th Floor, Aayakar Bhavan, Hyderabad. 2) Respondent: Sri Sree Varun Atluri, Villa A 84, Hill Ridge Villas, ISB Road, Gachibowli, Hyderabad. 3) The CIT(A)-11, Hyderabad. 4) The Pr. CIT (Central), Hyderabad. 5) The DR, ITAT, Hyderabad 6) Guard File