Dy. Commissioner of Income Tax , Central Circle-8, Hyderabad V. I Mallapa Raju, Hyderabad

ITA 131/Hyd/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8509 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Keywords: Unexplained investment; Additional evidence; Assessment record
• Section: 142(2A)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 131/HYD/2019 ASSESSMENT YEAR: 2008-09 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(1), HYDERABAD VS SHRI I MALLAPA RAJU, SECUNDERABAD [PAN: AFPPR5791B] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI Y.V.S.T.SAI, CIT-DR FOR ASSESSEE : SHRI K.C.DEVDAS, AR DATE OF HEARING : 05-01-2021 DATE OF PRONOUNCEMENT : 12-01-2021 O R D E R PER BENCH : THIS REVENUES APPEAL FOR AY.2008-09 ARISES FROM THE CIT(A)-12, HYDERABADS ORDER DATED 12-11-2018 PASSED IN CASE NO.10317/2017-18 IN PROCEEDINGS U/S.143(3) OF THE IN COME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE/PAPER BOOK PERUSED. 2. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE CANVASSED IN THE INSTANT APPEAL SEEKS TO REVERSE THE ASSESSING OFFICE RS ACTION TREATING THE ASSESSEES LOANS OF RS.7,57,98,800 /- AS HIS INCOME IN THE COURSE OF THE REGULAR ASSESSMENT FRAMED ON 01- 08-2011. LEARNED CIT-DR VEHEMENTLY CONTENDED DURING ITA NO. 131/HYD/2019 :- 2 -: THE COURSE OF HEARING THAT THE ASSESSING OFFICER HAD RIGHTLY ADDED THE IMPUGNED SUM SINCE THE ASSESSEE HAD NEITHER PUT IN APPEARANCE IN SECTION 142(2A) SPECIAL AUDIT PROCEE DINGS NOR HE HAD SUFFICIENTLY DISCHARGED ONUS OF HAVING RECEIV ED THE SUM IN ISSUE FROM ONE SHRI B.SURYANARAYANA RAJU. HE NEX T TOOK US TO THE CIT(A)S DETAILED DISCUSSION ON THE ISSUE READIN G AS FOLLOWING: 7. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, THE ORDER OF THE ASSESSING OFFICER, THE ADDITIONAL EVIDENCE FURNISHED AS WELL AS THE COMMENTS OF THE ASSESSING OFFICER THEREON. THE ONLY ISSUE IN THIS CASE IS THE ADDITION OF RS.7 ,57,98,800/- AS UNEXPLAINED INVESTMENT MADE BY THE ASSESSING OFFICE R. FROM THE ASSESSMENT ORDER, WHICH IS REPRODUCED IN PARA 6.1 A BOVE, IT CAN BE SEEN THAT EVEN BEFORE THE ASSESSING OFFICER, THE AS SESSEE HAD STATED THAT THE AMOUNTS WERE ADVANCED BY SHRI SURYANARAYAN A RAJU, BUT THE ASSESSING OFFICER MADE THE ADDITION ON THE GROU NDS THAT THE ASSETS FROM THESE ADVANCES WERE ACQUIRED BY SHRI I. MALLAPA RAJU, I.E., THE ASSESSEE, IN HIS NAME. THE ASSESSING OFFI CER FURTHER OBSERVED THAT THE ASSESSEE HAD FILED A NIL RETURN, AND STATING THAT THE SAID ADVANCES PURPORTED TO BE TAKEN BY HIM WERE NOT COMMENSURATE WITH THE RETURNED INCOME, THE ASSESSIN G OFFICER WENT ON TO TREAT THE ENTIRE AMOUNT OF RS.7,57,98,800/- A S INCOME IN THE HANDS OF THE ASSESSEE. THUS, IT IS SEEN THAT THERE IS NO DISPUTE ON THE FACT THAT THE AMOUNTS IN QUESTION WERE ADVANCED TO THE ASSESSEE BY SHRI B.SURYANARAYANA RAJU, AND THIS FACT IS NOT DIS PUTED BY THE ASSESSING OFFICER ALSO. THE A.O. HAS SIMPLY MADE TH E ADDITION ON THE GROUND THAT THE INVESTMENTS ARE MADE BY THE ASSESSE E IN HIS OWN NAME. NOWHERE HAS HE QUESTIONED OR DISPROVED THAT T HE AMOUNTS WERE ADVANCED BY SURYANARAYANA RAJU. IT HAS BEEN FU RTHER CONTENDED DURING THE COURSE OF THE APPELLATE PROCEE DINGS THAT THE STATEMENT OF AFFAIRS OF ALL THE FAMILY MEMBERS WERE SUBMITTED DURING THEIR RESPECTIVE ASSESSMENT PROCEEDINGS, AND WERE A LREADY AVAILABLE WITH THE ASSESSING OFFICER IN THE ASSESSMENT RECORD S. THE ADVANCE IN QUESTION GIVEN TO THE ASSESSEE IS DULY REFLECTED UN DER THE HEADING 'DUES TO FAMILY MEMBERS'. FURTHER, THE AR OF THE AP PELLANT HAS FURNISHED THE BANK ACCOUNTS OF THE ASSESSEE AS WELL AS SHRI B.SURYANARAYANA RAJU AND THE OTHER FAMILY MEMBERS, IN WHICH ALL THE TRANSACTIONS ARE DULY REFLECTED. DURING REMAND PROCEEDINGS BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS FILE D A WRITTEN SUBMISSION ON 02-08-2017, STATING AS UNDER: ITA NO. 131/HYD/2019 :- 3 -: 'V) KIND REFERENCE IS INVITED TO THE BANK ACCOUNT O F SRI MALLAPPA RAJU WITH AXIS BANK. THE ENTRIES IN THE ACCOUNT EXPLAIN THE FOLLOWING CREDIT ENTRIES (DEPOSITS) PERTAINING TO TRANSFER OF THE AM OUNTS BY B.SURYANARAYANA RAJU FROM HIS SAVINGS BANK ACCOUNT WITH THE VERY SAME AXIS BANK. 'EXTRACTED FROM AXIS BANK ACCOUNT OF SRI I. MALLAPA RAJU' DATE OF CREDIT FROM WHOM AMOUNT (RS.) 17/10/2006 B.S.RAJU 59,62,500 31/10/2006 -DO- 2,81,22,000 01/11/2006 -DO- 3,74,96,000 01/11/2006 -DO- 42,18,300 7,57,98,800 HERE B.S.RAJU INDICATES B.SURYANARAYANA RAJU VI) THE ABOVE AMOUNT HAS FLOWN INTO THE INVESTMENT IN IMMOVABLE PROPERTIES AT NAGPUR, BY SRI I.MALLAPPA RAJU. THE SOURCE WAS A S EXPLAINED ABOVE WAS FROM SRI B. SURYANARAYANA RAJU. VII) KIND REFERENCE OF THE BANK ACCOUNT OF SRI B.SU RYANARAYANA RAJU WITH AXIS BANK REVEALS THE FOLLOWING DEBITS IN HIS ACCOU NT PERTAINING TO THE TRANSFER OF THE AMOUNTS TO THE BANK ACCOUNT OF SRI MALLAPA RAJU WITH AXIS BANK. DATE OF DEBIT TO WHOM AMOUNT (RS.) AMOUNT (RS.) 17/10/2006 MALLAPA RAJU 59,62,500 31/10/2006 MALLAPA RAJU B.JHANSI RANI, W/O.B.SURYANARAYANA RAJU B.RADHA RAJU, W/O. B.RAMA RAJU 2,81,22,000 29,22,000 2,23,64,000 5,34,08,000 01/11/2006 MALLAPA RAJU MALLAPA RAJU B.JHANSI RANI 3,74,96,000 42,18,300 62,82,300 4,79,96,600 10,73,67,100 VIII) FROM THE ABOVE DETAILS IT COULD THEREFORE BE NOTICED THAT THE EFFECTIVE TRANSFER OF THE AMOUNTS FROM THE ACCOUNT OF B.SURYA NARAYANA RAJU TO THE ACCOUNT OF I MALLA A RAIU ARE AS UNDER: DATE OF CREDIT AMOUNT (RS.) 17/10/2006 59,62,500 31/10/2006 2,81,22,000 01/11/2006 3,74,96,000 01/11/2006 42,18,300 7,57,98,800 ITA NO. 131/HYD/2019 :- 4 -: FROM THE TWO REMAND REPORTS OF THE ASSESSING OFFICE R REPRODUCED IN PARA 6.3 AND PARA 6.7 ABOVE, IT CAN BE SEEN THAT THIS EX PLANATION, ALONGWITH THE BANK STATEMENTS HAS BEEN DULY FILED BEFORE THE ASSE SSING OFFICER, BUT THE ASSESSING OFFICER HAS SIMPLY BRUSHED ASIDE THE SAME BY STATING THAT 'THE ACCEPTABILITY OF BANK STATEMENTS WITHOUT DUE AUDIT/ REFLECTION OF SAME IN STATEMENT OF AFFAIRS AND ITS GENUINENESS AS ACCOUNT ED TRANSACTIONS STANDS UNRECONCILABLE ON MERITS. THE STATEMENTS PROVIDED A RE RELATED TO AXIS BANK AND THE BANK ACCOUNT MENTIONED IN THE RETURN OF INC OME IS NOTICED AS HDFC BANK IN THE CASE OF SRI B.SURYANARAYANA RAJU'. IN T HIS REGARD, IT HAS BEEN EXPLAINED BY THE APPELLANT'S AR DURING REMAND PROCE EDINGS BEFORE THE ASSESSING OFFICER, AND AGAIN DURING APPELLATE PROCE EDINGS BEFORE THE UNDERSIGNED, THAT THE BANK STATEMENT OF SHRI B.SURY ANARAYANA RAJU WITH AXIS BANK WAS FILED TO EXPLAIN THE TRANSACTIONS IN QUESTION, WHEREAS THE BANK ACCOUNT WITH HDFC BANK WAS MENTIONED IN THE RE TURN FOR ENABLING THE DEPARTMENT TO REMIT THE PROCEEDS OF REFUND IF ANY. THIS DOES NOT MEAN THAT THE ASSESSEE / APPELLANT CANNOT HAVE ANY OTHER BANK ACCOUNT. IT HAS ALSO BEEN EXPLAINED THAT THE CERTIFIED EXTRACTS OF THE B ANK ACCOUNT FILED BEFORE THE ASSESSING OFFICER WERE THE COPIES CERTIFIED BY THE OFFICER OF THE DIRECTORATE OF THE ENFORCEMENT. THE EVIDENCES FILED BY THE ASSESSEE/APPELLANT, THEREFORE, CANNOT BE BRUSHED AS IDE BY SIMPLY STATING THAT THEY ARE UNACCEPTABLE. THE ASSESSING OFFICER, INSPITE OF HAVING BEEN GIVEN OPPORTUNITIES TWICE TO EXAMINE THE EVIDENCES FILED, HAS NOT BEEN ABLE TO POINT OUT ANY VALID REASONS FOR NOT ACCEPTING TH E SAME. INSTEAD OF GETTING SOME ENQUIRIES CONDUCTED IF HE HAD ANY DOUBT ABOUT THE BANK STATEMENTS FURNISHED, THE AO HAS JUST MADE SOME VAGUE REMARKS, WHICH CANNOT BE TAKEN ANY COGNIZANCE OF. APART FROM THE ABOVE, THE BASIC ISSUE IN THE PRESEN T APPEAL IS WHETHER SHRI B.SURYANARAYANA RAJU HAD ADVANCED THE AMOUNTS IN QUESTION TO THE APPELLANT, WHICH IS THE SOURCE OF T HE APPELLANT FOR THE INVESTMENT MADE. AS DISCUSSED EARLIER, THIS HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ALSO. IF AT ALL THE AMOUNTS WERE UNEXPLAINED, THEREFORE, THE ADDITION HAD TO BE MADE IN THE HANDS OF SHRI B.SURYANARAYANA RAJU, IN WHOSE CASE, THE ASSESSMENT FOR AY 2007-08 WAS COMPLETED U/S.143(3) ON 14-072010, EARLIER TO THE C OMPLETION OF THE ASSESSMENT IN APPEAL HERE. IT IS ALSO THE CONTENTION OF THE APPELLANT'S AR THA T THE INVESTMENT IN QUESTION WAS ACTUALLY MADE IN THE AY 2007-08, AND O N THIS GROUND ALSO, NO ADDITION COULD HAVE BEEN MADE IN THE AY 2008-09. I T CAN BE SEEN FROM THE REMAND REPORT REPRODUCED ABOVE IN PARA 6.7 ABOVE TH AT THE ASSESSING OFFICER HAS REJECTED THIS CONTENTION ON THE GROUNDS THAT THE ASSESSEES CONTENTION ON THIS ANALOGY IS APPARENTLY NOT RECONC ILABLE AND SAME IS NOT ACCEPTABLE NOT TO TREAT AS UNEXPLAINED INVESTMENT O F ASSESSEE OF AY 2008- 09 AS IT IS APPEARING AS OPENING ASSET IN AY 2008-0 9 WITHOUT BEING REFLECTED IN EARLIER YEAR BOOKS. FURTHER THE ASSESS EE COULD NOT BRING OUT THIS CLEAR FACT TO TREAT THE SAME AS INVESTMENT OF AY 20 07-08 DURING THE PENDENCY OF ASSESSMENT PROCEEDINGS'. THIS STATEMENT OF THE ASSESSING OFFICER IS ALSO FOUND TO BE VAGUE AND UNACCEPTABLE. THE CONTENTION OF THE ASSESSING OFFICER THAT THE INVESTMENT IS APPEARING AS OPENING ASSET IN THE AY 2008-09 AND THEREFORE IT SHOULD BE TAXED IN THE SAID YEAR ONLY, INFACT GOES TO SHOW THAT THE INVESTMENT WAS NOT MADE DURIN G AY 2008-09 I.E., THE ITA NO. 131/HYD/2019 :- 5 -: YEAR UNDER APPEAL. BY MAKING SUCH A STATEMENT, THE ASSESSING OFFICER HAS INFACT HIMSELF ACCEPTED THAT THE INVESTMENT DOES NO T PERTAIN TO THE AY 2008- 09, SINCE IT WAS SHOWN AS OPENING ASSET IN AY 2008- 09. IN VIEW OF THE DETAILED DISCUSSION IN THE PRECEDING PARAS, THE ADDITION MADE, BEING FOUND TO BE WITHOUT ANY MERITS , IS ORDERED TO BE DELETED. ALL THE GROUNDS RELATED TO THIS ISSUE ARE ALLOWED. 3. THE CASE FILE INDICATES THAT THE ASSESSEE JUST TO FIL E HIS ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES IN THE LOWER APPELLATE PROCEEDINGS. THE CIT(A) SOUGHT F OR REMAND REPORT(S). WE NOTICE FROM PAGE 14 PARA 7 OF THE CIT(A) S ORDER THAT THE DATE(S) OF IMPUGNED CREDITS IN ASSESSEES NAME ARE 17- 10-2006, 31-10-2006 AND 01-11-2006 (TWO COUNTS) INVO LVING CORRESPONDING SUMS OF RS.59,62,500/-, 2,81,22,000/- , 3,74,96,000/- AND 42,18,300/-; RESPECTIVELY AGGREGATING TO RS.7,57,98,800/- FORMING SUBJECT MATTER OF THE IMPUGNED ADDITION. THE ASSESSING OFFICERS TWIN REMAND REPOR T(S) TO THIS EFFECT ALSO FAILED TO REBUT THIS CLINCHING ASPECT. WE THEREFORE SEE NO JUSTIFICATION IN REVENUES ENDEAVOUR THAT THE IMP UGNED ADDITION OF THE CREDITS RECEIVED IN FY.2006-07 I.E., AY.2007-08 ARE LIABLE TO BE ADDED IN THIS AY.2008-09. THE NECESS ARY COROLLARY THAT FLOWS THEREFORE IS THAT THE ASSESSEES CR EDITS IN AY.2007-08 ONLY FORMED SOURCE OF THE LAND TRANSACTIONS / INVESTMENTS EXECUTED IN FY.2007-08 I.E., AY.2008-09 IN ISSUE BEFORE US. WE THUS FIND NO REASON TO ACCEPT THE REVENUE S SOLE GRIEVANCE RAISED IN THE INSTANT CASE. 4. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JANUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.GO DARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 12-01-2021 TNMM ITA NO. 131/HYD/2019 :- 6 -: COPY TO : 1.THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CI RCLE- 3(1), HYDERABAD. 2.SHRI I.MALLAPA RAJU, H.NO.2-12-3/1, SATYAM ENCLAV E, N.H.7, JEEDIMETLA, SECUNDERABAD. 3.CIT(APPEALS)-12, HYDERABAD. 4.PR.CIT(CENTRAL)-HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.