Singirikonda Ravinder, Hyderabad V. Income Tax Officer, Suryapet

ITA 1377/HYD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6209 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 06-09-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 24-10-2013
• Court: TRIBUNAL
• Department Lawyers: K J RAO; U MINICHANDRAN DRS
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Revised return
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. ASST. YEAR APPELLANT RESPONDENT 1376/HYD/13 2005 - 06 SINGIRIKONDA RAMULAMMA, SURYAPET [PAN: AJEPS4352A] INCOME TAX OFFICER, SURYAPET 1377/HYD/13 2005 - 06 SINGIRIKONDA RAVINDER, SURYAPET [PAN: AJEPS4351D] 1378/HYD/13 2005 - 06 SINGIRIKONDA KARUNA, SURYAPET [PAN: APJPS1303H] 1383/HYD/13 2005 - 06 SINGIRIKONDA MANASA, SURYAPET [PAN: BCQPS9810K] FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI K.J. RAO & SMT U. MINICHANDRAN, DRS DATE OF HEARING : 06-09-2016 DATE OF PRONOUNCEMENT : 14-09-2016 O R D E R THESE FOUR APPEALS PERTAIN TO THE PARTNERS OF M/S. MA MATHA SILK CENTRE, SURYAPET AND HAVE COMMON ISSUES. THER EFORE, THESE FOUR APPEALS ARE CLUBBED AND HEARD TOGETHER AND DECID ED BY THIS COMMON ORDER. ALL THE SAID APPEALS ARE FILED AGAIN ST THE ORDER(S) DATED 29-08-2013 OF THE COMMISSIONER OF INCOME TAX (A PPEALS)-18, MUMBAI WITH CAMP OFFICE AT HYDERABAD HAVING CONCURREN T JURISDICTION OVER ASSESSEES CASES. 2. FOR THE SAKE OF DISCUSSION, THE APPEAL IN THE CA SE OF SHRI SINGIRIKONDA RAVINDER IN ITA NO. 1377/HYD/2013 IS CONSIDERED IN DETAIL. I.T.A. NOS. 1376/HYD/2013 1377/HYD/2013 1378/HYD/2013 1383/HYD/2013 :- 2 -: 2.1. ASSESSEE HEREIN IS A PARTNER IN M/S. MAMATHA SI LK CENTRE AND OTHER FIRMS AT SURYAPET. SURVEY OPERATIONS U/S. 133A OF THE INCOME TAX ACT [ACT] WAS CONDUCTED IN SINGIRIKO NDA GROUP OF CASES ON 31-08-2006. A STATEMENT OF ASSESSEE WAS R ECORDED ON 08-09-2006 IN WHICH ASSESSEE WAS QUESTIONED ABOUT FIN DINGS OF THE DEPARTMENT IN THE COURSE OF SURVEY OPERATIONS CONDUC TED IN THE BUSINESS PREMISES. ASSESSEE HAD DECLARED VOLUNTARIL Y ON BEHALF OF HIMSELF AND HIS FAMILY MEMBERS, ADDITIONAL TAXES OF R S. 15 LAKHS ( SIC ). IT WAS ALSO SUBMITTED THAT THERE ARE DIFFERENCES IN S TOCK OF M/S. MAMATHA SILK CENTRE TO AN EXTENT OF RS. 30 LAKHS A ND HE WOULD EXPLAIN THE SOURCES OF INVESTMENT IN M/S. MAMATH A LODGE TO AN EXTENT OF RS. 18 LAKHS. IN ORDER TO COVER UP ALL THE ISSUES, HE HAS OFFERED TO PAY ADDITIONAL TAXES ON THE DAY OF SURVE Y, NOT ONLY IN HIS NAME BUT ALSO IN THE NAMES OF HIS FAMILY MEMBERS. ASSESSEE HAS ORIGINALLY FILED HIS RETURN OF INCOME FOR THE AY. 2005-06 PRIOR TO SURVEY ON 30-11-2005 DECLARING INCOME OF RS. 1,04 ,000/-. 2.2. CONSEQUENT TO THE SURVEY OPERATIONS, ASSESSEE FIL ED A REVISED RETURN OF INCOME ADMITTING AN INCOME OF RS. 10 ,55,100/- AND ALSO PAYING TAXES THEREON. ASSESSING OFFICER (AO ) HOWEVER, DID NOT AGREE WITH THE REVISED RETURN FILED, AS IT WAS FIL ED WITHOUT ANY ENCLOSURES/DETAILED STATEMENT OF COMPUTATION OF INCOME ETC ., AND ISSUED A DEFECTIVE LETTER U/S. 139(9) OF THE ACT ON 10 -07-2007 AND TREATED THE SAME AS INVALID SUBSEQUENTLY. LATER, AS SESSEE FILED ANOTHER REVISED RETURN ON 20-12-2007 DECLARING THE OR IGINALLY RETURNED TOTAL INCOME OF RS. 1,04,000/-, THEREBY WITHDRA WING THE HIGHER RETURN OF INCOME FILED IN BETWEEN ON 25-09-20 06. AO IN THE COURSE OF SCRUTINY PROCEEDINGS HAS FOUND OUT THAT ASSES SEE HAS TO EXPLAIN INVESTMENT TO AN EXTENT OF RS. 4,60,000/- IN THE MONEY LENDING ACTIVITY, AS HE HAS OFFERED INTEREST TO AN EXTEN T OF RS. I.T.A. NOS. 1376/HYD/2013 1377/HYD/2013 1378/HYD/2013 1383/HYD/2013 :- 3 -: 56,000/-. ESTIMATING THE INTEREST @ 12%, THE CAPITAL AMO UNT WAS DETERMINED AT RS. 4,60,000/- AND ON THE REASON THAT ASS ESSEE HAS NOT EXPLAINED THE SOURCES THEREON, AN AMOUNT OF RS. 4,6 0,000/- WAS ADDED. AO HAS ACCEPTED THE INCOME AS PER THE ORI GINAL RETURN AT RS. 1,04,000/- AND ADDED THE ADDITIONAL INCOME OFFE RED IN THE REVISED RETURN, TREATED AS INVALID RETURN BY THE AO, AT RS. 10,55,100/- AND ALSO MADE AN ADDITION OF RS. 4,60,00 0/-, THEREBY DETERMINING TOTAL INCOME AT RS. 16,19,100/-. 3. ASSESSEE CONTESTED THE SAME BEFORE THE LD. CIT(A) . LD. CIT(A) WHILE ANALYZING THE STATEMENTS OF VARIOUS PROC EEDINGS IN THE GROUP AND THE EXCESS STOCK FOUND IN THE CASE OF A FIRM , HAS CONFIRMED THE ADDITION OF RS. 10,55,100/- ON ACCOUNT OF UNEXPLAINABLE ASSETS AND SINCE NO EXPLANATION WAS GIV EN FOR THE SOURCE OF MONEY IN THE MONEY LENDING ACTIVITY, THE ADD ITION OF RS. 4,60,000/- AS UNEXPLAINED INVESTMENT WAS ALSO CONFI RMED. ACCORDINGLY, HE DISMISSED THE APPEAL, WITHOUT CONSIDER ING ASSESSEES CONTENTIONS. 4. BEFORE US, LD. COUNSEL SUBMITTED THAT ASSESSEE HAS VOLUNTARILY FILED THE REVISED RETURN WHICH IS WITHIN TH E TIME. THE ONLY ISSUE IS THAT THE SOURCES AND THE NATURE OF INCOME ADMITTED HAD NOT BEEN STATED IN THE SAID RETURN. AS AO WRONGLY CONSIDERED THE SAME AS INVALID RETURN, ASSESSEE HAS TO WITHDRAW THE SAME BY FILING THE ORIGINALLY RETURNED INCOME IN SECOND REVI SED RETURN WHICH IS OUTSIDE THE TIME LIMITS PROVIDED UNDER THE ACT. IT WAS THE SUBMISSION THAT THERE IS NO BASIS FOR MAKING THE ADDIT ION OF RS. 10,55,100/- WHICH WAS WITHDRAWN AND FURTHER MAKING AN ADDITION OF RS. 4,60,000/- AS ASSESSEE WAS OFFERING SIMILAR INTEREST INCOMES I.T.A. NOS. 1376/HYD/2013 1377/HYD/2013 1378/HYD/2013 1383/HYD/2013 :- 4 -: IN EARLIER YEARS ALSO. IT WAS SUBMITTED THAT THERE IS NO BASIS FOR CONFIRMING BOTH THE AMOUNTS. 5. LD. DR HOWEVER, RELIED ON THE ORDERS OF THE CIT( A) TO SUBMIT THAT ASSESSEE HAD VARIOUS INVESTMENTS AND HAS EX PLAINED THE SOURCES BY FILING A REVISED RETURN FOR AY. 2005-0 6. THEREFORE, THE ADDITION OF RS. 10,55,100/- AS WELL AS AN AMOUNT O F RS. 4,60,000/- BOTH ARE REQUIRED TO BE CONFIRMED ON THE FA TS OF THE CASE. 6. LD. COUNSEL IN REPLY SUBMITTED THAT ASSESSEE HAS OFFERED HIGHER INCOME IN THE FIRST REVISED INCOME CON SIDERING THAT THERE ARE INVESTMENTS AND ALSO EXCESS STOCK FOUND IN THE FIRMS HAND. HOWEVER, IT WAS STATED THAT EXCESS STOCK IN THE H ANDS OF THE FIRM ARISES IN AY. 2007-08, WHEREAS REVISED RETURNS WERE FILED IN THE INDIVIDUAL HANDS FOR AY. 2005-06. 7. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE EVIDENCE ON RECORD. EVEN THOUGH STATEMENTS WERE RECO RDED FROM ASSESSEE ENQUIRING ABOUT VARIOUS INVESTMENTS, ASSESSEE HAS VOLUNTARILY OFFERED HIGHER INCOME FOR AY. 2005-06 AT RS. 10,55,100/- AND FILING OF REVISED INCOME IS WITHIN THE TIME LIMITS PERMITTED. RS. 10,55,100/- INCLUDES INTEREST INCOME O RIGINALLY OFFERED AT RS. 1,04,000/-. INCOME ON INTEREST WAS OF FERED EVEN PRIOR TO SURVEY PROCEEDINGS. SINCE ASSESSEE IS ALREA DY ON RECORD, THERE COULD BE CAPITAL IN HIS MONEY LENDING ACTIVITY. THAT ARISES IN EARLIER YEAR AND ASSESSEE HAS SOURCES IN EARLIER YE ARS ASWELL. BE THAT AS IT MAY, I DO NOT FIND ANY REASON FOR THE AO TO RE JECT THE REVISED RETURN AND ALSO MAKE THE SAME AMOUNT AS ADDITI ON AND FURTHER MAKING AN ADDITION OF RS. 4,60,000/- AS UNEX PLAINED I.T.A. NOS. 1376/HYD/2013 1377/HYD/2013 1378/HYD/2013 1383/HYD/2013 :- 5 -: INVESTMENT. CONSIDERING THE FACTS OF THE CASE, I AM OF THE OPINION THAT THE ADDITION OF RS. 4,60,000/- NEED NOT BE SEPARATE LY BROUGHT TO TAX WHEN ASSESSEE HAS OFFERED HIGHER INCOME OF RS. 10,55,100/- , WHICH INCLUDES THE ORIGINALLY OFFERED INCOME OF R S. 1,04,000/-. CONSIDERING THE DUPLICATION OF AMOUNTS, I AM OF THE OPINION THAT THE OTHER TWO INCOMES ADDED CAN BE TELESCOPED TO THE DE CLARED INCOME OF RS. 10,55,100/- DECLARED IN FIRST REVISED RETURN. THEREFORE, AO IS DIRECTED TO ACCEPT THE TOTAL INCOME F OR THE IMPUGNED ASSESSMENT YEAR AT RS. 10,55,100/-, AS DECLA RED IN THE REVISED RETURN WHICH SHOULD JUSTIFY THE HIGHER INCOME OFFERED BY ASSESSEE AND ALSO COVER THE INVESTMENTS MADE IN VARIOU S OTHER ASSETS, INCLUDING MONEY LENDING ACTIVITY CONSIDERED B Y AO. ACCORDINGLY, ASSESSEES GROUNDS ARE PARTIALLY ALLOWE D AND AO IS DIRECTED TO ACCEPT THE REVISED RETURN OFFERING THE TOTAL I NCOME AT RS. 10,55,100/-. 8. IN THE RESULT, THIS APPEAL OF ASSESSEE IS PARTLY AL LOWED. ITA NO. 1376/HYD/2013 9. IN THIS APPEAL, ASSESSEE FILED HER ORIGINAL RETUR N OF INCOME DECLARING TOTAL INCOME AT RS. 63,876/- ON 23-09 -2005 MUCH BEFORE THE SURVEY PROCEEDINGS AND DECLARED ADDI TIONAL INCOME AFTER THE SURVEY AT RS. 4,50,000/-. AS IN ABOV E CASE THE OFFERED INCOME WAS ADDED TO THE ORIGINALLY DECLARED I NCOME. AO ALSO DISALLOWED THE SALARY PAID TO WATCHMAN AND INTERES T PAID ON BORROWED FUNDS AT RS. 50,000/- AND ALSO FURTHER BROU GHT TO TAX DEEMED RENTS OF RS. 19,250/-. IN SPITE OF ASSESSEE S OBJECTIONS, LD. CIT(A) CONFIRMED ALL THE ADDITIONS. I.T.A. NOS. 1376/HYD/2013 1377/HYD/2013 1378/HYD/2013 1383/HYD/2013 :- 6 -: 10. AFTER CONSIDERING THE RIVAL CONTENTIONS AS DISCUSS ED EARLIER IN DETAIL IN THE CASE OF SHRI SINGIRIKONDA R AVINDER IN ITA NO. 1377/HYD/2013, I AM OF THE VIEW THAT THE HIGHER INCOME OFFERED AT RS. 4,50,000/- CAN BE ACCEPTED AND NO SEPARATE DISA LLOWANCE CAN BE MADE AS WAS DONE BY THE AO. IN THIS CASE, THE TOTAL INCOME IS TO BE DETERMINED AT RS. 4,50,000/- AS PER THE REVISED RETURN FILED BY ASSESSEE, TELESCOPING OTHER ADDITIONS SEPARATELY M ADE BY THE AO. AO IS DIRECTED ACCORDINGLY. THIS APPEAL OF ASSE SSEE IS PARTLY ALLOWED. ITA NO. 1378/HYD/2013 11. IN THIS CASE, ASSESSEE FILED HER ORIGINAL RETURN OF INCOME ON 30-11-2005 DECLARING TOTAL INCOME OF RS. 1,05,300/ -. IN THE COURSE OF PROCEEDINGS, ON THE BASIS OF SWORN STATEMEN T GIVEN BY HER HUSBAND IN THE COURSE OF SURVEY PROCEEDINGS U/S. 133A, ASSESSEE DECLARED HIGHER INCOME BY FILING REVISED R ETURN ON 22-09- 2006 ADMITTING INCOME OF RS. 6,40,350/-. WHILE MAKI NG THE ABOVE ADDITION, AO ALSO ADDED AN AMOUNT OF RS. 5,75,000/- T OWARDS CAPITAL ON THE INCOMES RECEIVED ON HAND LOANS. 12. CONSIDERING THE RIVAL CONTENTIONS AND FOR THE RE ASONS STATED ABOVE IN DETAIL IN THE CASE OF SHRI SINGIRIKONDA RAVINDER IN ITA NO. 1377/HYD/2013, I AM OF THE VIEW THAT THE HIGHER INCOME OFFERED AT RS. 6,40,350/- CAN BE ACCEPTED AND NO SEPA RATE ADDITION BE MADE AS WAS DONE BY THE AO. IN THIS CASE, THE TOTAL INCOME IS TO BE DETERMINED AT RS. 6,40,350/- AS PER THE REVISED RETURN FILED BY ASSESSEE, TELESCOPING OTHER ADDITION SEPARATELY M ADE BY THE AO. AO IS DIRECTED ACCORDINGLY. THIS APPEAL OF ASSESSEE IS PARTLY ALLOWED. I.T.A. NOS. 1376/HYD/2013 1377/HYD/2013 1378/HYD/2013 1383/HYD/2013 :- 7 -: ITA NO. 1383/HYD/2013 13. IN THIS CASE, ASSESSEE FILED HER ORIGINAL RETURN OF INCOME ON 29-03-2006 DECLARING TOTAL INCOME AT RS. 1,05,200/- . CONSEQUENT TO SURVEY OPERATIONS, ASSESSEE FILED REVISE D RETURN DECLARING TOTAL INCOME AT RS. 3,71,850/-. AO TREATED T HE SAID RETURN OF INCOME AS INVALID. AO IN THE ASSESSMENT HAS ADDED THE ADDITIONAL INCOME DECLARED TO THE TOTAL INCOME ORIGINALL Y OFFERED. IT WAS THE CONTENTION THAT THE INCOME OFFERED IN THE REVISED RETURN INCLUDES THE ORIGINAL INCOME ADMITTED. THEREFORE, A SEPARATE ADDITION NEED NOT BE MADE. 14. CONSIDERING THE RIVAL CONTENTIONS AND KEEPING IN MIND THE FINDINGS GIVEN EARLIER IN DETAIL IN THE CASE OF SH RI SINGIRIKONDA RAVINDER IN ITA NO. 1377/HYD/2013, I AM OF THE VIEW THAT THE HIGHER INCOME OFFERED AT RS. 3,71,850/- CAN BE ACCEP TED AND NO SEPARATE ADDITION CAN BE MADE AS WAS DONE BY THE AO. AO IS DIRECTED TO ACCEPT THE REVISED RETURN OF INCOME OFFERE D AT RS. 3,71,850/-. THIS APPEAL OF ASSESSEE IS PARTLY ALLOWE D. 15. IN THE RESULT, ALL THE APPEALS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH SEPTEMBER, 2016 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 14 TH SEPTEMBER, 2016 TNMM I.T.A. NOS. 1376/HYD/2013 1377/HYD/2013 1378/HYD/2013 1383/HYD/2013 :- 8 -: COPY TO : 1. SINGIRIKONDA RAMULAMMA, SURYAPET. C/O. SRI S. RA MA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, ROA D NO. 9, HIMAYATNAGAR, HYDERABAD. 2. SINGIRIKONDA RAVINDER, SURYAPET. C/O. SRI S. RAM A RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, ROAD NO. 9, HIMAYATNAGAR, HYDERABAD. 3. SINGIRIKONDA KARUNA, SURYAPET. C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, ROAD NO. 9, HIMAYATNAGAR, HYDERABAD. 4. SINGIRIKONDA MANASA, SURYAPET. C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, ROAD NO. 9, HIMAYATNAGAR, HYDERABAD. 5. THE INCOME TAX OFFICER, SURYAPET. 6. COMMISSIONER OF INCOME TAX(APPEALS)-18, MUMBAI. 7. COMMISSIONER OF INCOME TAX(APPEALS)-VI, HYDERABA D. 8. COMMISSIONER OF INCOME TAX-5/6, HYDERABAD. 9. D.R. ITAT, HYDERABAD. 10. GUARD FILE.