Sri Netyam Ravi Kumar , Bangalore V. The Income Tax Officer Ward-7(3), Bangalore

ITA 1382/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7232 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 15-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKAS SURYAWANSHI ADDITIONAL
• Keywords: Reason to believe
• Section: 143(3); 142(1); 234B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.1382/BANG/2017 ASSESSMENT YEAR : 2005-06 SRI. NETYAM RAVI KUMAR, NO.F-146, 8 TH CROSS, MANYATA RESIDENCY, NAGAWARA, BENGALURU-560045. PAN : AHHPR 5683 E VS. INCOME TAX OFFICER, WARD 7(3), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. NARENDRA SHARMA, ADVOCATE REVENUE BY : SHRI. VIKAS SURYAWANSHI, ADDITIONAL CIT DATE OF HEARING : 13.11.2017 DATE OF PRONOUNCEMENT : 17.11.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A), INTERALIA , ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, FACTS, EQU ITY AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S 147 OF THE ACT IS BAD IN LAW AND VOID-AB-INITIO AS THE MANDATORY CONDITIONS TO INVOKE THE PROVISION OF SECTION 147 OF THE ACT DID NOT EXIST OR HAVE NOT BE EN COMPLIED WITH AND THEREBY ISSUING THE NOTICE UNDER SECTION 148 OF THE ACT IS BAD IN LAW AND CONSEQUENTLY THE ASSESSMENT ORDER PASSED IS VOID-AB-INITIO AND R EQUIRES TO BE CANCELLED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPRECIATE THAT IF AT ALL ANY REASONS RECORDED FOR RE-OPE NING OF ASSESSMENT CAN UTMOST BE A REASON TO SUSPEC T AND NOT REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND CONSEQUENTLY THE REASSESSMENT ORDER IS BAD IN LAW ON THE FACTS AND C IRCUMSTANCES OF THE CASE. ITA NO. 1382/BANG/2017 PAGE 2 OF 4 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S 147 OF THE ACT IS BAD IN LAW WHEN THE REASON AS REFERRED IN THE ASSESSMENT O RDER, ON THE BASIS OF WHICH THE REOPENING MADE ITSELF IS DROPPED LEARNED ASSES SING OFFICER CANNOT PROCEED TO MAKE SOME OTHER ADDITION ON THE FACTS AN D CIRCUMSTANCES OF THE CASE. 5. THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LAW IN NOT PROVIDING THE COPY OF THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, COPY OF THE REASONS RECORDED AND COPY OF THE APPROVAL OBTAINED FOR ISSUE OF NOTICE U NDER SECTION 148 OF THE ACT FOR EFFECTIVE REPRESENTATION OF THE CASE ON THE FAC TS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED IN LAW IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.1,30,00 0/- BEING THE AGRICULTURAL INCOME ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER OF INTEREST AS PER PARITY OF THE REASONING OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692 THE APPELLANT DENIES ITSELF LIABL E TO BE CHARGED INTEREST UNDER SECTION 234A AND 234B OF THE ACT UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE. FURTHER THE LEVY OF INTEREST UNDER SECTIO N 234A AND 234B OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND ME THOD OF CALCULATION ADOPTED ON WHICH INTEREST IS LEVIED ARE NOT DISCERNABLE AND ARE WRONG ON THE FACTS OF THE CASE. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY OR AMEND AND DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 9. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL MAY BY ALLOWED AND RELIEF MAY BE GRANTED AS PRAYED FOR THE ADVANCEMENT OF SUBSTAN TIAL CAUSE OF JUSTICE. 2. GROUND NO. 1 IS GENERAL IN NATURE AND GROUND N OS. 2 TO 5 RELATE TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT. THE ASSESSEE HAS CONT ENDED THAT ON RECEIPT OF THE INFORMATION FROM THE INVESTIGATION WING THAT THE AS SESSEE IS A PARTNER IN THE M/S. SITARA PROJECTS AND HAS INTRODUCED A CAPITAL OF RS.12,00,0 00/- IN THE SAID FIRM DURING THE FINANCIAL YEAR I.E., 2004-05, THE ASSESSMENT WAS REOPENED. C ONSEQUENTLY NOTICE UNDER SECTION 142(1) WAS ISSUED. SINCE THERE WAS NO EVIDENCE BEF ORE THE AO TO FORM A VIEW THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, THE REOPE NING IS BAD IN LAW. LEARNED DR ON THE OTHER HAND HAS CONTENDED THAT THE AO HAS GOT THE INFORMATION FROM THE INVESTIGATION WING THAT THE ASSESSEE HAS I NTRODUCED RS.12,00,000/- IN THE FIRM M/S. SITARA PROJECTS WHICH WERE NOT DISCLOSED IN TH E REGULAR BOOKS OF ACCOUNTS. THEREFORE, THE AO HAS FORMED A BELIEF THAT INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT. THUS THERE IS NO INFIRMITY OR ILLEGALITY IN THE REOPENIN G OF THE ASSESSMENT. ITA NO. 1382/BANG/2017 PAGE 3 OF 4 3. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS WE FIND THAT UNDISPUTEDLY AO RECEIVED T HE INFORMATION FROM THE INVESTIGATION WING THAT IT HAS MADE AN INVESTMENT OF RS.12,00,000 /- AS CAPITAL IN M/S. SITARA PROJECTS AND THE SAID INVESTMENT WAS NOT DISCLOSED BY THE AS SESSEE. THEREFORE, THE AO HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPE D ASSESSMENT AND I FIND NO INFIRMITY IN THE REOPENING OF THE ASSESSMENT. ACCORDINGLY, ACTI ON OF THE AO FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT IS CONFIRME D. THUS THE ORDER OF CIT(A) ON THE ISSUE IS CONFIRMED. 4. THE OTHER GROUNDS I.E., GROUND NOS. 5 TO 6 RELAT ES TO THE MERIT AND IN THAT REGARD IT WAS CONTENDED BY THE ASSESSEE THAT THIS CAPITAL WAS INTRODUCED OUT OF THE PAST SAVINGS OF THE ASSESSEE. SINCE THE ASSESSEE WAS AN AGRICULTUR IST, HE EARNED THE AGRICULTURAL INCOME WHICH WAS DEPOSITED AS SHARE CAPITAL IN THE FIRM M/ S. SITARA PROJECTS. BEFORE THE AO, THOUGH THE ASSESSEE HAS CONTENDED THAT OUT OF THE A GRICULTURAL INCOME IT HAS INTRODUCED A SHARE CAPITAL BUT THE EXPLANATION GIVEN BY THE ASSE SSEE WAS NOT APPRECIATED BY THE AO AND HE MADE THE ADDITION OF RS.9,30,000/-. 5. ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) A ND REITERATED ITS CONTENTIONS AND THE CIT(A), BEING PARTLY CONVINCED, HAS GIVEN A CRE DIT OF 8 LAKHS. 6. AGGRIEVED, ASSESSEE IS BEFORE THE TRIBUNAL AND R EITERATED ITS CONTENTIONS. DURING THE COURSE OF HEARING, THOUGH IT WAS CONTENDED THAT ASSESSEE HAS SUFFICIENT AGRICULTURAL LAND HOLDING BUT NO EVIDENCE IN THIS REGARD WAS FIL ED IN THE TRIBUNAL. DURING THE COURSE OF HEARING, ASSESSEE WAS ASKED TO PRODUCE THE RELEVANT EVIDENCE I.E., COPY OF THE REVENUE RECORD TO ESTABLISH THAT IT OWNS SUCH A LARGE CHUNK OF AGRICULTURAL LAND. IN RESPONSE THERETO, IT WAS CONTENDED THAT ASSESSEE AND HIS FAMILY MEMBE RS OWNED AGRICULTURAL LAND OF 50 ACRES. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHE R CONTENDED THAT ASSESSEE HAS SUFFICIENT EVIDENCE ABOUT THE AGRICULTURAL LAND HOL DING, THUS NO ADDITION IS CALLED FOR. THE LEARNED DR PLACED RELIANCE UPON THE ORDER OF TH E LOWER AUTHORITIES. 7. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT ASSESSEE HAS TAKEN A PLEA BEFORE THE CIT(A) THAT OUT OF THE AGRICULTURAL INCOME, HE MADE THE INVESTMENT IN THE SHARE CAPITAL OF RS.12,00,000/- OUT OF ITA NO. 1382/BANG/2017 PAGE 4 OF 4 WHICH RS. 2,70,000/- WAS ACCEPTED BY THE AO AND HE MADE THE ADDITION OF RS.9,30,000/- WHICH WAS AGAIN RE-EXAMINED AND CIT(A) HAS ALSO ACC EPTED THE INVESTMENT IN SHARE CAPITAL AT RS.8,00,000/- AND REDUCED THE ADDITION TO RS.1,3 0,000/- DURING THE COURSE OF HEARING, THE ASSESSEE WAS ASKED TO FURNISH THE COPIES OF REV ENUE RECORD TO ESTABLISH AS TO HOW MUCH AGRICULTURAL HOLDING IS OWNED BY THE ASSESSEE. IN RESPONSE THERETO, IT WAS CONTENDED THAT ASSESSEE AND HIS FAMILY OWNS 50 ACRES OF LAND. BUT NO EVIDENCE WAS FILED IN SUPPORT OF THE CONTENTION. IN ANY CASE, IF I ACCEPT THAT T HE FAMILY OF THE ASSESSEE OWNS 50 ACRES OF AGRICULTURAL LAND, THE ENTIRE AGRICULTURAL INCOME C ANNOT BE CREDITED TO THE ACCOUNT OF THE ASSESSEE TO JUSTIFY THE INVESTMENT IN SHARE CAPITAL . THE CIT(A) HAS ALREADY GRANTED RELIEF OF SUBSTANTIAL AMOUNT OF RS.8,00,000/- WITHOUT HAVING EXAMINED THE EVIDENCE OF AGRICULTURAL HOLDING. I FIND NO JUSTIFICATION TO GRANT FURTHER RELIEF. SINCE THE REVENUE HAS NOT CHALLENGED THE FINDING OF THE CIT(A), IT ATTAINS THE FINALITY WITH REGARD TO RELIEF GRANTED BY THE CIT(A). HOWEVER, I HAVE EXAMINED THE CLAIM OF THE ASSESSEE BUT DO NOT FIND ANY MERIT THEREIN. HENCE I CONFIRM THE ORDER OF CIT(A) AND DISMISS THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE STAND DISM ISSED. PRONOUNCED IN THE OPEN COURT ON NOVEMBER, 201 7. SD/- (SUNIL KUMAR YADAV) JUDICIAL MEMBER PLACE : BANGALORE DATED : 17/11/2017 /NSHYLU/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.