Sri D Krishna Reddy, Hyderabad V. ITO., Ward-13(2), Hyderabad

ITA 1394/HYD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2640 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 12-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained investment; Gift; Salary income; Additional evidence
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1394/HYD/2014 ASSESSMENT YEAR: 2006-07 D. KRISHNA REDDY, HYDERABAD. PAN ANFPD 3715 R VS. INCOME-TAX OFFICER, WARD 13(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SHRI K.J. RAO DATE OF HEARING : 23-03-2017 DATE OF PRONOUNCEMENT : 07-04-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS IS AN APPEAL OF THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - II, HYD ERABAD, DATED 26/05/ 2014 FOR AY 2006-07. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS A SALARIED EMPLOYEE IN HYDERABAD METROPOLITAN WORKS. THE ANTI CORRUPTION BUREAU OF ANDHRA PRADESH (ACB) HAD PASSED ON CERTAI N INFORMATION PERTAINING TO ASSESSEE TO THE INCOME-TAX DEPARTMENT REGARDING PURCHASE OF PROPERTY OF 300 SQUARE YARDS AT AYYAPPA HOUSING SOCIETY, MADHAPUR, HYDERABAD. THE ASSESSEE HAD SALA RY INCOME OF RS.1.78 LAKHS. HE HAD NOT FILED HIS RETURN OF INCOM E FOR AY 2006-07. ACCORDINGLY, NOTICE U/S 148 WAS ISSUED AND ASSESSM ENT U/S 143(3) R.W.S. 147 WAS COMPLETED ON 28/03/2013 MAKING AN AD DITION OF RS. 30,64,000/- TOWARDS UNEXPLAINED INVESTMENT IN PURCH ASE OF PROPERTY. 2 ITA NO. 1394/H/14 SHRI D. KRISHNA REDDY 2.1 THE REASONS GIVEN BY THE ASSESSING OFFICER FOR MAKING ADDITION OF RS.30.64 S TOWARDS UNEXPLAINED INVESTMENT ARE AS UNDER: (A) THAT THE ASSESSEE PURCHASED 300 SQUARE YARDS O F PLOT AT AYYAPPA HOUSING SOCIETY, MADHAPUR, IN THE NAME OF H IS DAUGHTER, KUMARI VENKATA LAKSHMI ON 20.11.2005 FOR RS.30.64 LACS. HOWEVER, HIS SALARY INCOME AS PER FORM NO.16 WAS ONLY RS.1.78 LACS. BEFORE THE ACB THE ASSESSEE DEPOSED T HAT HIS FATHER LATE SRI GOVINDA REDDY, HAD GIFTED RS.28,00, 000/- (B) THE ASSESSEE WAS ASKED TO FURNISH SOURCES FOR I NVESTMENT. IT WAS STATED THAT THE ASSESSEE'S FATHER SRI GOVINDA R EDDY OWNED AGRICULTURAL LANDS, HE HAD INCOME FROM AGRICULTURE, INCOME FROM SALE OF LANDS AND HE HAD TAKEN LOAN FROM OTHERS, HA D TAKEN LAND ON LEASE, OUT OF THESE SOURCES, THE AMOUNT WAS GIFT ED TO ASSESSEE'S DAUGHTER FOR PURCHASING THE PROPERTY. (C) THE ASSESSEE WAS ASKED TO FURNISH COPIES OF SAL E DEEDS OF AGRICULTURAL LANDS, BANK STATEMENTS OF HIS FATHER, PATTEDAR PASSBOOKS, DETAILS OF AGRICULTURAL PRODUCE ETC. THE ASSESSEE PRODUCED COPIES OF LAND LEASE DEEDS, COPIES OF AGRI CULTURAL PRODUCE SOLD, PROOF OF PURCHASE OF SEEDS. IT WAS FU RTHER STATED THAT HIS FATHER, DID NOT HAVE ANY SALE DEED, BUT TH E LANDS WERE TRANSFERRED TO PURCHASERS ON JANABANDU' BASIS IN TH E NAME OF PURCHASERS WITHOUT REGISTERED DOCUMENTS. D) THE ASSESSEES FATHER WAS NOT AN INCOME-TAX ASSE SSEE. THE SO CALLED ACCUMULATED SAVINGS FOR THE LAST 6 YEARS BY SRI D. GOVINDA REDDY ARE NOT VERIFIABLE. NO AGRICULTURAL I NCOME WAS OFFERED BY THE ASSESSEE IN HIS RETURN OF INCOME. E) AS THE SOURCES FOR INVESTMENT ARE NOT SUBSTANTIA TED WITH EVIDENCE, THE ENTIRE INVESTMENT IS TREATED AS UNEXP LAINED INVESTMENT. 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED AS UNDER: THE ALLEGED UNEXPLAINED INVESTMENT FOR THE PURCHAS E OF 300 SQUARE YARDS OF LAND IN THE NAME OF ASSESSEE'S MINO R DAUGHTER IS FACTUALLY INCORRECT FOR THE FOLLOWING REASONS : (A) THE SAID PROPERTY IS NOT REGISTERED TILL DATE D UE TO DISPUTE IN LAND TITLE. 3 ITA NO. 1394/H/14 SHRI D. KRISHNA REDDY (B) THE AGREEMENT OF SALE AND CONSIDERATION FOR THE SAME WAS DIRECTLY PAID BY THE ASSESSEE'S FATHER IN HIS CAPAC ITY AS GRANDFATHER OF ASSESSEE'S DAUGHTER AND THE AGREEMEN T OF SALE JUSTIFIES BOTH THESE FACTS WITH THE NON INCLUSION O F ASSESSEE'S NAME THEREIN. (C) THE ASSESSEE HAS TAKEN A CONSISTENT STAND THAT THE SAID AMOUNTS WERE GIFTED BY HIS FATHER DIRECTLY TO HIS M INOR DAUGHTER AND HE HAS NO ROLE IN THE SAID TRANSACTION. (D) THE STAND TAKEN BY THE ACB REGARDING ALLEGED IN VESTMENT OF RS.20 LAKHS BY THE ASSESSEE IS ALSO WITHOUT ANY PRO OF. (E) SINCE THE ASSESSEE'S FATHER HAS EXPIRED ON 22.0 5.2010, THE ASSESSEE IS NOT IN A POSITION TO OBTAIN ANY DOCUMEN T FOR THE SOURCE. (F) THAT LATE SRI D.GOVINDA REDDY SOLD 10 ACRES OF AGRICULTURAL LAND AT KOTHULARAM VILLAGE, MUNUGODU MANDAL, NALGON DA DISTRICT IN THE MONTH OF AUGUST, 2005. NO FORMAL SALE DEED W AS EXECUTED. NECESSARY ENTRIES WERE MADE IN LOCAL REVENUE RECORD S. COPIES OF CONFIRMATION LETTERS FROM THE VENDEES ALONGWITH THE VRO CERTIFICATE AND TAHSILDAR RECORD IS ENCLOSED. (G) THAT LATE SRI D. GOVINDA REDDY HAD 10 ACRES OF LAND, HE TOOK ANOTHER 31 ACRES OF LAND ON LEASE AND HE HAD ANNUA L INCOME OF RS.1,00,000/- FROM AGRICULTURAL OPERATIONS . (H) THERE WERE ACCUMULATED SAVINGS OF RS.9.64 LACS WITH LATE SRI D. GOVINDA REDDY AS ON 31.03.2005. OUT OF WHICH RS. 8 LACS WAS GIVEN AS ADVANCE FOR PURCHASE OF PROPERTY IN HIS SO N'S DAUGHTER'S NAME. (I) INCOME AND EXPENSE STATEMENTS OF AGRICULTURAL I NCOME FOR THE PERIOD 1996-2005 ARE ENCLOSED TO SUBSTANTIATE SAVIN GS OF LATE SRI D. GOVINDA REDDY. RELEVANT COPIES OF AGRICULTURAL I NCOME, ALONGWITH THE RECEIPTS GIVEN BY AGRICULTURAL MARKET ING COMMITTEE GUNTUR AND CHANDURU ARE SUBMITTED. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THE EXPLANATION GIVEN BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND DURING APPELLATE PROCEED INGS WERE DIFFERENT. THERE IS NO CONSISTENCY. NONE OF THE CLA IMS MADE BY THE ASSESSEE ARE VERIFIABLE AND NOT SUPPORTED BY ANY BA NK STATEMENT, AS ALL THE TRANSACTIONS WERE SAID TO HAVE TAKEN PLACE IN CASH. IN VIEW OF 4 ITA NO. 1394/H/14 SHRI D. KRISHNA REDDY THE ABOVE OBSERVATIONS, THE CIT(A) HELD THAT N THE ABSENCE OF ANY RELIABLE EVIDENCE, THE ADDITION MADE BY THE AO TOWA RDS UNEXPLAINED INVESTMENT OF RS. 30,64,000/- IS UPHELD. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), HYDERABAD , DISMISSING THE APPEAL OF THE APPELLANT IS PERVERSE, ILLEGAL AND UNSUSTAINABLE IN LAW. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N SUSTAINING THE ADDITION OF RS.30.64 LAKHS MADE BY T HE ASSESSING OFFICER. THE COMMISSIONER (APPEALS) FAILED TO APPRE CIATE THAT THE APPELLANT HAD DULY FILED ALL THE INFORMATION TO PRO VE THE SOURCE FOR INVESTMENT AND THAT THE ADDITION MADE BY THE AO IS WITHOUT MAKING PROPER ENQUIRY AND PURELY BASED ON SURMISES AND ASSUMPTIONS. 6. BEFORE US, ASSESSEE HAD FILED THE FOLLOWING ADDI TIONAL EVIDENCES IN THE PAPER BOOK AND SEEKING ADMISSION OF THE SAM E: 1. ORDER DATED 17/01/2012 PASSED BY THE COURT OF PR L. SPL. JUDGE FOR SPE AND ACB CASES, CITY CIVIL COURT, HYD. PAGES 7 & 8. 2. DEED OF SALE ENTERED IN OCTOBER 2005 IN RESPECT OF PLOT PURCHASED BY APPELLANTS FATHER IN FAVOUR OF APPELL ANTS DAUGHTER. PAGES 9 TO 14 3. RECEIPTS ISSUED TO APPELLANTS FATHER. PAGES 15 TO 18 7. LD. AR SUBMITTED THAT THESE ADDITIONAL EVIDENCES ARE VITAL IN DECIDING THE ISSUE AND COULD NOT SUBMIT THE SAME BE FORE LOWER AUTHORITIES. THESE ADDITIONAL EVIDENCES WILL THROW LIGHT ON THE SUBMISSIONS OF THE ASSESSEE. HE PRAYED THAT THE ADD ITIONAL EVIDENCES MAY BE ADMITTED AND THE ISSUE MAY BE REMITTED BACK TO THE FILE OF THE AO. 8. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES AND SUBMITTED THAT THE DATES OF AGREEME NTS SUBMITTED NOW 5 ITA NO. 1394/H/14 SHRI D. KRISHNA REDDY HAVING DISCREPANCIES. HOWEVER, HE ADMITTED THAT THI S ISSUE MAY BE REMITTED BACK TO THE FILE OF THE AO FOR FRESH CONSI DERATION. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THE ASSESSEE WAS CLAIMING ALL ALONG THAT THE PROPERTY WAS PURCHASED IN THE NAME OF HIS DAUGHTER OUT OF THE SO URCE, WHICH HIS FATHER HAD SOLD AGRICULTURAL PROPERTY. ASSESSEES F ATHER GIFTED THE MONEY TO HIS DAUGHTER. THE ASSESSEE COULD NOT SUBST ANTIATE THE CLAIM BEFORE THE LOWER AUTHORITIES DUE THE FACT THAT HE D OES NOT HAVE RELEVANT DOCUMENTS TO SUBSTANTIATE THE SALE TRANSAC TION MADE BY HIS FATHER. SIMILARLY, THE PROOF OF PURCHASE OF THE P ROPERTY IN THE NAME OF HIS DAUGHTER. NOW, THE ASSESSEE HAS FILED ALL TH E ABOVE DOCUMENTS AS ADDITIONAL EVIDENCE. AS THE ADDITIONAL EVIDENCES ARE FILED FOR THE FIRST TIME BEFORE US AND THE AO HAD NO OCCASION TO CONSIDER THE SAME, WE DEEM IT FIT TO REMIT THE MATTER TO THE FILE OF T HE AO TO CONSIDER THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE U S AND DECIDE THE ISSUE AFRESH. THE ASSESSEE MAY BE GIVEN AN OPPORTUN ITY OF BEING HEARD. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 7 TH APRIL, 2017. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN ) VICE PRESIDENT A CCOUNTANT MEMBER HYDERABAD, DATED:7 TH APRIL, 2017. KV 6 ITA NO. 1394/H/14 SHRI D. KRISHNA REDDY COPY TO:- 1) SHRI D. KRISHNA REDDY, C/O SHRI AV RAGHURAM, P. VINOD, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HY DERABAD - 1. 2) ITO, WARD 13(2), AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 34. 3) CIT(A) - II, HYDERABAD 4 CIT - 1, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE