Appeal details
Counselvise Citation
[2011] 119 COUNSELVISE.COM (IT) 7125 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-11-2011
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
B
Assessment Year
2002-2003
Appeal Filed On
01-08-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBE R. ITA NO.1404/HYD/2011 : ASSESSMENT YEAR 2002-03 INCOME-TAX OFFICER, WARD 7(2) HYDERABAD V/S SHRI MUNEER KHAN, HYDERABAD (PAN - AHXPK 5607 K ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.J.RAO RESPONDENT BY : SHRI MOHAMMED SIDDIQ ALI DATE OF HEARING 15 11.2011 DATE OF PRONOUNCEMENT 22.11.2011 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-VI, HYDERAB AD DATED 19.5.2011 FOR THE ASSESSMENT YEAR 2002-03. 2. EFFECTIVE GRIEVANCE OF THE REVENUE IN THIS APPEAL R ELATES TO THE ADDITIONS OF RS.10,85,200 ON ACCOUNT OF UNEX PLAINED CREDITS; RS.4,00,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT AN D RS.4,00,000 ON ACCOUNT OF EXCESS OF ASSETS OVER LIABILITY, MADE BY THE ASSESSING OFFICER, BUT DELETED BY THE CIT(A) BY THE IMPUGNED ORDER DATED 19.5.2011. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS EE FIELD RETURN OF INCOME SHOWING TOTAL INCOME OF RS.70,000 FOR THE ASSESSMENT YEAR 2002-03, WHICH HAS BEEN PROCESSED UNDER S.143(1) OF THE ACT ON 13.1.2003. SUBSEQUENTLY, THE ASSESSING OFFICER NOT ICED THAT CREDITS OF RS.10,85,200 APPEARING IN THE ASSESSEES BANK ACCOU NT WERE NOT ITA NO.1404/HYD/2011 SHRI MUNEER KHAN, HYDERABAD 2 DISCLOSED IN THE RETURN OF INCOME. A NOTICE UNDER S.148 WAS ISSUED TO THE ASSESSEE ON 27.3.2006. IN RESPONSE THERETO, AS SESSEE FILED A RETURN ON 26.4.2006 ADMITTING THE RECEIPT OF RS.10, 85,200 AS WELL, OVER AND ABOVE THE INCOME OF RS.70,000 ALREADY DISC LOSED IN THE EARLIER RETURN. 4. THE ASSESSING OFFICER ASSESSED THE TOTAL INC OME OF THE ASSESSEE AT RS.20,55,849. THE ASSESSING OFFICER MA DE AN ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT OF RS.60,649, WHICH T HE APPELLANT HAD CLAIMED AS COMMISSION RECEIVED ON SALE OF GOODS. T HE ASSESSING OFFICER MADE THIS ADDITION AS THE ASSESSEE FAILED T O PRODUCE ANY SUPPORTING EVIDENCE, AND FOR THE VERY SAME REASON, THE CIT(A) TOO CONFIRMED THE ADDITION. 5. THE ASSESSING OFFICER MADE A FURTHER ADDITION OF RS.10,85,200 ON ACCOUNT OF THE FOLLOWING UNEXPLAINE D CREDITS IN THE BANK ACCOUNT OF THE ASSESSEE WITH SBI KARWAN BRANCH , HYDERABAD - 1. 18.8.2001 RS. 6,00,000 2. 18.12.2001 RS. 2,00,000 3. 18.2.2002 RS. 2,85,200 TOTAL RS.10,85,200 6. THE ASSESSEE CLAIMED THAT THESE AMOUNTS HAD BE EN RECEIVED AS HAND LOANS FROM HIS BROTHER, MOHD MAHAB OOB ALI AND HE HAD ALSO FILED A NOTARIZED DECLARATION FROM SHRI M OHD MAHABOOB ALI AS WELL AS COPIES OF THE BANK ACCOUNT, FROM WHICH T HE AMOUNT HAD BEEN ADVANCED TO THE ASSESSING OFFICER. THE ASSESSI NG OFFICER NOTICED THAT THE CONFIRMATION WAS DATED 14.8.2001, WHEREAS THE LOAN AMOUNT ITA NO.1404/HYD/2011 SHRI MUNEER KHAN, HYDERABAD 3 HAD BEEN GIVEN SUBSEQUENTLY. THE ASSESSING OFFICE R THEREFORE, CAME TO THE CONCLUSION THAT THE NOTARISED DECLARATION WA S NOT GENUINE AND ACCORDINGLY ADDED THE SUM OF RS.10,85,200 AS UNEXPL AINED CREDITS. 7. AGGRIEVED, ASSESSEE PREFERRED APPEAL IN THIS I SSUE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE DATE 14.8.2001 MENTIONED IN THE NOTARIZED DECLARATION WAS A TYPING ERROR AND THAT THE DECLARA TION HAD BEEN NOTAIRSED ON 28.2.2005. THE LEARNED AR FURTHER SUBM ITTED THAT THE MATTER HAD TO BE CONSIDERED IN THE LIGHT OF THE IND EPENDENT EVIDENCE IN THE FORM OF BANK STATEMENTS PRODUCED BY HIM. THE C IT(A), THEREUPON HELD AS FOLLOWS- 5.3 I HAVE CONSIDERED THE FACTS STATED IN THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. THE APPELLANT HAD FILED THE BANK STATEMENTS OF THE CRED ITORS AS WELL AS HIS OWN BANK STATEMENT BEFORE THE ASSESSING OFFI CER. THE BANK STATEMENT OF THE CREDITOR CLEARLY MENTIONS THE NAME MUNEER KHAN FOR THE RELEVANT DEBIT ENTRIES. THESE ENTRIES TALLY WITH THE ENTRIES IN THE BANK STATEMENT OF THE APPEL LANT. THE ASSESSING OFFICER HAS NOT DISPUTED THESE FACTS. HE HAD RELIED ONLY ON THE DISCREPANCY IN THE DATE IN THE CONFIRMA TION. THE CLEAR EVIDENCE GIVEN BY THE APPELLANT CANNOT BE IGN ORED MERELY DUE TO THE DATE AFFIXED ON THE CONFIRMATION. THE C ONFIRMATION IS ONLY A SECONDARY EVIDENCE, THE PRIMARY EVIDENCE BEING THE BANK STATEM ENT. THEREFORE, IN VIEW OF THE ENTRIES IN THE BANK STATEMENTS OF THE APPELLANT AND THE CREDITOR, THE A DDITION OF RS.10,85,200 AS UNEXPLAINED CREDIT IS DELETED AND T HE APPEAL IS ALLOWED ON THIS GROUND. 8. AGGRIEVED DEPARTMENT IS IN APPEAL BEFORE US. 9. LEARNED DEPARTMENTAL REPRESENTATIVE HAS GIVEN AMPLE OPPORTUNITY TO THE ASSESSEE AND CONSIDERING THE MAT ERIAL FACTS OF THE CASE HAS MADE ADDITION OF RS.10,85,200. IN THE ASS ESSMENT ORDER, THE ASSESSING OFFICER HAD CLEARLY AND WITHOUT ANY AMBIG UITY HAS DISCUSSED THE FATS. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS NOT ITA NO.1404/HYD/2011 SHRI MUNEER KHAN, HYDERABAD 4 SUBSTANTIATED THE CLAIMS TO THE SATISFACTION OF THE ASSESSING OFFICER THOUGH THE ONUS VETS WITH THE ASSESSEE. MOREOVER, IT IS STATED, WHEN THE TRANSACTION TOOK PLACED ON 15.2.2002, THE ASSES SEE HAS GIVEN LENDORS CONFIRMATION WITH DATE 14.8.2001, WHICH IS NOT POSSIBLE. HENCE, THE ASSESSING OFFICER, ACCORDING TO THE LEAR NED DEPARTMENTAL REPRESENTATIVE, HAS CORRECTLY MADE THE ADDITION, TH OUGH THE CIT(A) IN APPEAL DIFFERED WITH THE VIEW OF THE ASSESSING OFF ICER AND ALLOWED THE APPEAL OF THE ASSESSEE FOR THE REASON THAT THE DATE MENTIONED ON THE CONFIRMATION LETTER WAS TYPOGRAPHICAL ERROR AND IN THE BANKS STATEMENT OF THE CREDITOR AGAINST THE ENTRY, THE NAME WAS CLE ARLY MENTIONED AS MUNEER KHAN AND STATED THAT THE PRIMARY EVIDENCE IS BANKS STATEMENT. BUT THE LEARNED CIT(A) ERRED IN NOT CON SIDERING THE ASSESSING OFFICERS OBSERVATION IN THE ASSESSMENT O RDER THAT THE CREDITS THE BALANCE SHEET FILED EITHER IN THE ORIGINAL RETU RN OR IN THE REVISED RETURN OF INCOME, THOUGH THE ASSESSEE HAS BEEN CO MMUNICATED THE REASONS FOR INITIATING PROCEEDINGS UNDER S.148 OF T HE ACT. FURTHER, THE EVIDENCE FURNISHED BEFORE THE CIT(A) THAT THE BANK STATEMENT OF THE VENDOR WAS NOT FURNISHED BEFORE THE ASSESSING OFFIC ER FOR VERIFICATION. IN VIEW OF THESE FACTS, THE LEARNED DEPARTMENTAL RE PRESENTATIVE SUBMITTED THAT THE CIT(A) HAS INSTEAD OF SENDING BA CK THE FILE TO ASSESSING OFFICER FOR VERIFICATION AND CONSIDERING THE CLAIMS OF THE ASSESSEE, HAS ALLOWED THE APPEAL. 10. WE HEARD THE PARTIES AND PERUSED THE DETAILS A ND THE FACTS OF THE CASE. THE GRIEVANCE OF THE DEPARTMENT IS THA T IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAD CLEARLY STATED THA T THE CREDITS IN THE BANK STATEMENT WERE NOT CONSIDERED THE IN THE BALAN CE SHEET FILED EITHER IN THE ORIGINAL RETURN OR IN THE REVISED RET URN OF INCOME. FURTHER, THE BANK STATEMENT OF THE VENDOR WAS NOT FURNISHED BEFORE THE ITA NO.1404/HYD/2011 SHRI MUNEER KHAN, HYDERABAD 5 ASSESSING OFFICER FOR VERIFICATION, THOUGH THE SAME WAS FURNISHED BEFORE THE CIT(A). IT WAS THEREFORE, MANDATORY ON THE P ART OF THE CIT(A) UNDER RULE 46A TO SEND BACK THE ISSUE TO THE FILE O F THE ASSESSING OFFICER FOR VERIFICATION AND HIS COMMENTS. INSTEA D, THE CIT(A) ALLOWED THE CONTENTIONS OF THE ASSESSEE, WITHOUT FOLLOWING THE PROCEDURE. WE FIND MERIT IN THE ARGUMENT OF THE DEPARTMENT THAT T HE CIT(A) HAS NOT GIVEN OPPORTUNITY TO ASSESSING OFFICER TO VERIFY A ND CONSIDER THE ISSUE IN THE LIGHT OF THE FRESH EVIDENCE FILED BY THE ASS ESSEE BEFORE THE CIT(A). IN THE CIRCUMSTANCES, WE DEEM IT FIT TO RE STORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO RE-EXAMINE THE ISSUE AND GO THROUGH THE EVIDENCE FURNISHED BY THE ASSESSEE IN THE FORM OF BANK STATEMENT, AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AND AFT ER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 11. AS FOR THE NEXT TWO ADDITIONS OF RS.4,00,000 E ACH, CONTESTED IN THIS APPEAL BY THE REVENUE, THE ASSESS ING OFFICER NOTED THAT AS PER THE BALANCE SHEET FILED WITH THE RETURN OF INCOME, A SUM OF RS.4,00,000 HAD BEEN CREDITED TO THE CAPITAL ACCOUN T FROM SALE OF HOSUE PROPERTY. HE FOUND THAT THE SALE HAD ACTUALL Y TAKEN PLACE IN THE PRECEDING YEAR. THAT BEING SO, HE FOUND THAT IF TH E AMOUNT OF RS.4,00,000 WAS TO BE DELETED FROM THE CAPITAL ACCO UNT, THERE WOULD BE EXCESS OF RS.4,00,000 OF ASSETS OVER LIABILITIES AND ACCORDINGLY BROUGHT TO TAX AN AMOUNT OF RS.4,00,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT AND ANOTHER AMOUNT OF RS.4,00,000 ON ACC OUNT OF EXCESS OF ASSETS OVER LIABILITIES. 12. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE TH E CIT(A). IT WAS CONTENDED BEFORE THE CIT(A) THAT THE SALE OF HO USE DID TAKE PLACE IN THE PRECEDING YEAR AND NOT IN THE CURRENT YEAR, BUT THIS WOULD MAKE ITA NO.1404/HYD/2011 SHRI MUNEER KHAN, HYDERABAD 6 NO DIFFERENCE TO THE BALANCE IN THE CAPITAL ACCOUNT , SINCE FOR THE PRECEDING YEAR THERE WOULD BE A CREDIT FOR THIS AMO UNT AND THE OPENING BALANCE OF THE CURRENT YEAR WOULD BE CORRES PONDINGLY INCREASED. HE ALSO FILED COPIES OF THE REVISED R ETURNS FILED FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03 WHICH REFLECT T HESE CHANGES AND SUBMITTED THAT THE SUM OF RS.4,00,000 USED FOR HOUSE CONSTRUCTION HAD BEEN DULY REFLECTED IN THE BALANCE SHEET AND THE SOURCE OF THIS EXPENDITURE WAS THE CASH BALANCE REF LECTED IN THE CAPITAL ACCOUNT. THE CIT(A) ACCEPTING THESE CONTENTIONS O F THE ASSESSEE, DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON THIS ISSUE. 13. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT THE ASSESSEE, DURING THE ASSESSMENT PROCEEDINGS FAI LED TO FURNISH ANY EXPLANATION, WHEN ASKED TO FURNISH THE SOURCES FOR INCURRING THE EXPENDITURE TOWARDS CONSTRUCTION OF HOUSE. HENCE, THE ASSESSING OFFICER HAS VERIFIED THE AVAILABLE ASH BALANCE WITH THE ASSESSEE AND WITHDRAWALS FROM THE BANK ACCOUNT OF THE ASSESSEE A ND ADDED THE AMOUNT OF RS.4 LAKHS AS UNEXPLAINED INVESTMENT. IN THE CIRCUMSTANCES, THE ASSESSING OFFICER, THE LEARNED D EPARTMENTAL REPRESENTATIVE SUBMITTED, HAS CORRECTLY MADE THE AD DITION, AND THE CIT(A), WITHOUT PROPER EXPLANATION FROM THE ASSESSE E, WAS NOT JUSTIFIED IN DELETING THE SAME. 14. WE HEARD THE PARTIES. WE FIND THAT THERE IS NO DISPUTE WITH REGARD TO THE SALE OF PROPERTY. THAT BEING S O, AS OBSERVED BY THE CIT(A) WHETHER THE SALE OF THE HOUSE PROPERTY TOOK PLACE IN THE PRECEDING YEAR OR IN THE CURRENT YEAR, IT WOULD MAK E NO DIFFERENCE TO THE AVAILABILITY OF CASH WITH THE ASSESSEE AND THE ONLY FAULT THAT COULD BE FOUND WITH THE ASSESSEE IS WITH REGARD TO THE AC COUNTING OF THAT ITA NO.1404/HYD/2011 SHRI MUNEER KHAN, HYDERABAD 7 AMOUNT. EVEN THIS DEFECT HAS BEEN RECTIFIED BY THE ASSESSEE BY MEANS OF FILING REVISED RETURNS OF INCOME, INCORPORATING REVISED CAPITAL ACCOUNTS. BASED ON SUCH ERRORS, AN ADDITION FOR UN EXPLAINED CREDITS, PARTICULARLY WHEN THE SOURCE FOR THE CREDIT HAS NOT BEEN QUESTIONED CANNOT BE MADE. CONSEQUENTLY, WE FIND NO INFIRMITY IN THE ACTION OF THE CIT(A) IN DELETING THE ADDITIONS OF RS.4,00,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE CONSTRUCTION AND RS .4,00,000 ON ACCOUNT OF EXCESS OF ASSETS OVER LIABILITY MADE BY THE ASSESSING OFFICER. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON TH IS ASPECT AND REJECT THE GROUNDS OF THE REVENUE. 15. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 22.11.2011 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 22ND NOVEMBER, 2011 COPY FORWARDED TO: 1. SHRI MUNEER KHAN, H.NO.13-5-617, SABJIMANDI, HYDERA BAD 2. INCOME - TAX OFFICER , 7(2), HYDERABAD 2 . COMMISSIONER OF INCOME - TAX(A) - V I HYDERABAD 4. COMMISSIONER OF INCOME - TAX V , HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S.
