ACIT, Circle-15(1), Hyd, Hyderabad V. A. Bhaskar Rao, Hyd, Hyderabad

ITA 1414/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6455 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 08-06-2016
• Assessment Year: misc
• Appeal Filed On: 15-12-2015
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• Keywords: Unexplained investment; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI J. SUDHAKARA REDDY, ACCOUNTANT MEMBER I.T.A. NO. 1414/HYD/2015 ASSESSMENT YEAR: 2010-11 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-15(1), HYDERABAD VS SRI A. BHASKAR RAO, HYDERABAD [PAN: ADEPA5106E] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI M. SITARAM, DR FOR ASSESSEE : SHRI P. RAVISESHAGIRI RAO, AR DATE OF HEARING : 15-06-2016 DATE OF PRONOUNCEMENT : 17-06-2016 O R D E R THIS IS AN APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7, HYDERABAD DATED 1 ST SEPTEMBER, 2015 FOR THE AY. 2010-11 ON THE FOLLOWING GROUNDS: 1. THE HONBLE CIT(A) ERRED IN DELETING THE ADDITI ON OF RS. 33,75,550 MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT. 2. THE HONBLE CIT(A) ERRED IN HOLDING THAT THE ASS ESSEE SATISFACTORILY EXPLAINED THE SOURCES FOR THE UNEXPLAINED INVESTMEN T. 3. THE HONBLE CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT SHOWN ANY DRAWINGS FROM CAPITAL ACCOUNT. 4. THE HONBLE CIT(A) FAILED TO NOTICE THAT THE ASS ESSEE HAD DECLARED INCOME OF RS. 4,81,176/- FOR AY. 2007-08, RS. 10,63 ,676/- FOR AY. 2008-09 AND RS. 6,90,389/- FOR AY. 2009-10. THE IN COME DECLARED DO NOT SUPPORT THE CLAIM OF THE ASSESSEE THAT THE INVE STMENT WAS MADE OUT OF ACCUMULATED PROFITS. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING I.T.A. NO. 1414/HYD/2015 SRI A. BHASKAR RAO :- 2 -: 2. THE FACTS OF THE CASE ARE THAT DURING THE PERIOD RELE VANT TO THE ASSESSMENT YEAR, THE ASSESSEE HAS INVESTED AN AMOU NT OF RS.33,75,550/IN ACQUIRING PROPERTY AT D.NO. 1-1-651/ 1, GANDHI NAGAR, HYDERABAD. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES FOR THE SAME. THE ASSESSEE EXPLAINED THAT THE SOURCES A ND SUBMITTED THAT THE SAME ARE REFLECTED IN THE BOOKS OF ACC OUNT. THE ASSESSEE HAS ALSO SUBMITTED THAT, THEY PREPARED THE B ALANCE SHEET SHOWING BOTH BUSINESS ASSETS AND PERSONAL ASSETS . THE ASSESSEE PREPARED AND FILED CASH-FLOW STATEMENT. THE ASSESSING OFFICER OBSERVED THAT THE CASH BOOK WAS NOT PRODUCED A ND THAT PAYMENT IS MADE IN CASH AND THAT THERE WERE NO DRAWINGS IN CAPITAL ACCOUNT, MADE THE ADDITION. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AS SESSEE SUBMITTED A COPY OF AUDITED ACCOUNTS INCLUDING, THE PROF IT AND LOSS ACCOUNT AND BALANCE SHEET. THE PROPERTY PURCHASE D BY THE ASSESSEE IS REFLECTED IN THE BALANCE SHEET, IN FIXED ASSETS, AS BUILDING AND NO DEPRECIATION WAS CLAIMED ON THE SAME. THE AR SUBMITTED THAT WITHOUT REJECTING THE BOOKS OF ACCOUNT, THE ASSETS REFLECTED THEREIN CANNOT BE TAKEN AS UNEXPLAINED. 3.1. THE ASSESSMENT ORDER AND EXPLANATION FURNISHED BY THE ASSESSEE ARE CONSIDERED. THE RESULTS AS REFLECTED IN THE AUDITED ACCOUNTS PRODUCED HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. THE BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED. THE AP PELLANT ALSO FILED CASH-FLOW STATEMENT. DISREGARDING THE ABOVE EVI DENCES, ONLY ON THE GROUND THAT CASH BOOK WAS NOT PRODUCED AND DRAW INGS ARE NOT MADE IN CAPITAL ACCOUNT, THE INVESTMENT CANNOT BE TR EATED AS UNEXPLAINED. THE INVESTMENT IS SHOWN AS FIXED ASSET IN BALANCE SHEET. U/S. 69, ONLY SUCH EXPENDITURE WHICH IS NOT RE CORDED IN I.T.A. NO. 1414/HYD/2015 SRI A. BHASKAR RAO :- 3 -: THE BOOKS OF ACCOUNT CAN BE ADDED. IN VIEW OF THE AB OVE, THE ADDITION OF RS. 33,75,550/- MADE ON ACCOUNT OF UNEXPL AINED INVESTMENT IS DELETED. 4. THE LD. DR COULD NOT CONTROVERT THESE FACTUAL FINDIN GS OF THE FIRST APPELLATE AUTHORITY. WHEN THE PROPERTY HAS BEEN PURCHASED AND REFLECTED IN THE BOOKS OF ACCOUNT, THE QUESTION OF MAKING AN ADDITION ON THE GROUND THAT, THIS IS UNEXPLAINED INVE STMENT U/S. 69, DOES NOT ARISE. 5. THE LD. DR REQUESTED THE BENCH TO SET ASIDE THE MATTE R TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. I FIND NO MERIT IN SUCH SUBMISSIONS. 6. IN THE RESULT, ORDER OF THE FIRST APPELLATE AUTHORITY IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2016 SD/- (J. SUDHAKARA REDDY) ACCOUNTANT MEM BER HYDERABAD, DATED 17 TH JUNE, 2016 TNMM I.T.A. NO. 1414/HYD/2015 SRI A. BHASKAR RAO :- 4 -: COPY TO : 1. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-15(1), HYDERABAD. 2. SRI A. BHASKAR RAO, PLOT NO. 181, ECIL BHAVANI NA GAR, PRAGATHI INDUSTRIAL AREA, HYDERABAD. 3. CIT(APPEALS)-7, HYDERABAD. 4. THE PR. CIT-7, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.