G.V. Kumar, Hyd, Hyderabad V. ITO, Ward-12(1), Hyd, Hyderabad

ITA 1417/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6328 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 16-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Keywords: Salary income; Additional evidence
• Section: 143(3)

Judgement Text

ITA NO.1417 OF 2015 GV KUMAR HYDERABAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P.MADHAVI DEVI, JUDICIAL MEMBER & SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1417/HYD/2015 (ASSESSMENT YEAR: 2007-08) SHRI G.V. KUMAR PLOT NO.37, ROAD NO.12 BANJARA HILLS, HYDERABAD PAN: AEDPG 6509 B VS. INCOME TAX OFFICER WARD 12 ( 1 ) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A. SRINIVAS FOR REVENUE : SMT. U . MINICHANDRAN, DR DATE OF HEARING : 01.07.2016 DATE OF PRONO UNCEMENT : 29 .07.2016 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2008-09. AT T HE OUTSET IT IS NOTICED THAT THE APPEAL IS FILED WITH A DELAY 18 DAYS. ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION O F DELAY STATING THAT ON THE LAST DAY OF FILING OF APPEAL, THE ASSES SEE HAD PAID THE APPEAL OF RS.4000/- BASED ON THE ADDITIONS MADE AND THE APPEAL WAS SENT TO THE REGISTRY OF ITAT FOR FILING, BUT TH E REGISTRY DID NOT ACCEPT THE APPEAL PAPERS AS THEY FELT THAT THE FEES SHOULD BE RS.10,000 AND NOT RS.4000. IT WAS SUBMITTED THAT TH E DEFICIT FEE WAS PAID ON THE NEXT DAY AND THE PAPERS WERE AGAIN SENT FOR FILING. THE REGISTRY DID NOT TAKE THE PAPERS AS THE RE WAS A DELAY OF 2 DAYS AND THEY ASKED FOR THE CONDONATION PETITION WAS TO BE FILED ALONG WITH THE APPEAL PAPERS AND THAT IN THE MEANTIME, THE ITA NO.1417 OF 2015 GV KUMAR HYDERABAD PAGE 2 OF 6 ASSESSEE HAD LEFT HYDERABAD ON HIS PERSONAL WORK AN D WAS NOT AVAILABLE FOR SIGNING THE CONDONATION PETITION AND THE LEARNED COUNSEL FOR THE ASSESSEE HAD MADE A MENTION OF THE DIFFICULTY IN FILING THE APPEAL PAPERS AND CONDONATION PAPERS TOG ETHER BEFORE THE ITAT. UNDER THE INSTRUCTIONS OF THE ITAT, APPEA L WAS FILED AND SUBSEQUENTLY THE CONDONATION PETITION IS FILED. ON PERUSAL OF THE COPIES OF THE CHALLAN, WE FIND THE CONTENTIONS OF THE ASSESSEE TO BE CORRECT. THEREFORE, WE ARE INCLINED TO CONDON E THE DELAY AND PROCEED TO DISPOSE OF THE APPEAL ON MERITS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, WORKING IN MEGA SOFT LTD, FILED HIS RETURN OF INCOM E ON 8.8.2007 DECLARING INCOME FROM SALARY, HOUSE PROPERTY AND OT HER SOURCES AT RS.29,44,703 BESIDES SHORT TERM CAPITAL GAIN OF RS.19,09,764. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT DURING THE YEAR, THE ASSESSEE HAS SOL D 4 ACRES OF LAND SITUATED AT MOKILA VILLAGE, SHANKARPALLI MANDA L, RR DISTT. ASSESSEE WAS ASKED TO PRODUCE THE PURCHASE AND SALE DEEDS FOR THE SAME. ASSESSEE PRODUCED THE SAID DOCUMENTS. FUR THER,THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED EXPENDITU RE TOWARDS TRANSFER OF THIS PROPERTY AT RS.79,920 FOR THE STAM P DUTY AND RS.3.60 LAKHS FOR LAND LEVELING AND FENCING CHARGES . SINCE THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE EVI DENCE IN SUPPORT OF SAID EXPENDITURE, AO DISALLOWED THE SAME AND BROUGHT THE ENTIRE SHORT TERM CAPITAL GAIN ON SALE OF PLOT TO TAX. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) STATING THAT THE BILLS FOR THE EXPENSES COULD NOT BE PRODUC ED AT THE TIME OF HEARING, AS THE WHOLE TRANSACTION WAS BEING HAND LED BY OTHER PERSONS WHO HAD SOLD THE SAID LAND. IT WAS ALSO SUB MITTED THAT ITA NO.1417 OF 2015 GV KUMAR HYDERABAD PAGE 3 OF 6 NON PRODUCTION OF BILLS AT THE TIME OF THE ASSESSME NT WAS NOT WILLFUL OR DELIBERATE. THE CIT (A) THEREFORE, ADMIT TED THE ADDITIONAL EVIDENCE AND FORWARDED THE SAME TO THE A O CALLING FOR HIS REMAND REPORT. THE AO SUBMITTED THE REMAND REPO RT VIDE HIS REPORT DATED 03.04.2012 STATING THAT THE ASSESSEE H AD PRODUCED COPIES OF TWO BILLS FROM (1) M/S. PKR COMPANY ENGIN EERS & CONTRACTORS FOR RS.2,71,565/- AND (2) M/S. ANURADHA WIRE NETTING INDUSTRIES FOR RS.99,356 FOR PURCHASE OF GI FENCING WIRE, CEMENT POLES ETC. HE STATED THAT SUMMONS WERE ISSUE D TO SHRI RAJMOHAN RODA OF M/S. PKR COMPANY ENGINEERS & CONTR ACTORS, BUT THIS PERSON HAD CLOSED HIS BUSINESS AND HIS WHE REABOUTS WERE NOT KNOWN AND FURTHER THAT SUMMONS WERE ISSUED TO ONE SHRI B.V. ESWAR, PROP. OF M/S ANURADHA WIRE NETTING INDUSTRIES AND HIS STATEMENT WAS RECORDED ON 20.03.2012, WHERE IN HE CATEGORICALLY DENIED SELLING ANY GOODS TO THE ASSES SEE AND ALSO DISTINGUISHED THE COPIES OF THE BILLS AND OPINED TH AT THE PROFORMA OF THE ESTIMATE ISSUED BY HIM MIGHT HAVE BEEN MANIP ULATED. WHEN THE ASSESSEE WAS CONFRONTED WITH THIS INFORMAT ION, HE STATED THAT THE WORK WAS GOT DONE THROUGH A MAISTRY WHO HAS OBTAINED THE BILL AND HANDED IT OVER TO HIM. ASSESS EE, THUS, PRAYED FOR ACCEPTANCE OF THE BILLS. THEREFORE, ACCO RDING TO THE AO, THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE TO SU BSTANTIATE THE CLAIM OF INCURRING EXPENDITURE FOR LEVELING AND FEN CING WORK IS ACCEPTABLE AS (I) THE ORIGINAL PURCHASE INVOICES WE RE PRODUCED (II) THE PURCHASE INVOICE ISSUED BY SRI V.B. ESWAR, PROP ; M/S ANURADHA WIRE NETTING INDUSTRIES WAS NEITHER AN EST IMATE NOR A MANIPULATED ONE AS WAS IMAGINED BY SRI V.B. ESWAR; (III) THE ASSESSEES CONTENTION THAT HE IS NOT CONCERNED HOW THE SELLER DEALS WITH THE SALE TRANSACTIONS IN HIS BOOKS OF AC COUNTS IS ITA NO.1417 OF 2015 GV KUMAR HYDERABAD PAGE 4 OF 6 ACCEPTABLE. THE CIT (A) HOWEVER, HELD THAT THE ASSE SSEE HAS FAILED TO PROVE THE GENUINESS OF THE TRANSACTION WITH M/S PKR COMPANY ENGINEERS AND CONTRACTORS WHOSE WHEREABOUT S WERE NOT KNOWN AND ALSO WITH REGARD TO THE TRANSACTION W ITH M/S ANURADHA WIRE NETTING INDUSTRIES, THE EXPLANATION O F THE ASSESSEE CANNOT BE ACCEPTED AS THE PROPRIETOR OF TH E SAID FIRM CATEGORICALLY DENIED SELLING ANY GOODS TO THE ASSES SEE AND ALSO DISTINGUISHED THE BILL THAT WAS ISSUED BY HIM. THE CIT (A) CONFIRMED THE DISALLOWANCE MADE BY THE AO AND THE A SSESSEE IS IN 2 ND APPEAL BEFORE US. 3. WHILE THE LEARNED COUNSEL FOR THE ASSESSEE RELIE D UPON THE FINDINGS IN THE REMAND REPORT, WHEREIN THE AO HAS A CCEPTED THE GENUINENESS OF THE EXPENDITURE INCURRED BY THE ASSE SSEE TOWARDS LEVELLING AND FENCING WORK, THE LEARNED DR SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASS ESSEE, ALL ALONG STATED THAT HE HAD GOT THE WORK DONE THROUGH AN AGENCY WHEREAS BEFORE THE CIT (A), HE HAS PRODUCED BILL OF M/S. ANURADHA WIRE NETTING INDUSTRIES. THEREFORE, DUE TO THE CHANGE IN THE STAND OF THE ASSESSEE, THE BILLS PRODCUED BY THE ASSESSEE CANNOT BE RELIED UPON. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT DURING THE ASSESSMENT PROCEEDI NGS, THE ASSESSEE COULD NOT PRODUCE EITHER THE BILL OR PARTI ES TO PROVE THE IDENTITY OF THE RECIPIENTS AND THE GENUINESS OF THE TRANSACTION. HOWEVER, BEFORE THE CIT (A), ASSESSEE HAS FILED NEC ESSARY DETAILS. WE FIND THAT THE EXPENDITURE OF RS.3.60 LAKHS CONSI STS OF TWO PORTIONS I.E. RS.2,71,565 TOWARDS LEVELLING AND PLA NTATION WORK ITA NO.1417 OF 2015 GV KUMAR HYDERABAD PAGE 5 OF 6 AND RS.99,536 FOR PURCHASE OF GI FENCING FIRE, CEME NT POLLS ETC. THOUGH THE ASSESSEE MAY NOT HAVE BEEN ABLE TO PRODU CE THE RELEVANT PARTIES BEFORE THE AUTHORITIES BELOW, IT H AS NOT BEEN DENIED THAT THE ASSESSEE HAS CARRIED OUT THE LEVELI NG AND FENCING OF THE LAND AND ALSO PLANTATION IN THE LAND. IN SUC H CIRCUMSTANCES, THE REASONABLE AMOUNT TOWARDS SUCH A CTIVITIES SHOULD HAVE BEEN ALLOWED IF THE CIT (A) WAS NOT SAT ISFIED WITH THE GENUINENESS OF THE BILLS PRODUCED BY THE ASSESSEE. IN FACT, IN THE REMAND REPORT, THE AO HAS ACCEPTED THE PAYMENTS MAD E TO ANURADHA WIRE NETTING INDUSTRIES TOWARDS FENCING AN D AS REGARDS THE PAYMENT OF RS.2,71,565 TO M/S PKR COMPA NY ENGINEERS AND CONTRACTORS IS CONCERNED, IT IS STATE D THAT THE SAID PERSON DID NOT RESIDE IN THE PLACE WHEN INQUIRIES W ERE MADE. HENCE THOUGH THE ASSESSEE HAS NOT BEEN ABLE TO ESTA BLISH THAT THE BILLS ARE GENUINE, WE ALSO FIND THAT THE AO HAS MADE THE DISALLOWANCE MERELY ON THE GROUND THAT THE PERSON C OULD NOT BE FOUND. IN FACT, WE FIND THAT AO HAS NOT ASKED THE A SSESSEE TO PRODUCE THE SAID PERSON BEFORE HIM WHEN SUMMONS COU LD NOT BE SERVED ON HIM. THE RELEVANT FINANCIAL YEAR IS 2006- 07, WHILE THE SUMMONS WERE ISSUED IN 2012 I.E AFTER THE LAPSE OF NEARLY 6 YEARS AND THE ASSESSEE CANNOT BE HELD RESPONSIBLE F OR SUCH NON AVAILABILITY OF A THIRD PARTY. EVEN AS REGARDS THE EXPENDITURE TOWARDS FENCING AND PLANTATION WORK, WE FIND THAT T HE WORK DONE WAS NOT DOUBTED BY THE REVENUE. IN VIEW OF THE SAME , WE ARE INCLINED TO ACCEPT THE CONTENTIONS OF THE ASSESSEE ON THE ABOVE ISSUED AND WE DIRECT THE AO TO ALLOW THE AMOUNT OF RS.3.60 LAKHS TOWARDS COST OF IMPROVEMENT WHILE COMPUTING T HE SHORT TERM CAPITAL GAIN. ITA NO.1417 OF 2015 GV KUMAR HYDERABAD PAGE 6 OF 6 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JULY, 2016. S D/ - S D/ - (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 29 TH JULY, 2016. VNODAN/SPS COPY TO: 1. SHRI G.V. KUMAR, C/O LALITH PRASAD & CO. CAS, 402 G OLDEN GREEN APARTMENTS, 6-3-542/1 ERRUMANZIL COLONY, PANJAGUTTA HYDERABAD 500082 2. INCOME TAX OFFICER, WARD 12(1) HYDERABAD 3. CIT(A) -1 HYDERABAD 4. PR.CIT -1 HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER