Seetharama Rao Ramadugu , Hyderabad V. Income Tax Officer, Ward-15(4), Hyderabad

ITA 1422/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4801 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-02-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 16-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A.V. VISHAL
• Keywords: Presumptive income; Business income
• Section: 44AD; 142(1)

Judgement Text

ITA NO 1422 OF 2019 SEETHARAMA RAO RAMADUGU SECUN DERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO1422./HYD/2019 ASSESSMENT YEAR:2015-16 SHRI SEETHARAMA RAO RAMADUGU, SECUNDERABAD PAN:ADNPR6429C VS. INCOME TAX OFFICER WARD 15(4) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.V. VISHAL REVENUE BY : SRI K.N. SURESH BABU, DR DATE OF HEARING: 18/02/2021 DATE OF PRONOUNCEMENT: 10/05/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2015-16 AGAIN ST THE ORDER OF THE CIT (A)-7, HYDERABAD, DATED 12.7.2 019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED HIS RETURN OF INCOME FOR THE A.Y 2015-16 ON 20.6.2016 A DMITTING A TOTAL INCOME OF RS.3,04,150/-. SUBSEQUENTLY, THE CA SE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S 143 (2) WAS ISSUED TO THE ASSESSEE. HOWEVER, NONE APPEARED ON B EHALF OF THE ASSESSEE. THEREFORE, THE OFFICE INSPECTOR WAS DEPUT ED AND A NOTICE U/S 142(1) WAS SERVED BY AFFIXTURE. HOWEVER, THERE WAS NO RESPONSE FROM THE ASSESSEE AND THEREFORE, THE AO CO MPLETED THE ASSESSMENT BY TREATING THE CASH DEPOSITS OF RS.94.8 5 LAKHS IN HIS BANK A/C HELD WITH AXIS BANK, TRIMUALGHERY, SECUNDE RABAD AS INCOME OF THE ASSESSEE FROM UNEXPLAINED SOURCES AND BROUGHT IT TO TAX. ITA NO 1422 OF 2019 SEETHARAMA RAO RAMADUGU SECUN DERABAD PAGE 2 OF 4 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A) STATING THAT NOTICES WERE NOT SERVED ON THE ASSESSEE AND THAT THE NOTICES WERE SERVED ON THE PROPERTY ADDRES S WHICH WAS SOLD AWAY AND FURTHER THAT WHILE FILING THE RETURN OF INCOME, THE TAX PROFESSIONAL HAD GIVEN HIS MOBILE AND OFFICE PH ONE NUMBERS, DUE TO WHICH THE DEPARTMENT WAS COMMUNICATING WITH THE TAX PROFESSIONAL, WHO IN TURN DID NOT INTIMATE THE ASSE SSEE NOR DID HE SHARE ASSESSEES MOBILE NUMBER WITH THE DEPARTMENT. HE, THEREFORE, PRAYED THAT THE LEARNED CIT (A) GIVE HIM AN OPPORTUNITY TO REPRESENT THE MATTER. 4. THE LEARNED CIT (A) ENTERTAINED THE SAID PLEA AN D CALLED FOR A REMAND REPORT FROM THE AO. THE AO SUBM ITTED THE REMAND REPORT ON 11.2.2019 WHICH WAS FURNISHED TO T HE ASSESSEE AND THE ASSESSEE ALSO SUBMITTED HIS OBJECTIONS TO T HE SAME. THEREAFTER, THE CIT (A) OBSERVED THAT THE AO HAS VE RIFIED VARIOUS AMOUNTS DEPOSITED INTO THE BANK A/C AND CAME TO THE CONCLUSION THAT AN AMOUNT OF RS.35,15,200/- REMAINED UNEXPLAIN ED. IN REPLY TO THE REMAND REPORT, THE ASSESSEE SUBMITTED THAT T HE AO DID NOT CONSIDER THE AMOUNT OF RS.40.00 LAKHS RECEIVED BY T HE ASSESSEE FROM THE VENDEE (IN ADDITION TO THE SALE CONSIDERAT ION) FOR CARRYING OUT THE REPAIR WORKS, THE MATERIAL SUPPLIERS ETC. T HE CIT (A), HELD THAT THIS CONTENTION OF THE ASSESSEE IS NOT ACCEPTA BLE, SINCE NO EVIDENCE WAS FURNISHED BY THE ASSESSEE IN SUPPORT O F THE CLAIM OF RECEIPT OF RS.40.00LAKHS. HE FURTHER OBSERVED THAT THE CLAIM OF EXPENDITURE OF RS.15,11,500/- IS ALSO NOT SUPPORTED BY ANY EVIDENCE. THEREFORE, HE RESTRICTED THE ADDITION TO RS.35,15,200/- AS AGAINST THE ADDITION OF RS.94,85,380/- MADE BY T HE ASSESSING OFFICER. 5. AGGRIEVED BY THE CONFIRMATION OF PART OF THE ADD ITION I.E., TO THE EXTENT OF RS.35,15,200/-, THE ASSESSEE IS IN SECOND ITA NO 1422 OF 2019 SEETHARAMA RAO RAMADUGU SECUN DERABAD PAGE 3 OF 4 APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT (A) ERRED IN FACTS AND CIRCUMST ANCES OF THE CASE IN CONFIRMING ADDITION TO THE TUNE OF RS.15,11,500/- AS UNEXPLAINED. 2. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED AN D CONSIDERED THE FACT THAT THE AMOUNT RECEIVED AND DEPOSITED TO THE TUNE OF RS.40,00,000 IS PART OF GR OSS RECEIPTS OF THE ASSESSEE BUSINESS INCOME BEING A CI VIL CONTRACTOR. 3. THE LEARNED CIT (A) OMITTED TO APPLY SECTION 44A D (PRESUMPTIVE INCOME) AS ASSESSEE BEING A CIVIL CONTRACTOR AND HAS BEEN REGULARLY FILING ITS RETURN OF INCOME UNDER SAID SECTION IN RESPECT OF RECEIPT OF RS.40,00,000/- ALSO. 4. THE LOWER AUTHORITIES OUGHT TO HAVE ESTIMATED GR OSS RECEIPTS OF RS.40,00,000/- @ 8% BEING A PRESUMPTIVE PROVISION U/S 44AD R.W.S. 44AA WHERE NO BOOKS ARE REQUIRED TO BE MAINTAINED. 5. THE APPELLANT CRAVES TO ADD, ALTER, AMEND, SUBST ITUTE, OMIT AND OR MODIFY ALL OR ANY ONE OF THE GROUNDS. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS OFFERED HIS INCOME U/S 44AD OF THE ACT AND THEREFORE, EVEN THE UNEXPLAINED DEPOSITS SHOULD HAV E BEEN TREATED AS HIS BUSINESS TURNOVER AND PROFIT THEREON SHOULD HAVE BEEN ESTIMATED AT 8%, INSTEAD OF BRINGING THE ENTIRE UNE XPLAINED DEPOSITS TO TAX. 7. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THERE IS NO EVIDENCE THAT THE ASSESSEE HAS BEEN CAR RYING ON WORK OF CIVIL CONTRACT AND THEREFORE, THE UNEXPLAINED CA SH DEPOSITS TO THE EXTENT OF RS.35,15,200/-WERE RIGHTLY BROUGHT TO TAX AS INCOME FROM OTHER SOURCES. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS CLAIMED THA T IN ADDITION TO THE SALE CONSIDERATION RECEIVED FOR SALE OF THE PRO PERTY, THE ITA NO 1422 OF 2019 SEETHARAMA RAO RAMADUGU SECUN DERABAD PAGE 4 OF 4 ASSESSEE HAS RECEIVED A FURTHER SUM OF RS.40.00 LAK HS FOR RENOVATION OF THE PROPERTY AS HE HIMSELF WAS A CIVI L CONTRACTOR AND THE VENDEE HAD REQUESTED HIM TO DO THE NEEDFUL. THE ASSESSEE CLAIMS THAT THE SAID SUM OF RS.40.00 LAKHS SHOULD B E TREATED AS SOURCE FOR THE UNEXPLAINED DEPOSITS TO THE EXTENT O F RS.35,15,200/-. ALTERNATIVELY, WITHOUT PREJUDICE TO THE SUBMISSION, THE ASSESSEE FURTHER SUBMITS THAT THIS SUM OF RS.40.00 LAKHS SHOULD BE CONSIDERED AS PART OF GROS S TURNOVER OF THE ASSESSEE AND THE PROFIT THEREON SHOULD BE ESTIM ATED @ 8% AS OFFERED BY THE ASSESSEE U/S 44AD OF THE ACT. HOWEVE R, NO EVIDENCE HAS BEEN FILED BEFORE ANY OF THE OFFICERS IN SUPPOR T OF THE CLAIM OF RECEIPT OF RS.40.00 LAKHS OR THAT THE ASSESSEE HAS RENOVATED THE PROPERTY ON BEHALF OF THE VENDEE. NO EVIDENCE OF AN Y KIND, MUCH LESS THE PROCUREMENT OF MATERIAL FOR DOING SUCH WOR K, HAS BEEN PRODUCED BEFORE ANY OF THE AUTHORITIES, MUCH LESS B EFORE THE TRIBUNAL. THEREFORE, I SEE NO REASON TO ACCEPT THE CONTENTIONS OF THE ASSESSEE AND TO INTERFERE WITH THE ORDER OF THE CIT (A) ON THIS ISSUE. IN VIEW OF THE SAME, THE ASSESSEES APPEAL I S DISMISSED. 9. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 10 TH MAY, 2021. VINODAN/SPS COPY TO: 1 SHRI SEETHARAMA RAO RAMADUGU C/ JANARDHAN RAO DES HMUKH & CO, C.AS, H.NO.7-1-65/B, 304, 3 RD FLOOR, LUMBINI APARTMENTS, DK ROAD, AMEERPET, HYDERABAD 500016 2 ITO WARD 15(4) 5 TH FLOOR, BLOCK D IT TOWERS, AC GUARDS, MASAB TANK HYDERABAD 500004 3 CIT (A)-7 HYDERABAD 4 PR. CIT 7 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER