Sri Daru Rajender Rao, Hyderabad V. ITO,Ward-I, Sanga Reddy

ITA 146/HYD/2013

• Counselvise Citation: 14622514 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: S RAMA RAO
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 146/HYD/2013 ASSESSMENT YEAR : 2008-09 SRI DARU RAJENDER RAO, HYDERABAD INCOME TAX OFFICER, WARD 1, SANGA REDDY (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI S. RAMA RAO REVENUE BY SHRI RAJAT MITRA DATE OF HEARING 12-11-2014 DATE OF PRONOUNCEMENT 19-11-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 21/12/12 PASSED BY THE COMMISSIONER OF INCOME-TAX( A)-III, HYDERABAD, FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY THE FACTS ARE, ASSESSEE AN INDIVIDUAL IS ENGAGED IN REAL ESTATE BUSINESS. FOR THE AY UNDER DISPUTE, ASSESSEE FILED HIS RETURN OF INCOME ON 26/03/2009 DECLARING TOTAL INCOME OF R S. 2,45,900 ALONG WITH AGRICULTURAL INCOME OF RS. 2,50,000. DURING TH E SCRUTINY ASSESSMENT PROCEEDING, THOUGH, NOTICES U/S 143(2) A ND 142(1) WAS ISSUED TO ASSESSEE, AS MENTIONED BY AO, THERE WAS N O RESPONSE FROM ASSESSEE. THEREFORE, AO FINALLY ISSUED A SHOW CAUSE LETTER TO ASSESSEE CALLING UPON HIM TO APPEAR AND REPRESENT H IS CASE IN ABSENCE OF WHICH HE PROPOSED TO COMPLETE ASSESSMENT EX-PARTE TO 2 ITA NO. 146/HYD/2013 SRI DARU RAJENDER RAO THE BEST OF HIS JUDGMENT U/S 144 OF THE ACT. AS ALL EGED BY AO, THERE WAS NO SUBSTANTIVE COMPLIANCE TO THE NOTICE ISSUED FOR EXPLAINING SOURCE OF DEPOSITS IN THE BANK ACCOUNTS. AO PROCEED ED TO COMPLETE THE ASSESSMENT EX-PARTE TO THE BEST OF HIS JUDGMENT BY TREATING THE DEPOSITS MADE INTO THE BANK ACCOUNT AS UNEXPLAINED INCOME OF ASSESSEE WHICH RESULTED IN DETERMINATION OF TOTAL I NCOME AT RS. 96,41,500. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). LD. CI T(A) ALSO CONFIRMED THE ADDITION MADE BY AO WITH THE FOLLOWIN G OBSERVATIONS: 4. DURING APPEAL PROCEEDINGS, AS ALREADY STATED THE APPELLANT DID NOT PROVIDE ANY REPLY OR EVIDENCE TO DEMONSTRATE THAT THE CASH DEPOSITS WERE MADE FROM EXPLAINED SOU RCES. I HAVE SEEN CAREFULLY THE FACTS, THE EVIDENCE ON RECO RD AND I FIND THAT ALL THE DEPOSITS IN QUESTION HAVE BEEN MADE IN CASH. THERE IS NO EVIDENCE OF CIRCULATION OF THE SAME MONEY. IN THE ABSENCE OF ANY EXPLANATION OR PROOF, I HOLD THAT THE AO IS RIGHT IN ASSESSING THE CASH DEPOSITS AS INCOME FROM UNEXPLAI NED SOURCES OR AS UNEXPLAINED CASH DEPOSITS. THE ADDITI ON MADE IS CONFIRMED. 3. ASSESSEE THOUGH HAS RAISED GROUNDS CHALLENGING T HE ADDITIONS, MADE BY AO AND CONFIRMED BY LD. CIT(A), HOWEVER, AT THE OUTSET, LD. AR SUBMITTED HE HAS FILED A PETITION SEEKING PERMIS SION TO SUBMIT ADDITIONAL EVIDENCES BEING CONFIRMATION LETTERS AND SOME OTHER DOCUMENTS IN SUPPORT OF DEPOSITS MADE INTO BANK ACC OUNTS. LEARNED AR SUBMITTED THAT THE DEPOSITS MADE INTO THE BANK A CCOUNTS WERE RECEIVED TOWARDS LOAN FROM CLOSE FRIENDS AND FAMILY MEMBERS OF ASSESSEE FOR BUSINESS PURPOSE AND THEY WERE RECEIVE D THROUGH DEMAND DRAFTS. LEARNED AR SUBMITTED THAT DURING THE ASSESSMENT PROCEEDING, ASSESSEE COULD NOT FURNISH CONFIRMATION LETTERS IN TIME DUE TO NON-COOPERATION FROM THE CONCERNED PERSONS A S A RESULT OF WHICH ASSESSMENT WAS COMPLETED EX-PARTE U/S 144. HE FURTHER SUBMITTED THAT THOUGH DURING THE PROCEEDING BEFORE LD. CIT(A), ASSESSEE WAS ABLE TO OBTAIN THE CONFIRMATION LETTER S, HOWEVER, LD. CIT(A) REFUSED TO ACCEPT CONFIRMATION LETTERS ON TH E REASON THAT ASSESSEE DID NOT RESPOND TO THE HEARING NOTICES ON TWO EARLIER 3 ITA NO. 146/HYD/2013 SRI DARU RAJENDER RAO OCCASIONS. HE, THEREFORE, SUBMITTED THAT AS ADDITIO NAL EVIDENCE IN SHAPE OF CONFIRMATION LETTERS ALONG WITH ANNEXURES ARE CRUCIAL FOR DETERMINING WHETHER DEPOSITS MADE INTO BANK ACCOUNT S ARE REALLY UNEXPLAINED, THE SAME MAY BE ADMITTED AS ADDITIONAL EVIDENCE AND AO MAY BE DIRECTED TO VERIFY THE SAME. 4. THE LEARNED DR, THOUGH, SUBMITTED THAT IN SPITE OF AVAILING SUFFICIENT OPPORTUNITY, ASSESSEE FAILED TO PRODUCE EVIDENCE TO EXPLAIN THE DEPOSITS MADE INTO BANK ACCOUNTS, BUT, HE NEVER THELESS SUBMITTED THAT THE ADDITIONAL EVIDENCE PRODUCED BY ASSESSEE M AY BE EXAMINED BY AO. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. A S CAN BE SEEN, ASSESSMENT IN CASE OF ASSESSEE WAS COMPLETED EX-PAR TE U/S 144 OF THE ACT, IN ABSENCE OF PROPER REPRESENTATION BY ASS ESSEE. AS NO SUPPORTING EVIDENCE WAS PRODUCED, AO TREATED THE EN TIRE DEPOSITS MADE INTO DIFFERENT BANK ACCOUNTS AS UNEXPLAINED CR EDITS AND ADDED THE SAME TO INCOME OF ASSESSEE. LD. CIT(A) CONFIRME D THE ADDITION IN ABSENCE OF SUPPORTING EVIDENCE. HOWEVER, BEFORE US, ASSESSEE HAS FILED CONFIRMATION LETTERS FROM THREE PERSONS IN SU PPORT OF THE DEPOSITS MADE INTO THE BANK ACCOUNTS WITH ACCOMPANYING DOCUM ENTS. CONSIDERING THE NATURE OF ADDITION AND ALSO THE FAC T THAT ADDITIONS WERE MADE FOR NON-FURNISHING OF CONFIRMATION LETTER S AND OTHER SUPPORTING EVIDENCE EXPLAINING THE SOURCE OF DEPOSI TS, WE ARE INCLINED TO REMIT THE MATTER BACK TO THE FILE OF AO TO ASCERTAIN THE CORRECTNESS OF CONFIRMATION LETTERS PRODUCED BY ASS ESSEE AFTER PROPER ENQUIRY. WE MAKE IT CLEAR THAT WE HAVE NOT EXPRESSE D ANY OPINION EITHER ON THE ADDITIONAL EVIDENCES OR ON THE MERITS OF ADDITION MADE BY AO. THE AO HAS TO EXAMINE THE EVIDENCES PRODUCED ACCORDING THEIR OWN MERITS, HOWEVER, BEFORE DECIDING THE ISSU E HE MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE A ND ALLOW HIM TO 4 ITA NO. 146/HYD/2013 SRI DARU RAJENDER RAO FURNISH EVIDENCE AND MATERIAL IN SUPPORT OF HIS CLA IM. ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO IN FINALIZIN G THE PROCEEDING. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 19/11/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 19 TH NOVEMBER, 2014 KV COPY TO:- 1) SRI DARU RAJENDER RAO, C/O M/S MURTHY & KANTH, CAS, FLAT NO. 113, SOVEREIGN SHELTERS, LAKADIKAPUR, HYDERABAD -4 2) ITO, WARD 1, SANGA REDDY, RANGE 8,, HYDERABA D. 3) CIT(A)-III, HYDERABAD 4) CIT-II, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.