Kishore Kumar Jain, Secunderabad V. ITO, Ward-7(3), Hyderabad

ITA 1472/HYD/2013

• Counselvise Citation: 147222514 RSA 2013
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 19-11-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 07-11-2013
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Keywords: Search and seizure; Additional evidence
• Section: 153A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1472/HYD/2013 ASSESSMENT YEAR : 2004-05 KISHORE KUMAR JAIN, HYDERABAD [PAN: ACEPJ1928Q] VS INCOME TAX OFFICER, WARD-7(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI Y. RATNAKAR , AR FOR REVENUE : SHRI B. KURMI NAIDU, DR DATE OF HEARING : 19 - 1 1 - 201 5 DATE OF PRONOUNCEMENT : 02 - 1 2 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, HYDERABAD DATED 02-08-2013. DURING THE PROCEEDINGS, ASSESSEE FILED PETITION UNDER RULE 11 OF THE APPELLATE TRIBUNAL RULES FOR ADMISSI ON OF ADDITIONAL GROUND AND ALSO A PRAYER UNDER RULE 29 FOR ADMISSIO N OF ADDITIONAL EVIDENCE. 2. THE ISSUE INVOLVED IN THIS APPEAL IS WITH REFERE NCE TO CLAIM OF CREDIT OF AN AMOUNT OF RS. 26,49,016/-. BRIEFLY ST ATED, THERE WERE SEARCH AND SEIZURE OPERATIONS IN THE CASE OF ASSESS EE. ASSESSEE IS I.T.A. NO. 1472/HYD/2013 KISHORE KUMAR JAIN :- 2 -: DIRECTOR OF A COMPANY, M/S. KHIWASARA FINANCE AND L EASING LTD., IN WHICH IT WAS FOUND OUT THAT THERE WERE MANY BANK ACCOUNTS WHICH ARE BEING OPERATED FOR PRIMARY ISSUE APPLICAT IONS, INVESTMENTS AND TRADING IN SHARES ETC. ASSESSEE AD MITTED VARIOUS INCOMES STARTING FROM AY. 2004-05 TO 2008-09 TOTAL ING RS. 1.30 CRORES. THE ISSUE IN THE IMPUGNED ASSESSMENT YEAR IS WITH REFERENCE TO DISCLOSURE OF RS. 50 LAKHS. EVEN THOU GH THIS AMOUNT WAS DECLARED U/S. 132(4) OF THE INCOME TAX ACT [ACT ], ASSESSEE AT THE TIME OF FILING RETURN TOOK CREDIT OF AN AMOUNT OF RS. 26,49,015/-, BEING THE AMOUNTS STATED TO HAVE BEEN ASSESSED IN EARLIER YEARS, CONSEQUENT TO THE ORDERS OF THE ITSC /ITAT. AO IN THE PROCEEDINGS U/S. 153A HAS ACCEPTED ASSESSEES CONTE NTIONS AND BROUGHT TO TAX ONLY THE BALANCE AMOUNT OUT OF RS. 5 0 LAKHS, AS ADMITTED BY ASSESSEE. THERE WERE PROCEEDINGS U/S. 263 NOT ONLY IN ASSESSEES CASE BUT HIS CO-DIRECTOR SRI SANTOSH KUM AR JAIN AS WELL WHO ALSO TOOK SIMILAR CREDIT IN HIS RETURNS. WHEN T HE MATTERS WERE SET ASIDE TO THE AO FOR RE-EXAMINATION, ASSESSEES H AVE NOT CHALLENGED THE ORDERS U/S. 263. IN THE CONSEQUENTI AL PROCEEDINGS, THE AO DID NOT AGREE WITH THE TELESCOPING BENEFIT C LAIMED BY ASSESSEE ON THE REASON THAT THE AMOUNTS WERE NOT DI SCLOSED BY ASSESSEE IN THE RETURNS, NOR THERE IS ANY NEXUS WIT H REFERENCE TO THE AMOUNTS INVESTED IN VARIOUS BANK ACCOUNTS WHICH HAVE BEEN DECLARED. 3. ON APPEAL, LD. CIT(A) IN HIS ELABORATE ORDERS AG REED WITH THE CONTENTIONS OF THE AO AND DID NOT GIVE ANY RELIEF T O ASSESSEE, MAINLY ON THE REASON THAT THERE IS NO NEXUS ESTABLI SHED AND ALSO OBSERVING THAT ITAT HAS GIVEN FINDING THAT NO AMOUN TS HAVE BEEN PAID TO THESE ASSESSEES AND WAS ROTATED IN THE COMP ANYS HANDS ONLY, THEREFORE, THE AMOUNTS CANNOT BE GIVEN CREDIT . FURTHER, LD. I.T.A. NO. 1472/HYD/2013 KISHORE KUMAR JAIN :- 3 -: CIT(A) ALSO HELD THAT ASSESSEE CLAIMED TO HAVE RECE IVED ONLY AN AMOUNT OF RS. 6,11,102/- AND THEREFORE, THE INTERES T RECEIVABLE BY ASSESSEE FROM THE COMPANY TO AN EXTENT OF RS. 26,45 ,016/- CANNOT BE TELESCOPED AGAINST THE ADMITTED INCOME OF RS. 50 LAKHS. IN HIS DETAILED ORDER, LD. CIT(A) CONFIRMED THE ACTIONS OF THE AO. 4. BEFORE US, LD. COUNSEL WHILE PRAYING FOR ADMISSI ON OF ADDITIONAL GROUNDS AND ALSO ADDITIONAL EVIDENCE FIL ED DETAILED WRITTEN SUBMISSIONS RUNNING TO 9 PAGES. THE SUMMAR Y OF THE WRITTEN SUBMISSIONS ARE: A. THAT AO HAS TAXED AN AMOUNT OF RS. 26,49,016/- IN A Y. 1998-99 AND 1999-2000, THE AMOUNTS OF WHICH WERE AVAILABLE WITH ASSESSEE AND WAS PART OF UNDISCLOSED TRANSACTIONS IN VARIOUS BANK TRANSACTIONS; B. THAT ASSESSEE COULD NOT HAVE THAT MUCH CAPITAL OF R S. 50 LAKHS IN AY. 2004-05 AND SUBMITTED THAT ALL THE ACCUMULATED TRANSACTIONS UP TO THAT YEAR WERE CONSOLIDATED AND TAKEN AS DISCLOSURE. THEREFORE, T HE PAST INCOMES WHICH WERE BROUGHT TO TAX ARE TO BE GIVEN C REDIT; C. THAT IN THE HANDS OF THE ANOTHER DIRECTOR, SRI SANT OSH KUMAR JAIN, AO, CENTRAL CIRCLE HAS ACCEPTED ASSESSE ES CONTENTIONS IN HIS CONSEQUENTIAL ORDERS AND DID NOT BRING ANY AMOUNTS TO TAX EVEN THOUGH THE FACTS ARE SIMILA R. IT WAS SUBMITTED THAT THE ADDITIONAL EVIDENCE FILE D IS TO ESTABLISH THAT THOSE AMOUNTS WERE AVAILABLE TO ASSE SSEE. I.T.A. NO. 1472/HYD/2013 KISHORE KUMAR JAIN :- 4 -: 5. WITHOUT GOING INTO THE DETAILED SUBMISSIONS OF A SSESSEE, WE ARE OF THE OPINION THAT THE MATTER REQUIRE RE-EXAMI NATION BY AO. IT IS A FACT THAT PROCEEDING U/S. 263 WERE INITIATED N OT ONLY IN ASSESSEES CASE BUT ALSO IN THE HANDS OF THE OTHER DIRECTOR SRI SANTOSH KUMAR JAIN BY THE LD. CIT AND SIMILAR ORDER S WERE PASSED IN BOTH THE HANDS. THE FACTS BEING SIMILAR, WE NOT ICE THAT THE AO, DCIT, CIRCLE-II, HYDERABAD HAS ACCEPTED ASSESSEES CONTENTIONS AND DID NOT MAKE ANY ADDITION WHEREAS THE AO WHO IS ASSESSING THE PRESENT ASSESSEE DID NOT ACCEPT THE CONTENTIONS AND MADE THE ADDITION. SINCE THE FACTS IN BOTH THE CASES ARE NO T BEFORE US, WE ARE UNABLE TO EXPRESS ANY OPINION ABOUT ASSESSEES CONTENTIONS. SINCE ASSESSEE ALSO FILED ADDITIONAL EVIDENCE BEFOR E US INCLUDING A CONFIRMATION FROM THE COMPANY THAT THE AMOUNTS WERE PAID TO THE DIRECTORS, WE ARE OF THE OPINION THAT THE MATTER RE QUIRE RE- EXAMINATION BY THE AO. IT IS ALSO A CONTENTION THA T ASSESSEE ADMITTED INCOMES ARISING OUT OF TRANSACTIONS OF EAR LIER YEARS IN THIS IMPUGNED ASSESSMENT YEAR, THE FACT OF WHICH ALSO CO ULD NOT BE VERIFIED IN THE ABSENCE OF ANY DECLARATION GIVEN/ E VIDENCE PLACED BEFORE US. UNLESS THE BANK ACCOUNTS AND THE METHOD OLOGY OF DECLARATION OF RS. 50 LAKHS WAS EXAMINED, IT IS NOT POSSIBLE TO CONSIDER WHETHER THE INTEREST AMOUNTS TAXED IN AYS. 1998-99 AND 1999-2000 COULD BE GIVEN TELESCOPIC BENEFIT AND THI S ASPECT REQUIRES EXAMINATION BY THE AO. NOT ONLY THAT, AO IS ALSO DIRECTED TO EXAMINE WHETHER THE COMPANY HAS PAID THE AMOUNTS WHICH WERE SUPPOSED TO BE OUTSIDE THE BOOKS OF ACCOUNT AS ON THE DATE OF SURVEY IN EARLIER PROCEEDINGS AND WHETHER THAT AMOU NT COULD BE GIVEN CREDIT FOR INVESTMENT BY EXAMINING THE CAPITA L ACCOUNTS OF PARTIES INVOLVED AND FUNDS FLOW IF ANY. SINCE THIS REQUIRE DETAILED EXAMINATION OF RECORDS AND OTHER DOCUMENTS, THE IMP UGNED ORDERS OF THE AO/CIT(A) ARE SET ASIDE WITH A DIRECTION TO GIVEN PROPER I.T.A. NO. 1472/HYD/2013 KISHORE KUMAR JAIN :- 5 -: OPPORTUNITY TO ASSESSEE TO SUBSTANTIATE THE CLAIM A ND DECIDE AFRESH. THE GROUNDS ARE CONSIDERED ALLOWED FOR STA TISTICAL PURPOSES. 6. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND DECEMBER, 2015 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 02 ND DECEMBER, 2015 TNMM COPY TO : 1. KISHORE KUMAR JAIN, 15-1-387, OLD FEELKHANA, HYDERABAD. C/O. LUHARUKA & ASSOCIATES, CHARTERED ACCOUNTANTS, 5-4-187/3 & 4, SOHAM MANSION, 2 ND FLOOR, M.G. ROAD, SECUNDERABAD. 2. INCOME TAX OFFICER, WARD-7(3), 2 ND FLOOR, I.T. TOWERS, HYDERABAD. 3. CIT (APPEALS)-VI, HYDERABAD. 4. THE CIT-VI, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6 . GUARD FILE.