K. Rama Krishna Raju, Secunderabad V. ITO, Ward-11(3), Hyderabad

ITA 1497/HYD/2013

• Counselvise Citation: 149722514 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 21-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 13-11-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P PRASAD
• Keywords: Business income
• Section: 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. ASST. YEAR APPELLANT RESPONDENT 1497/HYD/2013 2003-04 K. RAMA KRISHNA RAJU, HYDERABAD [PAN : AHVPK4390D] INCOME TAX OFFICER, WARD-11(3), HYDERABAD 1498/HYD/2013 2003-04 K. PADMAVATHI, HYDERABAD [PAN : APCPK4980L] 1499/HYD/2013 2004-05 FOR ASSESSEE : SHRI P. PRASAD, AR FOR REVENUE : SHRI RAJAT MITRA, DR DATE OF HEARING : 21-08-2015 DATE OF PRONOUNCEMENT : 26-08-2015 THESE THREE APPEALS ARE AGAINST ORDERS OF THE COMM ISSIONER OF INCOME TAX(APPEALS)-18, MUMBAI DATED 05-03-2013 & 1 9-08-2013. SINCE ASSESSEES ARE RELATED AND AS THERE ARE COMMON ISSUES, THESE APPEALS ARE HEARD TOGETHER AND DECIDED BY THIS COMM ON ORDER. ITA NO. 1497/HYD/2013 : 2. ASSESSEE HAS FILED RETURN OF INCOME OF RS. 1,34, 200/- PERTAINING TO INCOME DERIVED FROM HOUSE PROPERTY AND INCOME IN CI VIL CONTRACTS. ASSESSEE ALSO ADMITTED AGRICULTURE INCOME OF RS. 50 ,000/-. CONSEQUENT TO SOME SURVEY OPERATION CARRIED ON IN THE FIRM IN WHICH ASSESSEE AND HIS WIFE SMT. K. PADMAVATHI ARE PARTNERS ON 23-08-2 004, A NOTICE U/S. 148 OF THE INCOME TAX ACT [ACT] WAS ISSUED ON 19-07 -2005. IN THE CONSEQUENTIAL PROCEEDINGS, ASSESSING OFFICER (AO) D ISBELIEVED THE I.T.A. NOS. 1497, 1498 & 1499/HYD/2013 K. RAMA KRISHNA RAJU & K. PADMAVATHI :- 2 -: AGRICULTURAL INCOME OF RS. 50,000/- ADMITTED BY ASS ESSEE AND ALSO ADDED THE AMOUNT OF RS. 3 LAKHS INVESTED IN THE FIRM BY A SSESSEE AS UN- EXPLAINED. IT WAS THE CONTENTION OF ASSESSEE THAT HE DERIVES INCOME FROM HOUSE PROPERTY, BUSINESS INCOME AND AGRICULTURAL IN COME AND ALSO ACCUMULATES SAVINGS OF THE EARLIER YEARS. SINCE AS SESSEE HAILS FROM AGRICULTURAL FAMILY, IT WAS SUBMITTED THAT PROPER S OURCES ARE AVAILABLE. LD. CIT(A) HOWEVER, DID NOT ACCEPT THE CONTENTION A ND DISMISSED THE APPEAL UPHOLDING THE ASSESSMENT ORDER. 3. LD. COUNSEL REFERRING TO THE SUBMISSIONS MADE BE FORE THE AO AS WELL AS CIT(A) SUBMITTED THAT ASSESSEE HAILS FROM A GRICULTURAL FAMILY FROM PALAKODERU MANDAL, NARASAPUR TALUK OF WEST GOD AVARI DIST., AND AGRICULTURAL INCOME WAS BEING RECEIVED FROM YEAR TO YEAR. HE REFERRED TO THE ORDER OF CIT(A)-VI, HYDERABAD IN AY. 2004-05, W HEREIN THE LD. CIT(A) ACCEPTED THE AGRICULTURAL INCOME OF RS. 30,000/- WH EN SIMILAR ADDITION WAS MADE IN THAT YEAR ALSO. WITH REFERENCE TO THE INVESTMENT OF RS. 3 LAKHS IN THE PARTNERSHIP FIRM, IT WAS THE SUBMISSIO N THAT ASSESSEE HAS PAST SAVINGS AND COPIES OF INCOME TAX RETURNS FOR T HE LAST THREE YEARS WERE ENCLOSED TO SUPPORT THAT ASSESSEE WAS HAVING B USINESS INCOME AS WELL AS AGRICULTURAL INCOME TO INVEST IN THE FIRM. HE ALSO ENCLOSED THE PROPERTY DETAILS IN SUPPORT. 4. LD. DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUT HORITIES. 5. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE FA CTS ON RECORDS. EVEN THOUGH ASSESSEE HAS ADMITTED AN INVESTMENT OF RS. 3 LAKHS IN THE FIRM IN THE STATEMENT U/S. 133A ON 23-08-2004 (RELE VANT TO AY. 2004- 05), AO CHOOSE TO MAKE THE ADDITION IN AY. 2003-04 WITHOUT BRINGING ANYTHING ON THE RECORD ABOUT THE YEAR OF INVESTMENT , DETAILS OF INVESTMENT AND THE MODE OF INVESTMENT. HOWEVER, IN THE STATEMENT OF I.T.A. NOS. 1497, 1498 & 1499/HYD/2013 K. RAMA KRISHNA RAJU & K. PADMAVATHI :- 3 -: FACTS, AO ADMITS OF MAKING INVESTING OF RS. 3 LAKHS IN THE FIRM DURING THE FINANCIAL YEAR ENDED ON 31-03-2003 AND NO REMUN ERATION WAS RECEIVED. IN THE COURSE OF SURVEY ITSELF ASSESSEE ADMITTED THE INVESTMENT OF RS. 3 LAKHS, OUT OF THE AGRICULTURAL INCOME DERI VED ALONG WITH HIS BUSINESS INCOME, AND RENTAL INCOMES BEING RECEIVED REGULARLY. CONSIDERING THE NATURE OF INCOMES THAT HAVE BEEN OF FERED BY ASSESSEE IN EARLIER YEARS AND ALSO THE RENTAL INCOMES BEING REC EIVED REGULARLY AND ALSO THE FACT THAT ASSESSEE OWNS AGRICULTURAL LANDS , AN INVESTMENT OF RS. 3 LAKHS FROM ASSESSEES OWN SOURCES CANNOT BE DOUBT ED. IN VIEW OF THIS, WE ARE OF THE OPINION THAT NO ADDITION IS REQUIRED FOR THE INVESTMENT MADE IN THE FIRM. 5.1 COMING TO THE AGRICULTURAL INCOME, EVEN THOUGH ASSESSEE OWNS AGRICULTURAL LANDS OF 2.06 ACRES IN WEST GODAVARI D IST., BEING FERTILE AREA, IT IS NOTICED THAT IN A LATER YEAR, LD. CIT(A) ACCE PTED AN AMOUNT OF RS. 30,000/- AS AGRICULTURAL INCOME WHICH THE REVENUE ALSO ACCEPTED. THEREFORE, CREDIT CAN BE GIVEN TO THAT EXTENT. IN VIEW OF THIS, OUT OF THE ADDITION MADE OF RS. 50,000/- BY THE AO AS INCOME FROM OTHER SOURCES, RS 30,000 CAN BE CONSIDERED AS INCOME FROM AGRICUL TURE. IN VIEW OF THIS, ASSESSEE GETS RELIEF OF THE ADDITION MADE OF RS 3,00,000 AS THE UN- EXPLAINED INVESTMENT AND PARTLY UNDER THE AGRICULTU RAL INCOME. AO IS DIRECTED TO MODIFY THE ORDER ACCORDINGLY. GROUNDS ARE PARTLY ALLOWED. 6. IN THE RESULT, THIS APPEAL IS PARTLY ALLOWED. ITA NOS. 1498 & 1499/HYD/2013: 7. THIS IS THE CASE OF SMT. PADMAVATHI, W/O. SHRI K . RAMA KRISHNA RAJU, WHO HAS ALSO MADE AN INVESTMENT OF RS. 3 LAKH S IN THE FIRM AND I.T.A. NOS. 1497, 1498 & 1499/HYD/2013 K. RAMA KRISHNA RAJU & K. PADMAVATHI :- 4 -: AGRICULTURAL INCOME OF RS. 60,000/-. AO, LIKE IN HU SBANDS CASE, DISBELIEVED THE SAME AND CIT(A) CONFIRMED THE SAME. 8. CONSIDERING THE EXPLANATION GIVEN BY ASSESSEE, I T IS NOTICED THAT ASSESSEE DOES NOT OWN ANY AGRICULTURAL LAND BUT HER FATHER USED TO SEND EVERY YEAR SOME AMOUNT WHICH WAS DECLARED AS AGRIC ULTURAL INCOME. WITHOUT OWNING THE LAND, THERE CANNOT BE ANY AGRICU LTURAL INCOME UNLESS ASSESSEE UNDERTAKES ANY AGRICULTURAL OPERATI ONS. SINCE MONEY IS PROVIDED BY THE FAMILY, THAT CANNOT BE CONSIDERED A S AGRICULTURAL INCOME. SINCE THE AMOUNT WAS TAKEN AS SOURCE FOR INVESTMENT IN THE RETURN, TO THAT EXTENT, AO IS CORRECT IN CONSIDERIN G THE AGRICULTURAL INCOME DECLARED AS INCOME FROM OTHER SOURCES. TH EREFORE, TO THE EXTENT OF AGRICULTURAL INCOME ASSESSED BY THE AO, IT IS U PHELD. HOWEVER, AS AMOUNT IS SMALL AND ASSESSEE IS HAVING INCOME FROM HOUSE PROPERTY AND ALSO SUPPORT FROM FAMILY, WHATEVER MAY BE THE S OURCE OF INCOME RECEIVED FROM FAMILY, SINCE THEY ARE BEING RECEIVED REGULARLY FROM SO MANY YEARS FROM THE TIME OF HER MARRIAGE, THE SAME COULD HAVE BEEN INVESTED IN THE FIRM ALONG WITH HUSBAND. CONSIDERI NG THE AMOUNT OF INVESTMENT AND THE INCOME BEING DERIVED BY ASSESSEE IN EARLIER YEARS, CREDIT CAN BE GIVEN TO THE PAST SAVINGS FOR THE INV ESTMENT IN THE FIRM. ACCORDINGLY, THE AMOUNT OF RS. 3 LAKHS IS DIRECTED TO BE DELETED. AO IS DIRECTED TO MODIFY THE ORDER IN AY. 2003-04 ACCORDI NGLY. 9. IN AY. 2004-05, THE ONLY ISSUE IN DISPUTE IS WIT H REFERENCE TO AGRICULTURAL INCOME. SINCE ASSESSEE DOES NOT OWN A NY LAND NOR ANY AGRICULTURAL OPERATIONS BEING CARRIED OUT BY HER, T HE ACTION OF THE AO CANNOT BE FAULTED. IN VIEW OF THIS, NO RELIEF CAN BE GIVEN ON THIS ISSUE. HENCE, ITA NO. 1498/HYD/2013 IS PARTLY ALLOWED AND ITA NO. 1499/HYD/2013 IS DISMISSED. I.T.A. NOS. 1497, 1498 & 1499/HYD/2013 K. RAMA KRISHNA RAJU & K. PADMAVATHI :- 5 -: 10. IN THE RESULT, APPEALS IN ITA NOS. 1497/HYD/201 3 & 1498/HYD/2013 ARE PARTLY ALLOWED AND ITA NO. 1499/H YD/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2015 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMB ER HYDERABAD, DATED 26 TH AUGUST, 2015 TNMM COPY TO : 1. K. RAMA KRISHNA RAJU, NO. 5-3-236, FLAT NO. 20, VENKAT RAO NAGAR COLONY, KUKATPALLY, HYDERABAD. C/O. SHAR MA & SASTRY, CHARTERED ACCOUNTANTS, NO. 5-3-318/1, JEERA , M.G. ROAD, SECUNDERABAD. 2. K. PADMAVATHI, NO. 5-3-236, FLAT NO. 20, VENKAT RAO NAGAR COLONY, KUKATPALLY, HYDERABAD. C/O. SHARMA & SASTR Y, CHARTERED ACCOUNTANTS, NO. 5-3-318/1, JEERA, M.G. R OAD, SECUNDERABAD. 3. INCOME TAX OFFICER, WARD-11(3), I.T. TOWERS, HYD ERABAD. 4. CIT (APPEALS)-18, MUMBAI. 5. CIT(APPEALS)-VI, HYDERABAD. 6. CIT-VI, HYDERABAD. 7. D.R. ITAT, HYDERABAD. 8. GUARD FILE.