Goomidelli Srinivas, Hyderabad V. ITO, Ward-(2), Hyderabad

ITA 1534/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74734 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 20-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Additional evidence; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1534/HYD/13 : ASSESSMENT YEAR 2009 - 10 SHRI GOOMIDELLI SRINIVAS HYDERABAD (PAN AC APG 1348 R ) V/S. INCOME TAX OFFICER WARD 1(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.MURALIMOHANA RAO RESPONDENT BY : SMT. K.HARITHA DR DATE OF HEARING 20.3.2014 DATE OF PRONOUNCEMENT 20.3.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD DATED 8.10.2013 FOR THE ASSESSMENT YEAR 2009 - 10. 2. A S MANY AS TEN GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THIS APPEAL. WHILE GROUND NOS.1 AND 10 ARE GENERAL AND DO NOT CALL FOR INDEPENDENT ADJU D I C ATION, GROUND NO.9 REL A TES TO AN ADDITION OF RS.1,11,336 MADE BY THE ASSESSING OFFICER, BY WAY OF DIS ALLOWANCE O F INTEREST , WHICH, AT THE TIM E OF HEARING, WA S NO T PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE . HENCE, TH E SE THREE GROUNDS, VIZ. G ROUNDS NO.1, 9 AND 10 ARE REJECTED. 3. THE OTHER GROUNDS OF THE ASSESSEE, VIZ. GROUNDS NO.2 TO 8 RELATE TO ADDITION OF R S .30,16,500 MADE BY THE ASSESSING OFFICER, TREATING THE DEPOSITS MADE INTO THE ASSESSEES BANK ACCOUNT AGGREGATING TO THAT A M OUNT, AS UN E XPLAIN E D INVESTMENT OF THE ASSESSEE UNDER S.69 OF THE ACT. DURIN G THE COU R SE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED FOR THE ITA NO. 1534/ HYD/20 13 SHRI GOOMIDELLI SRINIVAS HYDERABAD 2 EXPLANATION OF THE ASSESSEE FOR CASH DEPOSITS ON NINE OCCASIONS, RANGING FROM R S .39,000 TO RS.11,00,000, AGGREGATING TO RS.3 0 ,16,500 / - MADE ON VARIOUS DATES FROM 21.4.2008 TO 29.10.2008. ASSESSEE EXPLAINED THOSE CASH D EPOSITS AS UNDER - :I WOULD LIKE TO SUBMIT THAT I AND MY BROTHERS OWN ANCESTRAL PROPERTIES(JOIN T ) AT RAM NIVAS, MUMBA DEVI ROAD AND PRINCESS STREET MUMBAI F R OM WHICH, WE ARE DERIVING RENTAL INCOME AND WERE DECLARED IN THE R E SPECT ASSESSMENT YEARS. I FURTHER TO SUBMIT THAT DURING THE FY, THE CASH DEPOSITS IN THE ORIENTAL BANK OF COMM E RCE, S.D. ROAD BRANCH, SECUN D ERABAD H A VING ACCOUNT NO.10412010085780 ARE REPAYABLE RENTAL DEPOSITS (PAGADI ) FROM THE TENANTS AT THE ABOVE SAID PROPERTIES AT MUMBAI. THEREAFTER THE ASSESSING OFFICER CALLED FOR FURTHER DETAILS ON TH E ISSUE OF CASH DEPO S I T S. AS NO REPLY WAS FURNISHED, THE ASSESSING OFFICER ISSUED SUMMONS UN D ER S.131 AND RECORDED THE STATEMENT OF THE ASSESSEE ON 21.10.2011, WHEREIN THE ASSESSEE WAS ASKED TO EXPLAIN THE SOU R CES FOR THE CASH DEPOSITS . AFTER ELABORATE CONSIDERATION OF THE EXPLANATION OF THE ASSESSEE IN THAT BEHALF, THE ASSESSING OFFICER MADE THE FOLLOWING OBSERVATIONS - ( A ) THE ASSESS EE WAS EVASIVE AND RELUCTANT TO STATE THE FACTS RELATING TO THE SOU R CES OF CASH DEPOSITS; ( B ) THE ASSESSEE DOES NO T E EVEN KNOW HOW MANY PO R TION S ARE THERE IN THE PROPERTIES OWNED BY HIM AT MUMBAI D EVI ROAD, PRINCESS STREET MUMBAI AND IN PROPERTY AT GEN E RAL BAZ AAR, S E CUN D ERABAD. ( C ) ASSESSEE C OULD NOT STATE AT LEAST FEW NAMES FO THE TENANTS FROM WHOM THE RENTAL DEPOSITS WERE CLAIM E D TO HAVE BEEN RECEIVED, THOUGH SOME O F THE TENANTS WERE SAID TO HAVE BEEN R E SIDING FOR MORE THAN 30 YEARS ( D ) THE ASSESSEE DID NOT ISSUE ANY RECEIPT TO ANY OF THE TENANTS FOR HAVING RECEIVED MONEY ( E ) NO REN T AL AGREEMENTS WERE ENTERED WITH ANY OF THE TENANTS. ( F ) THE GROSS RENTAL INCOME SHOWN IN THE RETURN FOR MUMBAI PROPERTY WAS RS.2,705 AND FORM HYDERABAD PROPERTY WAS RS.10,725 COMPARED TO ITA NO. 1534/ HYD/20 13 SHRI GOOMIDELLI SRINIVAS HYDERABAD 3 THE R ENT AL INCOME OFFERED TO TAX BY THE ASSESSEE, THE RENTAL DEPOSITS WERE DISPROPORTIONATELY HIGH. ( G ) CON S I D ERIN G THAT THE PROPERTIES A R E LOCATED AT MUMBAI , R ENTAL INCOME DISCLOSED IS S MALL, THE POSSIBILITY OF RECEIVING THE RENT IN THE FORM OF ADVANCE OR DEPOSIT CANNOT B E RULED OUT. ( H ) THE ASSESSEE WAS REQUESTED TO FURNISH THE VOUCHERS AND BIL L S FOR TH E REPAIRS CLAIMED TO HAVE BEEN CARRIED OUT FOR THE MUMBAI PROPERTY WHICH WAS NO T SUBMI T TED. ( I ) NO SUCH EXPENDITURE IS SHOWN TO HA VE BEEN IN C UR R ED IN THE RECEIPTS AND PAYME NTS ACCOUNT FILED. FOR THE FORE G OING REASONS, OBSERVING THAT THE SOU R CES FOR DEPOSIT OF CASH OF R S .30,16,500 WERE NO T EXPLAINED; AND THAT IDENTITY, CREDITWORTHINESS O F THE PERSON S CON C ERNED AS WELL AS GENUINENESS O F TRANSACTION S WAS NO T ESTABLISHED BY THE ASSESSEE, THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION UNDER S.69 OF THE ACT. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE, AFTER AVAILING SEVERAL OPPORTUNITIES, ULTIMATELY SUBMITTED THE ADDITIONAL EVIDENCE, WHICH REVEALED - ( A ) D E TAIL S O F CASH RECEIVED FROM THE TENANTS WITH THE FOLLOWIN G HEADS: (I) FLOOR (II) SHOP/OFFICE/R E SI NO. (III) AREA (IV) SHOP/OFFICE/RESI NAME (V) AMOUNT (VI) TOTAL (VII) DATE (VIII) AMOUNT ITA NO. 1534/ HYD/20 13 SHRI GOOMIDELLI SRINIVAS HYDERABAD 4 ( B ) COPY OF ACCOU N T MAINTAINED IN ORIENTAL BANK OF COMME R CE FOR THE PERIOD FROM 1.4.2008 TO 31.3.2009. SINCE THE ABOVE INFORMATION WAS NOT SUBMITTED THE ASSESSING OFFICER, THE SAME WAS FORWARDED TO THE ASSESSING OFFICER UNDER RULE 46A FOR HIS COMMENTS ON THE ADMISSIBILITY OF EVIDENCE AS WELL AS ON THE M E RITS OF THE CASE. THE ASSESSING OFFICER IN RESPONSE VIDE HIS LETTER 29.7.2013. THE ASSESSING OFFICER AS WELL AS THE ADDITIONAL CIT, RANGE - I, HYDERABAD STRONGLY OPPOSED THE ADMISSION OF THE SAID ADDITIONAL EVIDENCE, ON THE GROUND THAT THE SAME WERE NOT FILED BY TH E ASSESSEE , NOTWITHSTANDING SEVERAL OPPORTUNITIES AFFORDED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. 5. THE CIT(A), CONSIDERING THE NON - COMPLIANCE OF THE ASSESSEE TO SEVERAL NOTICES ISSUED BY THE ASSESSING OFFICER DECLINED TO ENTERTAIN T HE ADDITIONAL EVIDENCE SOUGHT TO BE FILED BEFORE HER. NONETHELESS, TAKING COGNIZANCE OF THE ADDITIONAL EVIDENCE PROCEEDED TO CONSIDER THE ISSUE ON MERITS AND ULTIMATELY UPHELD THE VIEW TAKEN BY THE ASSESSING OFFICER, REJECTING THE GROUNDS OF THE ASSESSEE, CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER S.69A OF THE ACT. 6. WE HEARD BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS THE CASE OF THE ASSESSEE, THAT THE ASSESSEE WAS PREVENTED BY GENUINE AND REASONABLE CAUSE FROM FURNISHING THE ADDITIONAL EVIDENCE IN QUESTION BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, OR AT THE EARLIER STAGES OF THE APPELLATE PROCEEDINGS , AND AS SUCH THE CIT(A), IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE OUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDENCE . WE AGREE WITH THIS CONTENTION OF THE ASSESSEE. IN ANY EVENT, IN OUR CONSIDERED OPINION, THE CIT(A), HAVING NOT ADMITTED THE ADDITIONAL EVIDENCE FOLLOWING THE COMMENTS OF THE ASSESSING OFFICER AS WELL AS ADDL. CIT IN THEIR LETTERS DATED 29.7.2013, WAS NOT JUSTIFIED IN ADJUDICATING EVEN ON THE MERITS , SIMPLY ON THE GROUND THAT EVEN IF HIGHER APPELLATE AUTHORITY HOLDS THE ITA NO. 1534/ HYD/20 13 SHRI GOOMIDELLI SRINIVAS HYDERABAD 5 ADDITIONAL EVIDENCE AS ADMISSIBLE, THE MATTER NEED NOT BE RESTORED FOR FRESH CONSIDERATION . BY SU CH AN OBSERVATION AND ATTEMPT TO EXPRESS OPINION ON MERITS TAKING COGNIZANCE OF THE ADDITIONAL EVIDENCE, THE CIT(A) TENDS TO PREJUDGE/PREEMPT THE OPTIONS THAT ARE STATUTORILY AVAILABLE B EFORE THE HIGHER APPELLATE AUTHORITY . SUCH AN ATTEMPT ALSO TENDS TO UN DULY INFLUENCE THE MIND OF THE APPELLATE AUTHORITY AND THE ASSESSING OFFICER/CIT(A) TO WHOM THE MATTER MAY BE RESTORED BY SUCH APPELLATE AUTHORITY, FOR FRESH CONSIDERATION IN THE LIGHT OF SUCH EVIDENCE, WHICH IS NOT PERMISSIBLE IN LAW. 7. CON S IDERIN G TOTALITY OF FACTS AND CIRCUMSTAN C ES OF THE CA S E AND IN THE INTERESTS OF JU S TICE, WE SET ASIDE THE IMPUGNED ORDER O F TH E CIT(A) , AND RESTORE THE MATTER TO THE FILE O F THE ASSESSING OFFICER, WITH A DIRECTION TO REDECIDE THE ISSUE IN DISPUTE AFRESH, IN THE LI GHT OF THE ADDITIONAL EVIDENCE SOUGHT TO BE FILED BY THE ASSESSEE BEFORE THE CIT(A). THE ASSESSING OFFICER SHALL AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, AND DISPOSE OF THE MATTER AFRESH IN ACCORDANCE WITH LAW, AFTER DUE CONSIDERATION OF ALL THE RELEVANT ASPECTS OF THE MATTER, BY PASSING A SPEAKING ORDER. THE ASSESSEE IS AT LIBERTY TO FILE ANY FURTHER EVIDENCE AS IT MAY DEEM FIT, TO SUBSTANTIATE HIS CLAIM WITH REGARD TO THE CASH DEPOSITS MADE INTO THE BANK ACCOUNT, WHICH LED TO THE IMPUGN ED ADDITION UNDER S.69 OF THE ACT. ASSESSEE IS HOWEVER, DIRECTED TO COOPERATE AND COMPLY WITH THE NOTICES THAT MAY BE ISSUED BY THE ASSESSING OFFICER, AND ENABLE EARLY DISPOSAL OF THE MATTER. ASSESSEES GROUNDS ON THIS ISSUE ARE ALLOWED FOR STATISTICAL P URPOSES. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20.3.2014 SD/ - SD/ - (CHANDRA POOJARI ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 20 TH MARCH, 2014 ITA NO. 1534/ HYD/20 13 SHRI GOOMIDELLI SRINIVAS HYDERABAD 6 COPY FORWARDED TO: 1. SHRI GOOMIDELLI SRINIVAS, SHRI GOOMIDELLI SRINIVAS HYDERABAD HYDERABAD 2 . INCOME TAX OFFICER, WARDX - 1(2) , HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD 4. COMMISSIONER OF INCOME - TAX I HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S