Chenna Reddy Sesha Reddy, Hyderabad V. ITO., Ward-8(2), Hyderabad

ITA 1535/HYD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6565 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KURMI NAIDU
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Additional evidence
• Section: 143(3); 154

Judgement Text

ITA NO 1535 OF 2014 CHENNA REDDY SESHA REDDY HYDERA BAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI P.MADHAVI DEVI, JUDICIAL MEMBER & SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1535/HYD/2014 (ASSESSMENT YEAR: 3009-10) SHRI CHENNA REDDY SESHA REDDY HYDERABAD PAN: ADZPC 9203 F VS. INCOME TAX OFFICER WARD 8(2) IT TOWERS HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. SIVA KUMAR FOR REVENUE : SHRI KURMI NAIDU, DR DATE OF HEARING : 23.03.2016 DATE OF PRONOUNCEMENT : 13 .0 5 . 2016 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10. IN THIS APPEAL, THOUGH THE ASSESSEE HAS RAISED TEN GROUNDS OF APPEAL, AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE GROUNDS 7 & 8 DO NOT SURVIVE AS THE CIT (A) HAD GRANTED RELIEF TO THE ASSESSEE AND THE AO HAS A LSO GIVEN EFFECT TO THE ORDER OF THE CIT (A) WHICH IS PLACED AT PAGE 16 OF THE PAPER BOOK. IT WAS ALSO SUBMITTED THAT THE RELIEF C LAIMED UNDER GROUND NO.9 WAS GRANTED BY THE AO IN THE ORDER U/S 154 OF THE ACT. THE COPY OF THE ORDER OF THE AO U/S 154 IS PLA CED AT PAGES 17 & 18 OF THE PAPER BOOK. IN VIEW OF THE SAME, GRO UNDS 7 TO 9 ARE REJECTED. 2. GROUNDS 1 AND 10 ARE GENERAL IN NATURE AND HENCE NEED NO ADJUDICATION. GROUNDS NO. 2 TO 4 ARE AGAINST THE OR DER OF THE CIT (A) IN CONFIRMING THE ADDITION OF RS.4,60,000 BEING THE AMOUNT OBTAINED BY THE ASSESSEE FROM SHRI P. SIVA KUMAR RE DDY AS AN UNEXPLAINED LOAN. GROUND NO.5 IS AGAINST THE COFIRM ATION OF ITA NO 1535 OF 2014 CHENNA REDDY SESHA REDDY HYDERA BAD. PAGE 2 OF 4 ADDITION BY THE CIT(A) OF RS.5,00,000 BEING THE AMO UNT OBTAINED BY THE ASSESSEE FROM SHRI C. SRINIVASULU REDDY AS U NEXPLAINED LOAN. 3. BRIEF FACTS RELATING TO THESE TWO ADDITIONS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A CIVIL CONTRACTOR. H E FILED HIS RETURN OF INCOME FOR THE A.Y 2009-10 ON 23.12.2009 ADMITTING A TOTAL INCOME OF RS.1,52,870 AND THE AGRICULTURAL IN COME OF RS.80,000. THE CASE WAS SELECTED FOR SCRUTINY BY CA SS ON AST AND WAS CONVERTED INTO SCRUTINY BY ISSUING A NOTICE U/S 143(2) ON 19.8.2010. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, AO ISSUED NOTICES TO THE ASSESSEE ASKING T HE ASSESSEE TO EXPLAIN THE CREDITS INTO ASSESSEES BANK A/C. AS RE GARDS THE LOAN RECEIVED BY THE ASSESSEE FROM THE TWO PARTIES (SHRI P. SIVA KUMAR REDDY AND SHRI C. SRINIVASULU REDDY), ASSESSEE EXPL AINED THAT THE LOAN FROM SHRI P. SIVA KUMAR REDDY OF KOTHUR VI LLAGE OF NELLORE DISTRICT WAS RECEIVED VIDE CHEQUE NO.074950 ON 23.03.2009 AND A CONFIRMATION LETTER FROM THE SAID LOAN CREDITOR WAS SUBMITED. AS REGARDS RS.5.00 LAKHS LOAN FROM SH RI C. SRINIVASULU REDDY OF MADARAJU GUDUR VILLAGE OF NELL ORE DISTRICT, IT WAS STATED THAT THE SAME WAS RECEIVED VIDE CHEQU E NO.616641 ON 23.02.2011 AND CONFIRMATION LETTER FROM THE SAID LOAN CREDITOR WAS ALSO SUBMITTED. AO, HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE ON THE GROUND THAT SHRI SIVA KUMAR REDDY HAS A FAMILY TO SUPPORT AND WAS NOT IN A POSITION TO ADVA NCE SUCH A HUGE AMOUNT AND THEREFORE, ASSESSEE HAS NOT ESTABLI SHED HIS CREDITWORTHINESS. SIMILARLY AS REGARDS SHRI C. SRIN IVASULU REDDY ALSO, AO OBSERVED THAT HE IS A BEDRIDDEN PERSON AND COULD NOT HAVE PERFORMED AGRICULTURAL OPERATIONS IN HIS 7 ACR ES OF LAND AND THEREFORE, HIS CREDITWORTHINESS IS ALSO NOT PROVED. THE ADDITIONS MADE BY THE AO HAVE BEEN CONFIRMED BY THE CIT (A) A ND AGAINST SUCH CONFIRMATION, THE ASSESSEE IS IN APPEAL BEFORE US. THE ITA NO 1535 OF 2014 CHENNA REDDY SESHA REDDY HYDERA BAD. PAGE 3 OF 4 ASSESSEE HAS FILED AN APPLICATION SEEKING ADMISSION OF ADDITIONAL EVIDENCE U/S 29 OF ITAT RULES, 1963. IT IS STATED T HEREIN THAT THE ADDITION OF RS.4,60,000 WAS MADE BY THE AO BY DISBE LIEVING THE CREDITWORTHINESS OF SHRI P.SIVA KUMAR REDDY AND THA T THE ASSESSEE HAS FILED AN APPLICATION DATED 8.7.2014 BE FORE THE CIT (A) ENCLOSING THERETO (1) A LETTER FROM SHRI P. SIV A KUMAR REDDY CONFIRMING THAT HE HAD LOANED AN AMOUNT OF RS.4,60, 000 TO THE ASSESSEE (2) COPY OF THE PATTADAR PASSBOOK SHOWING OWNERSHIP OF 22.29 ACRES OF AGRICULTURAL LAND BY SHRI P. SIVA KU MAR REDDY AND (3) COPY OF THE PATTADAR PASSBOOK SHOWING OWNER SHIP OF 8.94 ACRES OF AGRICULTURAL LAND BY SMT. P. PADMAJA, WIFE OF SRI P. SIVA KUMAR REDDY. HE SUBMITTED THAT THE LEARNED CIT (A) SUMMARILY REJECTED THE SAID EVIDENCE WITHOUT VERIFYING THE SA ME. ACCORDING TO HIM, THE EVIDENCE FILED BEFORE THE CIT (A) IS VI TAL AND HAS A BEARING ON THE CREDITWORTHINESS OF SHRI P.SIVA KUMA R REDDY AND OUGHT TO HAVE BEEN TAKEN INTO CONSIDERATION BY THE CIT (A). HE THEREFORE, PRAYED THAT THE SAME MAY BE ADMITTED BY THIS TRIBUNAL AND REMANDED TO THE FILE OF THE AO FOR VER IFICATION. 4. SIMILARLY AS REGARDS THE LOAN OBTAINED FROM SHRI C. SRINIVASULU REDDY, THE LEARNED COUNSEL FOR THE ASSE SSEE PRAYED THAT THIS ISSUE MAY ALSO BE REMANDED TO THE AO FOR RECONSIDERATION. 5. THE LEARNED DR OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE AND ALSO RELIED UPON THE ORDERS OF THE AUT HORITIES BELOW AND PRAYED THAT THEY MAY BE CONFIRMED. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THOUGH, THE ASSESSEE HAS PLEAD ED BEFORE THE AO THAT HE HAS TAKEN THE LOANS AS ADVANCE BY WAY OF CHEQUES, THE AO AND THE CIT (A) HAVE HELD THAT THE CHEQUE NU MBERS GIVEN ITA NO 1535 OF 2014 CHENNA REDDY SESHA REDDY HYDERA BAD. PAGE 4 OF 4 BY THE ASSESSEE ARE INCORRECT. IT IS FOR THIS REASO N THAT THE AO CAME TO THE CONCLUSION THAT THE CONFIRMATION LETTER S CANNOT BE ACCEPTED AND IT IS AFTER VERIFYING THE DETAILS FILE D BY THE ASSESSEE THAT THE AO HAS COME TO THE CONCLUSION THAT THE CRE DITORS DID NOT HAVE THE CREDITWORTHINESS TO ADVANCE THE AMOUNT TO THE ASSESSEE. HOWEVER, BEFORE THE CIT (A) THE ASSESSEE HAS FILED EVIDENCE TO PROVE THE CREDITWORTHINESS OF SHRI P. S IVA KUMAR REDDY WHICH HAS BEEN BRUSHED ASIDE BY THE CIT (A) S UMMARILY. FURTHER, WE ALSO FIND FROM THE RECORDS THAT THOUGH SHRI C. SRINIVASULU REDDY IS A BEDRIDDEN PERSON, HE IS THE THE OWNER OF 22.29 ACRES OF AGRICULTURAL LAND AND IS DERIVING AG RICULTURAL INCOME. THESE FACTORS NEED PROPER APPRECIATION BY T HE AUTHORITIES BELOW. THEREFORE, IN OUR OPINION, THE E VIDENCE FILED BY THE ASSESSEE NEED VERIFICATION BY THE AO. IN VIEW O F THE SAME, WE ARE INCLINED TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND REMAND BOTH THE ISSUES TO THE FILE OF THE AO FO R DENOVO CONSIDERATION IN ACCORDANCE WITH THE LAW. 7. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MAY, 2016. S D/ - S D/ - ( B. RAMAKOTAIAH ) ( P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH MAY, 2016. VNODAN/SPS COPY TO: 1. SHRI CHENNA REDDY SESHA REDDY, FLAT 401, NAGASWASTI K LEGEND APARTMENTS, SHIRIDI SAI NAGAR, MANIKONDA, HYDERABAD 500089. 2. INCOME TAX OFFICER, WARD 8(2) I.T. TOWERS, AC GUARD S, HYDERABAD 3. CIT(A) III HYDERABAD 4. CIT II HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER