Akurati Ramesh, Tedepalligudem V. Income tax Officer, Ward International Taxation, Kakinada

ITA 157/VIZ/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1130 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 19-09-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 147; 148; 263; 143(3); 73

Judgement Text

आयकर अपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./ I.T.A. No.157/Viz/2021 (ननधधारण वर्ा / Assessment Year :2013-14) Sri Akurati Ramesh, Tadepalligudem, Andhra Pradesh-534101. PAN: AWLPM 9543 M Vs. Income Tax Officer, Ward-International Taxation, Kakinada, Andhra Pradesh-533001. (अपीलधथी/ Appellant) (प्रत्यथी/ Respondent) अपीलधथी की ओर से/ Appellant by : Sri C. Subrahmanyam प्रत्यधथी की ओर से / Respondent by : Sri MN Murthy Naik, CIT-DR सुनवधई की तधरीख / Date of Hearing : 26/04/2022 घोर्णध की तधरीख/Date of Pronouncement : 26/05/2022 O R D E R PER S. BALAKRISHNAN, Accountant Member : This appeal filed by the assessee against the order of the Ld. CIT(IT & TP), Hyderabad passed U/s. 263 of the Act vide F.No.CIT(IT & TP)/263/Revision/2019-20, dated 19/02/2020 for the AY 2013-14. 2 2. At the outset, there is a delay of 511 days in filing the appeal before the Tribunal. In this regard, the Ld. AR bought our attention to the affidavit filed by the assessee and submitted that since the period of delay occurred in the instant case is covered by the decision of the Hon’ble Supreme Court in W.P. No. 3/2020, dated 8/3/2021 the delay may be condoned. We have considered positively the submissions of the assessee in respect of the delay and therefore, the delay of 511 days is hereby condoned and we proceed to adjudicate the appeal on merits. 3. The brief facts of the case are that the assessee a Non- Resident filed his return of income for the AY 2013-14 admitting a total income of Rs. 2,39,520/-. Later the assessment was reopened U/s. 147 and a notice U/s. 148 was issued calling for certain details. The assessee’s authorized representative submitted required details and the Ld. AO completed the assessment by accepting the income returned. 4. Subsequently, the Ld. CIT (IT & TP) invoked the provisions of section 263 considering the order of the Ld. AO as erroneous and prejudicial to the interests of the Revenue and issued a show cause notice to the assessee calling for details regarding 3 substantial deposits both in cash and by transfers in assessee’s HDFC Bank Account during the FY 2012-13. The assessee’s representative submitted the reply to the show cause notice regarding the cash deposits and transfers into the assessee’s bank account. The Ld. CIT after considering the explanation of the assessee’s representative directed the AO to make a fresh assessment by investigating and verifying the source for Rs. 45,15,000/- claimed to have been received from Sri Venigalla Srinivas. 5. Aggrieved by the order of the Ld. CIT (IT & TP), the assessee is in appeal before us by raising the following grounds: “1. That under the f acts and circumstances of the case, the orders passed under the provisions of section 263 of the IT Act is contrary to the provisions of law and f acts of the case. 2. The Ld. CIT (IT & TP) f ailed to appreciate the f act that the issue of cash deposits in bank account, was an issue examined by the AO in the assessment proceedings carried out U/s. 147 r.w.s 143(3) of the Act, hence, the subject issue cannot be a matter of review U/s. 263 of the Act by terming the AO order as erroneous causing prejudice to the revenue. 3. The Ld. CIT ought to have known that the proceedings U/s. 263 of the Act can be initiated only when the AO order is erroneous but also prejudicial to the interest of the revenue, both the 4 conditions shall exist, however, in the present case AO order is not erroneous inasmuch as the issue considered for review U/s. 263 of IT Act has been examined in the assessment proceedings therefore, it is not prejudicial to the interest of the Revenue. 4. The Ld. CIT finding, that AO completed the assessment without verification of the subject cash deposits in bank, is erroneous, when in reality AO made enquiries with regards to cash deposits in bank in the proceedings carried out u/s 143(3) rws 147 of the IT Act. 5. For these and other reasons that are to be urged at the time of hearing of the appeal the appellant prays that the order passed by CIT is erroneous both on f act and as well as in law therefore the same needs to be set aside in the interest of justice.” 6. The Ld. AR stated that the assessee during the year 2007, transferred to his friend Mr Venigalla Srinivas an amount of Rs. 1,07,46,490 through banking channels, for the purpose of investments in India. Mr Venigalla Srinivas invested Rs 46,25,000 in purchasing of immovable property at Vijayawada. The Ld. AR explained that the remaining balance amount of Rs. 61,21,490/- was with Mr Venigalla Srinivas. The Ld. AR claimed that the partnership with his friend Mr. Venigalla Srinivas was not going well and hence the assessee requested his friend to return the balance money to the assessee. Mr Venigalla Srinivas during the year 2012-13 deposited Rs 45,15,000 in to the 5 assessee’s bank account. The Ld. AR stated that the assessee also transferred the immovable property purchased for Rs 46,25,000/- (as above) for a consideration of Rs. 73 lakhs during the AY 2013-14 against the market value of Rs. 78 lakhs as per the SRO records. The Ld. AR also relied on various judicial pronouncements as listed in his paper book. The Ld. AR also forcibly argued that non-mentioning of the enquiry on the subject matter by the AO would not lead to the presumption that the Ld. AO had not applied his mind requiring the interference of the Ld. CIT by issuing notice U/s. 263. 7. Per contra, the Ld. DR referred to para 3 of the order U/s. 263 wherein the CIT has confirmed that the assessee did not provide any evidence or details of confirmation of the amount to explain the transactions between the assessee and Mr. V. Srinivas with respect to the mode of payment, receipt and to whose account the amount was credited etc. The Ld. DR supported the order of the Ld. CIT. 8. We have heard both the sides and perused the material available on record and orders of the authorities below. We find from the order of the AO that there is no mention about the 6 enquiries made w.r.t cash deposits in the assessee’s account which was to be investigated by the AO. In the absence of the same, it is a general presumption that the AO has not looked into the matter. We also noted from the submissions made by the Ld. AR that the amounts were deposited by the assessee’s friend by way of cash deposit in to assessee bank account. The Ld. AR claimed that assessee’s father Mr. A. Anjaneyulu (GPA Holder), deposited part of the consideration received on sale of property made by the assessee during the year. It is also noted that Sri Venigalla Srinivas had deposited amounts into the account of the assessee which was sent to him during the year 2007. The contention of the Ld AR that these deposits were out of the amounts sent in the year 2007, by the assessee to his friend Sri Venigalla Srinivas could not be accepted in the absence of any material evidence before us. The cases relied on by the Ld. AR is not relevant because of the fact it has been held that “the enquiry was made but the AO has not mentioned or not discussed thereof in the assessment order could not lead to assumption that the AO did not apply his mind”. There is no evidence to the fact that the AO has made enquiry in the instant case, but has accepted the version of the assessee without 7 making any enquiry or without mentioning the same in the assessment order. The Ld AR also failed to demonstrate why cash was deposited into assessee account for the amounts received by the assessee friend through banking channels. Since the AO erred in In view of the above, we find that Ld CIT (IT & TP) has rightly exercised his powers u/s 263 of the Act, and hence we find no infirmity in the order of the Ld. CIT (IT & TP) and uphold the order of the Ld. CIT (IT & TP). 9. In the result, appeal of the assessee is dismissed. Pronounced in the open Court on the 26 th May, 2022. Sd/- Sd/- (द ु व्वूरु आर.एल रेड्डी) (एस बालाकृ ष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याधयकसदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Dated : 26.05.2022 OKK - SPS 8 आदेश की प्रनतनलनप अग्रेनर्त/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee – Sri Akurati Ramesh, D.No. 3-19-11, Bhupal Nagar, Tadepalligudem, Andhra Pradesh – 534101. 2. रधजस्व/The Revenue – Income Tax Officer, Ward-International Taxation, 3 rd Floor, Deepthi Towers Main Road, Kakinada, Andhra Pradesh-533001. 3. The Principal Commissioner of Income Tax, 4. आयकर आयुक्त (अपील)/ The Commissioner of Income Tax (IT & TP), Hyderabad. 5. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam