P.S.Naidu, (HUF), Hyderabad V. DCIT., Circle-7(1), Hyderabad, Hyderabad

ITA 1576/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87332 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 12-02-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 15-10-2014
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: A V RAGHURAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1576/HYD/2014 ASSESSMENT YEAR: 2000-01 SHRI P.S.NAIDU , (HUF), UPPARAPALLY, HYDERABAD. [PAN: AGIPP2670D] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-7(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V.RAGHU RAM, AR FOR REVENUE : SHRI RAMA KRISHNA BANDI, DR DATE OF HEARING : 12 - 0 2 - 201 5 DATE OF PRONOU NCEMENT : 20 - 0 2 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THE ISSUE IN THIS APPEAL, PREFERRED AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX(APPEALS)-VI HYDERABAD DA TED 16-05-2014, IS AGAINST ADDITION OF RS.11,46,000/- U/S.68 OF THE INCOME TAX ACT (ACT). 2. BRIEFLY STATED, ON A SURVEY CONDUCTED ON 01-12-1 999 IN THE CASE OF M/S.OBAN FINANCIERS, PROPRIETOR SHRI M. NARASIMHULU , ASSESSING OFFICER NOTICED THAT THE SAID FINANCE BUSINESS WAS TAKEN OV ER BY ASSESSEES SHRI P.S.NAIDU (HUF) W.E.F. 01-07-1999 FOR A CONSIDERATI ON OF RS.25,000/-. I.T.A. NO. 1576/HYD/2014 SHRI P.S.NAIDU (HUF) :- 2 -: ACCORDINGLY, PROCEEDINGS U/S.147 INITIATED AND ASSE SSING OFFICER, AFTER CONSIDERING THE OBJECTIONS FROM ASSESSEE, BROUGHT T O TAX AN AMOUNT OF RS.11,46,000/- AS UN-EXPLAINED CREDITS. 3. BEFORE THE LD.CIT(A), ASSESSEE SUBMITTED THAT TH E BUSINESS WHICH WAS SUPPOSED TO BE TAKEN IN HUF CAPACITY FROM SHRI M. NARASIMHULU ON 01-07-1999 HAS NOT BEEN TAKEN OVER AS CERTAIN CONDI TIONS WERE NOT FULFILLED. IT IS ALSO SUBMITTED THAT SHRI M. NARAS IMHULU HAS GIVEN A STATEMENT IN WHICH HE DEPOSED THAT NO BOOKS OF ACCO UNTS WERE MAINTAINED PRIOR TO 01-04-1999 AND ALL THE CUMULATI VE DEPOSITS AS WELL AS FIXED DEPOSITS TOTALLING TO RS.2.27 CRORES AS ON 31-03-1999 HAVE BEEN ENTERED IN THE COMPUTER AND SOME MORE ARE TO B E ENTERED. 4. IT WAS FURTHER SUBMITTED THAT THE DEPARTMENT HAS IMPOUNDED THE RECORDS OF M/S.OBAN FINANCIERS AND ASSESSEE HAS NO CONNECTION WHAT- SO-EVER WITH M/S.OBAN FINANCIERS. IT WAS FURTHER S UBMITTED THAT ASSESSING OFFICER MERELY, BASED ON LETTER ADDRESSED TO RBI, CAME TO A CONCLUSION THAT ASSESSEE IS PROPRIETOR OF THE SAID BUSINESS. IT WAS ALSO SUBMITTED THAT ASSESSEE HAS NOT RECEIVED ANY DEPOSI TS AFTER 01-07-1999. THEREFORE, ADDITION OF RS.11,46,000/- IS NOT CORREC T. IT WAS ALSO CONTENDED THAT ASSESSING OFFICER HAS NOT GIVEN ANY INFORMATION ABOUT THE AMOUNTS CLAIMED AND SINCE ASSESSEE DID NOT HAVE ANY BUSINESS CONNECTION WITH THAT FINANCE BUSINESS, NO ADDITION CAN BE MADE IN HIS HANDS. 5. LD.CIT(A), HOWEVER, CONSIDERING THE FACT THAT AS SESSEE HAD ACQUIRED THE BUSINESS VIDE TERMS OF AGREEMENT DT.30 -06-1999 AND PAID PART AMOUNT OF RS.25,000/- AND FURTHER HAS WRITTEN CORRESPONDENCE WITH RBI AUTHORITIES INDICATING THAT HE HAS TAKEN O VER BUSINESS, CONFIRMED THE ADDITION. HE WAS ALSO OF THE OPINION THAT THE EXISTENCE OF I.T.A. NO. 1576/HYD/2014 SHRI P.S.NAIDU (HUF) :- 3 -: SUNDRY DEBTORS WAS NOT DISPUTED AND IN FACT SAID CR EDITS WERE SHOWN TO HAVE BEEN PART OF UN-SECURED LOANS OF M/S.OBAN FINANCIERS. ACCORDINGLY, HE CONFIRMED THE ADDITION. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE PAPER BOOK. WE ARE NOT IN A POSITION TO APPRECIATE EITHE R THE ORDER OF THE ASSESSING OFFICER OR THE ORDER OF CIT(A). EVEN THO UGH INITIATION OF PROCEEDINGS U/S.147 WERE CONTESTED BEFORE THE LD.CI T(A) NO SUCH CONTENTIONS WERE RAISED BEFORE US. THEREFORE, THE ISSUE OF RE-OPENING IS NOT SUBJECT MATTER OF APPEAL. HOWEVER, AS SEEN FRO M THE ORDER AND ALSO FROM THE ORDER OF THE CO-ORDINATE BENCH IN THE CASE OF SHRI M. NARASIMHULU (HUF) IN ITA NO.456/HYD/2007 DT.30-0 3-2012, IT IS NOTICED THAT ASSESSEE ACTED AS GPA HOLDER FOR THE S AID BUSINESS OF M/S.OBAN FINANCIERS TILL IT WAS ACQUIRED BY ASSESSE E ON 01-07-1999. IN THE ASSESSMENT OF SHRI M. NARASIMHULU FOR AY.1999-2 000 I.E., UPTO 31- 03-1999, ASSESSING OFFICER HAS MADE AN ADDITION OF RS.96,69,000/- WHICH WAS SUBJECT MATTER ON APPEAL BEFORE THE CIT(A ) AND ALSO ITAT. THERE SEEMS TO BE A STATEMENT RECORDED FROM ASSESSE E IN THE REMAND PROCEEDINGS ALSO WHILE EXAMINING VARIOUS CREDITS. W HAT TRANSPIRES FROM THE SAID ORDER IS THAT ASSESSEE IS WELL AWARE OF TH E BUSINESS ACTIVITIES OF M/S.OBAN FINANCIERS BEING ACTIVELY INVOLVED IN DAY TO DAY BUSINESS AS GPA HOLDER. IN VIEW OF THAT, IT CANNOT BE STATED T HAT ASSESSEE HAS NO KNOWLEDGE ABOUT THE BUSINESS. HOWEVER, WE ARE UNAB LE TO UNDERSTAND HOW THE AMOUNT OF RS.11,46,000/- HAS BEEN QUANTIFIE D BY THE ASSESSING OFFICER AS UN-EXPLAINED CREDITS. ASSESSING OFFICER DID NOT STATE IN THE ORDER THE NATURE OF THE CREDITS, FROM WHOM THE AMOU NTS WERE RECEIVED, THE DATE ON WHICH THEY WERE RECEIVED, THE MODE OF R ECEIPT IN ORDER TO EXAMINE WHETHER THE CREDITS WERE RECEIVED DURING TH E YEAR OR DURING THE PERIOD AFTER ASSESSEE ACQUIRED BUSINESS. NEITHER T HE ASSESSING OFFICER NOR THE CIT(A) EXAMINED THIS ASPECT AND AS PER THE ASSESSEES I.T.A. NO. 1576/HYD/2014 SHRI P.S.NAIDU (HUF) :- 4 -: CONTENTIONS, BOOKS OF ACCOUNTS/DOCUMENTS ARE STATED TO HAVE BEEN AVAILABLE WITH THE DEPARTMENT ONLY. SINCE ASSESSEE DID NOT CO-OPERATE WITH THE ASSESSING OFFICER DURING THE ASSESSMENT PR OCEEDINGS AND RAISED THE CONTENTIONS BEFORE THE CIT(A), WE ARE OF THE OP INION THAT THE WHOLE ISSUE REQUIRES RE-EXAMINATION BY THE ASSESSING OFFI CER. ASSESSING OFFICER IS DIRECTED TO EXAMINE THE DOCUMENTS/BOOKS OF ACCOUNTS IF ANY, AVAILABLE WITH THE DEPARTMENT MENTIONING THE AMOUNT S AND PROCEEDINGS FROM WHOM THE SAID CREDITS WERE AVAILABLE AND SEEK ASSESSEES CLARIFICATION AND AFTER GIVING DUE OPPORTUNITY TO A SSESSEE, FINALIZE THE ISSUE AS PER THE FACTS AND LAW. WITH THESE DIR ECTIONS, WE SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND CIT(A) AND RESTO RE THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR FRESH CONSIDERATION. NEED LESS TO SAY THAT ASSESSEE SHOULD BE GIVEN OPPORTUNITY AND ASSESSEE S HOULD ALSO CO- OPERATE WITH THE ASSESSING OFFICER IN EXAMINING THE ISSUES. IN CASE ASSESSEE DOES NOT CO-OPERATE, ASSESSING OFFICER CAN RE-DETERMINE THE INCOMES AS PER THE INFORMATION AVAILABLE AND AS PER THE LAW. 7. WITH THESE OBSERVATIONS, THE APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 20 TH FEBRUARY, 2015. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTA NT MEMBER HYDERABAD, DATED 20 TH FEBRUARY, 2015 TNMM I.T.A. NO. 1576/HYD/2014 SHRI P.S.NAIDU (HUF) :- 5 -: COPY TO : 1. SHRI P.S.NAIDU (HUF), FLAT NO.208, PRAKJYOTHI HILAND APTS., DAIRY FARM CIRCLE, NEAR 212 PILLAR, UPPARAPALLY, HY DERABAD. C/O. SHRI K.VASANTKUMAR, A.V. RAGHU RAM, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD-500 001. 2. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-7(1), HYDERABAD. 3. CIT(A)-VI, HYDERABAD 4. CIT-VI, HYDERABAD 5. D.R. ITAT, HYDERABAD.