Bandla Seshagiri , Rajamahendravaram V. The Income Tax Officer, Ward-2(3), , Rajamahendravaram

ITA 160/VIZ/2019

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 2247 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 08-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Section: 142(1); 201; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T. A.NO. 159 & 160 /VIZ/201 9 ( / A SSESSMENT Y EAR : 2007 - 08 AND 20 1 0 - 1 1 ) BANDLA SESHAGIRI D.NO.3 - 706, RAMAKRISHNA NAGAR HUKUMPETA RAJAMAHENDRAVARAM [ PAN : ADAPB1697F ] VS. INCOME TAX OFFICER WARD - 2(3) RAJAMAHENDRAVARAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI, AR / RESPONDENT BY : S HRI B.RAMA KRISHNA , DR / DATE OF HEARING : 13 . 1 1 . 201 9 / DATE OF PRONOUNCEMENT : 20 . 1 1 . 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : TH ESE APPEAL S ARE FILED BY THE ASSESSEE AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS ) [CIT(A)], RAJAMAHENDRAVARAM IN I.T.A. NO. 10143 & 10145/2015 - 16/CIT(A)/RJY DATED 25 .0 2 .201 9 FOR THE ASSESSMENT YEAR (A.Y.) 2007 - 08 AND 20 10 - 11. SINCE THE ISSUES RAISED IN 2 I.T.A. NO . 159 & 160 /VIZ/201 9 , A.Y. 2007 - 08 AND 20 1 0 - 1 1 BANDLA SESHAGIRI, RAJAMAHENDRAVARAM TH ESE APPEALS ARE COMMON, THESE APPEALS ARE CLUBBED, HEARD TOGETHER AND A COMMON ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AS UNDER. ITA/159/VIZ/2019 , A.Y. - 2007 - 08 2. FOR THE A.Y.2007 - 08 ALL THE GROUNDS OF APPEALS ARE RELATED TO THE ESTIMATION OF P ROFIT @12.5% ON SALE PLOTS BY THE ASSESSING OFFICER (AO) WHICH WAS CONFIRMED BY THE LD.CIT(A). THE DEPARTMENT WAS IN POSSESSION OF INFORMATION WITH REGARD TO INVESTMENT OF RS.2,32,48,875/ - FOR PURCHASE OF 11.92 ACRES OF LAND AT CHIMALAPALLI VILLAGE, VISAK HAPATNAM DIST BY THE ASSESSEE , DURING THE F.Y.2006 - 07 . THE SAID LAND WAS SOLD AFTER CONVERSION OF THE LAND INTO PLOTS. SINCE THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR THE A.Y.2007 - 08, THE AO HA D ISSUED THE NOTICE U/S 148 AND THERE WAS NO RESPO NSE FROM THE ASSESSEE . H ENCE THE AO ISSUED NOTICE U/S 142(1) OF THE ACT CALLING FOR THE DETAILS. IN RESPONSE TO THE NOTICE ISSUED, THE ASSESSEE APPEARED BEFORE THE AO AND STATED THAT THE TRANSACTION IN QUESTION WAS RELATED TO THE M/S SREE TOWNSHIP, VISAKH APATNAM AND STATED THAT THE TRANSACTIONS WERE ADMITTED IN THE HANDS OF M/S SREE TOWNSHIP AND PRODUCED COPY OF ACKNOWLEDGEMENT HAVING FILED THE RETURN OF INCOME ON 09 . 03 . 2015. THE ASSESSEE STATED HE IS A PARTNER IN THE FIRM ALONG WITH ANOTHER PARTNER SRI KILANI RAVI PRASAD. THE ASSESSEE EXPLAINED THE SOURCE FOR PURCHASE OF LAND AS WITHDRAWAL OF FUNDS TO THE EXTENT OF 51,50,000/ - 3 I.T.A. NO . 159 & 160 /VIZ/201 9 , A.Y. 2007 - 08 AND 20 1 0 - 1 1 BANDLA SESHAGIRI, RAJAMAHENDRAVARAM FROM PUN JAB NATIONAL BANK, RAJAHMUNDRY FROM THE ACCOUNT OF SHRI K.SRINIVASA RAO, BROTHER - IN - LAW OF THE ASSESSEE. THE ASSESSEE ALSO HAPPENS TO BE THE AUTHORIZED SIGNATORY OF THE ACCOUNT OF SHRI K.SRINIVASA RAO. HOWEVER, THE ASSESSEE FAILED TO PRODUCE THE COPY OF PARTNERSHIP DEED AND THE EVIDENCES IN SUPPORT OF SOURCE S FOR PURCHASE OF LAND TO THE EXTENT OF 11.92 ACRES AND ADMISSION OF INCOME FOR SUBSEQUENT SALE OF LANDS AFTER CONVERTING INTO PLOTS. THE ASSESSEE ALSO FAILED TO PRODUCE THE BOOKS OF ACCOUNTS AND COPY OF THE RETURN OF INCOME FILED BY HIM. THE ASSESSEE A LSO FAILED TO FURNISH CONFIRMATION FROM SHRI K.SRINIVASA RAO FROM WHOSE ACCOUNT THE AMOUNTS WERE DRAWN. THEREFORE, THE AO DID NOT BELIEVE THE ASSESSEES CONTENTION THAT THE TRANSACTIONS WERE PERTAINING TO M/S SREE TOWNSHIP . THE AO ALSO DID NOT BELIEVE THAT THE ASSESSEE IS A PARTNER IN THE FIRM. SINCE THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS AND ANY OTHER INFORMATION WITH REGARD TO SALE OF LAND, THE AO ESTIMATED THE INCOME @12.5% ON THE COST OF PURCHASE OF LAND OF RS.2,32,48,875/ - AND ACCORDINGLY COM PUTED THE INCOME OF RS. 29,06,110/ - . 3. AGGRIEVED BY THE ORDER OF THE AO, T HE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) DISMISSED THE APPEAL WITHOUT GOING INTO THE MERITS AND A GAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL. 4 I.T.A. NO . 159 & 160 /VIZ/201 9 , A.Y. 2007 - 08 AND 20 1 0 - 1 1 BANDLA SESHAGIRI, RAJAMAHENDRAVARAM 4. DURING THE APPEAL HEARING, THE LD.AR ARGUED THAT THE LD.CIT(A)DECIDED THE APPEAL EX - PARTE WITHOUT GOING IN TO MERITS. HE FURTHER SUBMITTED THAT THE PARTNERSHIP FIRM IS IN EXISTENCE AND FILED ITS RETURN OF INCOME ON 09.03.2015 AND THE SOURCES WERE EXPLAI NED IN THE HANDS OF THE FIRM . SINCE THE LAND TRANSACTION WAS EXPLAINED IN PARTNERSHIP FIRM THERE IS NO CASE FOR MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE . THE FUNDS WERE DRAWN FROM NRE ACCOUNT OF K.SRINIVASA RAO, BROTHER - IN - LAW OF THE ASSESSEE AND T HE SOURCES WERE EXPLAINED . ALL THESE ISSUES NEEDS TO BE ADDRESSED AND SUBMITTED THAT THE LD.CIT(A) HAS PASSED THE ORDER WITHOUT CONSIDERING THE CRUCIAL ISSUES, HENCE, REQUESTED TO REMIT THE MATTER BACK TO THE FILE OF THE LD.CIT(A) FOR RECONSIDERATION AND A SSURED TO COOPERATE WITH THE DEPARTMENT FOR EARLY DISPOSAL OF THE APPEAL. 4. ON THE OTHER HAND, THE LD.DR VEHEMENTLY OPPOSED FOR REMITTING THE MATTER BACK TO THE FILE OF THE LD.CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE LD.CIT(A) UPHELD THE ORDER OF THE AO WITHOUT GOING INTO MERITS OF THE CASE. THOUGH THE LD.CIT(A) IS PERMITTED TO PASS EX - PARTE ORDERS, THE LD.CIT(A) REQUIRED TO EXAM INE THE ISSUE IN DETAIL AND PASS THE 5 I.T.A. NO . 159 & 160 /VIZ/201 9 , A.Y. 2007 - 08 AND 20 1 0 - 1 1 BANDLA SESHAGIRI, RAJAMAHENDRAVARAM ORDER ON MERITS. AS EXPLAINED BY THE LD.AR THAT CERTAIN ISSUES SUCH AS APPLICATION OF WITHDRAWALS FROM PNB, ACCOUNTING , THE TRANSACTION IN THE HANDS OF THE FIRM M/S SREE TOWNSHIP REQUIRED TO BE ADDRESSED IN DETAIL. HENCE, WE ARE OF THE CONSIDERED OPINION THAT ONE MORE OPPORTUNITY REQUIRED TO BE GIVEN TO THE ASSESSEE IN THE INTEREST OF JUSTICE. THEREFORE, WE REMIT THE MATTER BACK TO THE FILE OF THE LD.CIT(A) WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE AND DECIDE THE APPEAL AFRESH ON MERITS. THE LD.AR ASSURED TO COOPERATE WITH THE DEPARTMENT AND SUBMIT THE NECESSARY INFORMATION BEFORE THE LD.CIT(A). ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. I.T.A. 160/VIZ/2019, A.Y. 2010 - 11 6. FOR THE A.Y. 2010 - 11 THE ASSESSMENT WAS COMPLETED U/S 1433) R.W.S. 147 OF THE ACT ON TOTAL INCOME OF RS.82,97,220/ - AGAINST THE RETURNED INCOME OF RS.2,97,220/ - . ON APPEAL, THE LD.CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE EX - PARTE WITHOUT GOING INTO MER ITS. IN THE INSTANT CASE ALSO, THE LD.CIT(A) PASSED EX - PARTE ORDER WITHOUT GOING INTO MERITS. HENCE, WE REMIT THE MATTER BACK TO THE FILE OF THE LD.CIT(A) WITH A DIRECTION TO DECIDE THE APPEAL AFRESH ON MERITS. 6 I.T.A. NO . 159 & 160 /VIZ/201 9 , A.Y. 2007 - 08 AND 20 1 0 - 1 1 BANDLA SESHAGIRI, RAJAMAHENDRAVARAM 7. IN THE RESULT, APPEALS OF THE ASSESSEE AR E ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2019. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 20 . 1 1 .2019 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - BANDLA SESHAGIRI, D.NO.3 - 706, RAMAKRISHNA NAGAR HUKUMPETA, RAJAMAHENDRAVARAM 2 . / THE REVENUE - INCOME TAX OFFICER, WARD - 2(3), RAJAMAHENDRAVARAM 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX , RAJAMAHENDRAVARAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS), RAJAMAHENDRAVARAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM