Smt Kavitha Gampa, Hyderabad V. ITO., Ward-5(1), Hyderabad

ITA 1614/HYD/2014

• Counselvise Citation: 161422514 RSA 2014
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained investment; Value adopted by valuation officer; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1614/HYD/2014 ASSESSMENT YEAR: 2009-10 SMT. KAVITHA GAMPA, HYDERABAD PAN AAPPG 6475 N VS. INCOME TAX OFFICER, WARD 5(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SHRI RAJAT MITRA DATE OF HEARING 04-02-2015 DATE OF PRONOUNCEMENT 13-02-2015 O R D E R PER SAKTIJIT DEY, J.M.: THE AFORESAID APPEAL OF ASSESSEE IS DIRECTED AGAIN ST ORDER DATED 30/06/2014 OF LD. CIT(A)-V, HYDERABAD PERTAIN ING TO AY 2009- 10. 2. THE ONLY ISSUE IN THE APPEAL IS IN RELATION TO A DDITION AS UNEXPLAINED INVESTMENT OF AN AMOUNT OF RS. 31,28,51 4 BY AO AND ENHANCED TO RS. 35,74,082 BY LD. CIT(A). 3. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPU TE ARE, ASSESSEE IS AN INDIVIDUAL. FOR THE AY UNDER CONSIDERATION SHE F ILED HER RETURN OF INCOME ON 31/07/2009 DECLARING TOTAL INCOME OF RS. 4,40,570. DURING THE RELEVANT FY, ASSESSEE ALONG WITH HER HUSBAND EN TERED INTO A REGISTERED SALE DEED VIDE SALE DEED NO. 10106 DATED 11/08/2008 WITH A NUMBER OF COMPANIES, INCLUDING M/S MYTAS PROPERTI ES LTD. FOR PURCHASING A PROPERTY CONSISTING OF SEMI-FINISHED H OUSE WITH PLINTH 2 ITA NO. 1614/HYD/2014 SMT. KAVITHA GAMPA AREA OF 2757 SQ.FT. ON A PLOT OF 301 SQ.YDS. IN PL OT NO. 263, HILL COUNTRY SITUATED IN SURVEY NOS. 192P TO 198P, 201P AND 282P OF BACHUPALLY VILLAGE, QUTUBULLAPUR MANDAL, R.R. DISTR ICT FOR A CONSIDERATION OF RS. 34,52,000. ON THE VERY SAME DA Y, ASSESSEE ALONG WITH HER HUSBAND ALSO ENTERED INTO A SEPARATE AGREEMENT REGISTERED AS DOCUMENT NO. 10107 DATED 11/08/2008 W ITH M/S MAYTAS PROPERTIES LTD. FOR CONSTRUCTION OF THE SEMI-FINISH ED HOUSE WITH PLINTH AREA OF 2757 SQ.FT. FOR AN AGREED CONSIDERATION OF RS. 39,73,608. THE CONSTRUCTION AGREEMENT ALSO PROVIDED, THE FINISHED PROPERTY WILL HAVE TO BE HANDED OVER TO ASSESSEE AND HER HUSBAND BY 31 /08/2008. ON EXAMINING THESE FACTS, AO CALLED UPON ASSESSEE TO E XPLAIN THE SOURCE OF INVESTMENT MADE IN PURCHASE AS WELL AS CONSTRUCT ION OF HOUSE PROPERTY. AFTER VERIFYING THE INFORMATION SUBMITTED BY ASSESSEE, IT WAS NOTICED BY AO THAT TOTAL INVESTMENT IN THE PROPERTY CLAIMED TO HAVE BEEN MADE BY ASSESSEE AND HER HUSBAND WAS TO THE TU NE OF RS. 82,51,980. AO TAKING THE AFORESAID TOTAL INVESTMENT INTO CONSIDERATION, COMPUTED ASSESSEES SHARE IN THE TOT AL INVESTMENT AT RS. 41,25,990, THE SOURCE OF WHICH, ASSESSEE WAS CA LLED UPON TO EXPLAIN. AS NOTED BY AO, ASSESSEE COULD PROVE THE S OURCE OF INVESTMENT TO THE EXTENT OF RS. 9,97,476 LAKH BEING OUTGOING FROM THE BANK ACCOUNT. HOWEVER, AS NOTED BY AO, ASSESSEE COU LD NOT EXPLAIN THE SOURCE OF INVESTMENT OF BALANCE AMOUNT OF RS. 3 1,28,514. AO, THEREFORE, TREATED THE SAME AS UNEXPLAINED INVESTME NT OF ASSESSEE AND ADDED TO HER INCOME FOR THE IMPUGNED AY. BEING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 4. IN COURSE OF HEARING OF APPEAL BEFORE LD. CIT(A) , ASSESSEE EXPLAINING THE SOURCE OF INVESTMENT SUBMITTED THAT OUT OF TOTAL INVESTMENT OF RS. 82,51,980, INVESTMENT MADE BY HER IS TO THE TUNE OF RS. 11,94,074, AN AMOUNT OF RS. 14,83,823 IS BY OTH ER COOWNER I.E. ASSESSEES HUSBAND AND AN AMOUNT OF RS. 52,02,683 W AS BY WAY OF HOUSING LOAN FROM SBI. THAT BESIDES, AN AMOUNT OF R S. 3,75,000 WAS TAKEN AS LOAN FROM ASSESSEES BROTHER SHRI G. AMAR PAL. ON THE BASIS 3 ITA NO. 1614/HYD/2014 SMT. KAVITHA GAMPA OF THE SUBMISSIONS MADE BY ASSESSEE, LD. CIT(A) CAL LED FOR A REMAND REPORT FROM AO. HOWEVER, ULTIMATELY, LD. CIT(A) APP ROVED THE VIEW OF AO THAT ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE S OURCE OF INVESTMENT EXCEPT AN AMOUNT OF RS. 9,97,476, HENCE, THE BALANCE AMOUNT OF INVESTMENT FROM ASSESSEES SHARE AMOUNTIN G TO RS. 31,28,514 REMAINED UNEXPLAINED. FURTHER, LD. CIT(A) , NOTICED THAT IN THE MEANWHILE DEPARTMENTAL VALUATION OFFICER (DVO) HAS ALSO SUBMITTED HIS REPORT BY DETERMINING THE VALUE OF TH E PROPERTY AT RS. 91,43,117 AND AS PER SUCH VALUATION OF DVO, ASSESSE ES SHARE IN THE INVESTMENT IS ENHANCED TO RS. 45,71,559. ACCORDINGL Y, LD. CIT(A) TREATED THE DIFFERENTIAL AMOUNT ALSO AS UNEXPLAINE D INVESTMENT OF ASSESSEE, HENCE, TOTAL ADDITION WAS ENHANCED TO RS. 35,75,082. 5. LD. AR REITERATING THE SUBMISSIONS MADE BEFORE T HE DEPARTMENTAL AUTHORITIES CONTENDED THAT ASSESSEE HA S FULLY EXPLAINED THE SOURCES WITH SUPPORTING EVIDENCES. IT WAS SUBMI TTED THAT ASSESSEES FATHER SHRI RAGHAVA RAO ISSUED A CHEQUE FOR RS. 11,07,821 THROUGH CHEQUE NO. 885945 TO M/S MAYTAS P ROPERTIES LTD. ON BEHALF OF ASSESSEE, WHICH WAS RETURNED BACK BY H ER THROUGH CHEQUE NO. 184826 DATED 07/02/06. IN THIS REGARD, L D. AR DREW OUR ATTENTION TO THE FINANCIAL STATEMENT OF ACCOUNT OF M/S MAYTAS PROPERTIES LTD AND THE BANK ACCOUNT COPY OF ASSESSE E. LD. AR SUBMITTED THAT AO AS WELL AS LD. CIT(A) ALSO TOTALL Y IGNORED THE HOUSE LOAN ADVANCED BY SBI IN THE JOINT NAME OF ASSESSEE AND HER HUSBAND FOR AN AMOUNT OF RS. 52,02,683. LD. AR SUBMITTED TH AT SINCE THE SOURCE OF INVESTMENT IS FULLY EXPLAINED WITH SUPPOR TING EVIDENCE ADDITION MADE IS NOT JUSTIFIED. AS FAR AS THE DIFFE RENCE IN VALUATION OF THE PROPERTY ARISING DUE TO VALUATION BY DVO, LD. AR SUBMITTED THAT NO ADDITION CAN BE MADE ON THAT ACCOUNT AS ASSESSEE HAS NOT CONSTRUCTED HOUSE HERSELF BUT HAS GOT IT CONSTRUCTE D THROUGH A THIRD PARTY. THEREFORE, IF THERE IS ANY DIFFERENCE IN VAL UATION, ASSESSEE CANNOT BE HELD RESPONSIBLE FOR THAT AS PAYMENT MADE BY ASSESSEE TO THE CONTRACTOR IS AS PER THE TERMS OF THE AGREEMENT BETWEEN THE 4 ITA NO. 1614/HYD/2014 SMT. KAVITHA GAMPA PARTIES. THUS, LD. AR SUBMITTED, THE ADDITION MADE SHOULD BE DELETED. LD. DR ON THE OTHER HAND, RELIED UPON THE ORDERS OF AO AND LD. CIT(A). 6. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. A FTER GOING THROUGH THE DOCUMENTARY EVIDENCES SUBMITTED BY ASSESSEE BEF ORE LD. CIT(A), WHICH WERE ALSO EXAMINED BY AO DURING THE REMAND AN D FORMS PART OF PAPER BOOK SUBMITTED BEFORE US, WE ARE OF THE VIEW THAT THE ADDITION MADE CANNOT BE SUSTAINED. AS CAN BE SEEN FROM THE M ATERIALS ON RECORD, BEFORE LD. CIT(A) ASSESSEE WHILE EXPLAINING THE SOURCE OF INVESTMENT HAS BROUGHT IT ON RECORD THAT AN AMOUNT OF RS. 52,02,683 WAS TAKEN AS LOAN FROM SBI. THIS FACT IS ALSO PROV ED FROM THE SANCTION LETTER DATED 10/10/06 OF SBI, HYDERABAD. F URTHER, FINAL STATEMENT OF ACCOUNTS RECEIVED FROM M/S MAYTAS PROP ERTIES LTD., WHO CONSTRUCTED THE HOUSE NOT ONLY ESTABLISH THE FACT OF HOUSING LOAN BUT, ALSO ACTUAL INVESTMENT MADE BY ASSESSEE AND HER HUS BAND. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY IGNORING SUCH E VIDENCES CANNOT BE UPHELD. MOREOVER FROM THE FINAL STATEMENTS OF AC COUNTS OF M/S MAYTAS PROPERTIES LTD., A COPY OF WHICH IS SUBMITTE D IN THE PAPER BOOK AS WELL AS ASSESSEES BANK ACCOUNT COPY IT APP EARS CLAIM OF ASSESSEE THAT SHE PAID AN AMOUNT OF RS. 11,07,821 I S CORRECT. THEREFORE, WITHOUT PROPERLY APPRECIATING EVIDENCES BROUGHT ON RECORD AO HAS MADE THE ADDITION PURELY ON CONJECTURES AND SURMISES. UNFORTUNATELY, LD. CIT(A) ALSO HAS NOT PROPERLY APP RECIATED THE EVIDENCES BROUGHT ON RECORD. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT NO ADDITION CAN BE MADE ON ACCOUNT OF UNEXPLAINED INVE STMENT AS ASSESSEE HAS EXPLAINED THE SOURCES OF INVESTMENT WI TH SUPPORTING EVIDENCE. AS FAR AS THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN VALUATION AS PER THE DVO, WE ARE OF THE VIEW THAT I T IS TOTALLY UNCALLED FOR. IT IS NOT DISPUTED THAT ASSESSEE HAS ENTERED I NTO REGISTERED AGREEMENT WITH M/S MAYTAS PROPERTIES LTD. FOR PURCH ASE AND 5 ITA NO. 1614/HYD/2014 SMT. KAVITHA GAMPA CONSTRUCTION OF THE PROPERTY ALONG WITH HER HUSBAND FOR A TOTAL CONSIDERATION OF RS. 82,51,980 WHICH IS ALSO REFLEC TED IN FINAL STATEMENT OF ACCOUNTS ALSO OF M/S MAYTAS PROPERTIES LTD.. IT IS ALSO NOT DISPUTED THAT THE PROPERTY WAS CONSTRUCTED BY M /S MAYTAS PROPERTIES LTD. IN THESE CIRCUMSTANCES, WE FAIL TO UNDERSTAND HOW THE SO CALLED DIFFERENCE IN VALUATION CAN BE TREATED AS UNEXPLAINED INVESTMENT OF ASSESSEE WHEN THE CONSTRUCTION HAS BE EN MADE BY A THIRD PARTY. WHEN PAYMENTS HAVE BEEN MADE TO PERSO N CONSTRUCTING PROPERTY AS PER THE TERMS OF THE AGREEMENT AND THER E IS NO EVIDENCE BEFORE THE DEPARTMENT THAT ASSESSEE HAS PAID MORE T HAN WHAT IS SHOWN IN THE AGREEMENT, NO ADDITION CAN BE MADE AT THE HANDS OF ASSESSEE ON THE BASIS OF VALUATION MADE BY DVO. IN THE AFORESAID VIEW OF THE MATTER, WE HOLD THAT THE ADDITION MADE IN THE PRESENT CASE IS NOT JUSTIFIED AND ACCORDINGLY, WE DELETE THE SAM E. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 13/02/2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 13 TH FEBRUARY, 2015 KV COPY TO:- 1) SMT. KAVITHA GAMPA, C/O A.V. RAGHURAM, ADVOCATE , 610, BABUKHAN ESTATE, BASHEERBAG, HYDERABAD 500 020. 2) ITO,WARD 5(1), HYDERABAD 3) CIT(A)-V, HYDERABAD. 4) CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6 ITA NO. 1614/HYD/2014 SMT. KAVITHA GAMPA DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER