Diwakar Mahankali, Hyderabad, Hyderabad V. ITO, Ward-4(1), Hyderabad, Hyderabad

ITA 1633/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6185 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Business income
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1633/HYD/2016 ASSESSMENT YEAR: 2007-08 MAHANKALI DIWAKAR, HYDERABAD [PAN: AFYPM9600F] VS INCOME TAX OFFICER, WARD-4(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI K.J. RAO, DR DATE OF HEARING : 01-02-2017 DATE OF PRONOUNCEMENT : 08-02-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-1, HYDERABAD DATED 29-07-2016 ON THE ISSUE OF ADDITION OF RS. 10,28,312/ -. 2. THIS APPEAL WAS FILED WITH A DELAY OF 19 DAYS AND ASSESSEE HAS FILED CONDONATION PETITION STATING THAT HE WAS BED-R IDDEN DUE TO ACUTE LOW BACK-ACHE AND ADVISED COMPLETE REST BY DR . KIRAN KUMAR OF M/S. PRAJA SAI HOSPITAL AND NECESSARY CERTIF ICATE WAS ENCLOSED. CONSIDERING THE SUBMISSIONS OF ASSESSEE A ND OBJECTIONS FROM THE DR, I AM SATISFIED THAT THERE WAS SUFFICIENT CA USE FOR FILING THE APPEAL BELATEDLY. ACCORDINGLY DELAY IS CONDONED AND APPEAL HAS BEEN ADMITTED TO DECIDE THE SAME ON MERITS. I.T.A. NO. 1633/HYD/2016 MAHANKALI DIWAKAR :- 2 - : 3. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL AND IS D ERIVING INCOME FROM FILM PRODUCTION AND RUNNING A DIAGNOSTIC CENTRE. ASSESSING OFFICER (AO) COMPLETED THE ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT [ACT] ON 09-07-2009 DETERMINING TOTAL INCOME AT RS. 2,83,110/-. LD.CIT-4, HYDERABAD INITIATED PROCEE DINGS U/S. 263 AS HE HAS NOTICED THAT THE DEPOSITS CONSIDERED BY AS SESSEE WHILE COMPLETING THE ASSESSMENT AND MAKING ESTIMATION AT 25% IS LESS THAN WHAT ASSESSEE HAS DEPOSITED IN THE BANK ACCOU NTS. ASSESSEE HAS SHOWN GROSS RECEIPTS FROM BUSINESS AT RS . 27,63,000/-, WHEREAS THE CASH DEPOSITS IN THE BANK WA S TO THE TUNE OF 37,91,312/-. AO WHILE COMPLETING THE ASSESSM ENT HAS DETERMINED THE PEAK DEPOSITS AT RS. 16 LAKHS AND ESTIM ATED THE INCOME THEREON AT 25% AND AFTER MAKING ADJUSTMENT OF I NCOME DECLARED, COMPLETED THE ASSESSMENT. LD.CIT DID NOT AG REE WITH SUCH ACTION AND NOTICED THAT DEPOSITS ARE MORE AND THERE FORE, DIRECTED THE AO TO MAKE AN ADDITION OF RS. 10,28,312/- . IN CONSEQUENCE THEREAFTER, AO MADE THE ADDITION AS DIRECTE D BY THE CIT IN THE ORDER VIDE PARA 7 OF THE ORDER, WHEREIN HE CLEARLY STATED THAT AS DIRECTED BY THE CIT, CASH DEPOSITS IN BANK ACC OUNT IN EXCESS OF BUSINESS RECEIPTS IS TREATED AS UNEXPLAINE D INVESTMENT. AGGRIEVED ON THE SAID ADDITION, ASSESSEE PREFERRED A N APPEAL BEFORE THE CIT(A). 3.1. IN THE MEANTIME, ASSESSEE ALSO QUESTIONED THE PROC EEDINGS U/S. 263. THE ITAT VIDE ITS ORDER IN ITA NO. 501/HY D/2012 DT. 22-02-2013, WHILE UPHOLDING THE INVOKING OF THE JURI SDICTION U/S. 263, HOWEVER, MODIFIED THE DIRECTION OF THE CIT TO ADD THE ENTIRE AMOUNT AND DIRECTED THE AO TO CARRY OUT DETAILED ENQUIR Y ON ALL I.T.A. NO. 1633/HYD/2016 MAHANKALI DIWAKAR :- 3 - : ISSUES RAISED BY THE CIT IN HIS ORDER AND DECIDE THE REON. THE DIRECTION OF THE ITAT IN PARA 13 IS AS UNDER: 13. HOWEVER, THE DIRECTION OF THE CIT TO MAKE ADDI TION OF RS. 10,24,012 TOWARDS UNEXPLAINED INVESTMENT IS DELETED . THE CIT ORDER IS MODIFIED TO THAT EXTENT AND THE ASSESSING OFFICER IS DIRECTED TO CARRY OUT DETAILED ENQUIRY ON ALL THE ISSUES RAI SED BY THE CIT IN HIS ORDER AND DECIDE THEREUPON. THE ORDER OF THE C IT IS SUSTAINED TO THAT EXTENT AND THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 4. ASSESSEE HAS POINTED OUT TO THE CIT(A) THAT AO CANN OT MAKE ADDITION AS SUCH AS IT WAS DIRECTED TO BE DELETED. LD .CIT WHILE EXTRACTING THE ORDER OF THE ITAT IN THE ORDER, HOWEVER, RECORDED THAT ITAT IS VERY CLEAR IN DIRECTING THE AO TO GO AHEAD WHERE THE VERIFICATION OF ISSUE OF UNEXPLAINED INVESTMENT IS CON CERNED. ACCORDINGLY, SHE DISMISSED THE GROUND. 5. BEFORE ME, LD. COUNSEL REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A) THAT ADDITION OF RS. 10,24,012/- SHO ULD NOT HAVE BEEN MADE BY THE AO. HE RELIED ON THE ORDERS OF THE I TAT IN THIS REGARD. 6. LD.DR, HOWEVER, RELIED ON THE ORDERS OF THE AUTHORI TIES. 7. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES. AO FOLLOWING THE ORDER OF T HE CIT HAS COMPLETED THE ASSESSMENT PROCEEDINGS ON 16-11-2012. THE ORDER OF THE ITAT MODIFYING THE DIRECTION OF THE CIT WAS DT. 22-02-2013; THEREFORE, AO HAD NO OCCASION TO FOLLOW THE DIRECTION OF THE ITAT. LD.CIT(A) COULD HAVE FOLLOWED THE DIRECTIONS OF THE IT AT AND EXAMINED THE ISSUE AFRESH. HOWEVER, LD.CIT(A) DISMI SSED THE GROUND WITHOUT CONSIDERING THAT THE DIRECTIONS OF THE IT AT CAME I.T.A. NO. 1633/HYD/2016 MAHANKALI DIWAKAR :- 4 - : SUBSEQUENT TO THE ORDER OF THE AO. IN VIEW OF THAT, I A M OF THE OPINION THAT THE ORDER OF THE AO CANNOT BE SUSTAINED AS S UCH. SINCE THE ITAT HAS MODIFIED THE DIRECTION OF THE CIT TO MAKE ADDITION OF RS. 10,24,012/- TOWARDS UNEXPLAINED INVE STMENT, THE ADDITION MADE BY THE AO AS SUCH CANNOT BE SUSTAINED. H OWEVER, SINCE AO HAD NO OCCASION TO FOLLOW THE DIRECTIONS OF THE ITAT TO CARRY OUT DETAILED ENQUIRY OF ALL ISSUES RAISED BY THE CIT IN HIS ORDER AND TO DECIDE THEREUPON, IN ORDER TO ENABLE THE A O TO DO SO, THE IMPUGNED ORDERS OF THE AO AND CIT(A) ARE HEREBY S ET ASIDE AND THE PROCEEDINGS ARE RESTORED TO THE FILE OF THE AO TO COM PLETE THEM AFRESH, KEEPING IN MIND THE DIRECTIONS OF THE ITAT. NE EDLESS TO STATE THAT ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY TO E XPLAIN VARIOUS DEPOSITS AND RECEIPTS. ACCORDINGLY, THE GROUND S ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 8 TH FEBRUARY, 2017 TNMM I.T.A. NO. 1633/HYD/2016 MAHANKALI DIWAKAR :- 5 - : COPY TO : 1. MAHANKALI DIWAKAR, HYDERABAD. C/O. SRI S. RAMA R AO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-4(1), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-1, HYDERABAD . 4. THE PR. COMMISSIONER OF INCOME TAX-1, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.