ITO., Ward- 16(2), Hyderabad, Hyderabad V. Late Shri A Ramakrishna Prasad, L/R Smt. A Sesharatnam, Hyderabad

ITA 1648/HYD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6105 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-07-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 28-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Additional evidence
• Section: 142(1); 133A; 69; 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1648/HYD/2014 ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, WARD 16(2), HYDERABAD. VS. LATE SHRI A. RAMAKRISHNA PRASAD, L/R SMT. A. SESHARATNAM (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.J. RAO ASSESSEE BY : SHRI S. RAMA RAO DATE OF HEARING : 19-10-2016 DATE OF PRONOUNCEMENT : 26-10-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST O RDER DATED 21/07/2014 OF LD. CIT(A) - V, HYDERABAD FOR AY 2004 -05. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS A DIRECTOR IN M/S NEELIMALA ESTATES PVT. LTD. WHICH IS IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. A SURVEY U/S 133A WAS CARRIED I N THE CASE OF THE COMPANY ON 9.11.2005. DURING THE COURSE OF SURVEY S OME INVESTMENTS MADE BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY WERE NOTICED. A NOTICE U/S 142(1) DATED 9.11.2005 WAS IS SUED REQUIRING THE ASSESSEE TO FILE HIS RETURN OF INCOME FOR THE A.Y.2 004-05. AS THE ASSESSEE FAILED TO FILE HIS RETURN OF INCOME, SHOW CAUSE LETTERS PROPOSING THE COMPLETION OF ASSESSMENT U/S 144 WERE ISSUED ON 22.12.2006 AND 13.12.2006 FOR WHICH THE ASSESSEE HA S NOT RESPONDED. THEREFORE THE ASSESSING OFFICER COMPLETE D THE ASSESSMENT U/S.144 VIDE ORDER DATED 26.12.2006, BY DETERMINING THE TOTAL INCOME AT RS.35,46,400/-. 2 ITA NO. 1648 /HYD/2014 LATE SHRI A. RAMAKRISHNA PRASAD L/R SMT. A. SESHARATNAM 2.1 AGGRIEVED BY THE ADDITIONS, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A) ON 6.12.2007 AFTER A DELAY OF ALM OST 11 MONTHS AND THE SAME WAS DISMISSED AS NO VALID REASON WAS FOUND FOR THE DELAY IN FILING VIDE ORDER ITA. NO.173/ITO - 16(2)/CLT(A)-V/ 2007-08 DATED 27.3.2008. 2.2 AGGRIEVED BY THE ABOVE ORDER, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE ITAT HYDERABAD ON 13.01.2011 AFTE R A DELAY OF 4 YEARS. THE COORDINATE BENCH VIDE ORDER 65/HYD/2011 DATED 14.12.2011, SET ASIDE ALL THE EARLIER ORDERS, REMIT TED BACK THE FILE TO THE ASSESSING OFFICER TO DECIDE THE ENTIRE MATTER D E NOVO AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 2.3 FOLLOWING THE DECISION OF THIS TRIBUNAL, THE A SSESSING OFFICER INITIATED SCRUTINY PROCEEDINGS AFTER ISSUING A NOTI CE U/S.142(L) OF THE INCOME TAX ACT,1961 AND AFTER PROVIDING AN OPPORTUN ITY TO THE ASSESSEE, AN ORDER U/S 144 R.W.S. 254 WAS ISSUED ON 26.03.2013, CONFIRMING THE ADDITION OF RS. 35,46,400/- AS HELD IN THE EARLIER ORDER DATED 22.12.2006 BASED ON THE IMPOUNDED MATERIAL. T HE ASSESSING OFFICER REJECTED THE ASSESSEE'S CONTENTION THAT THE TRANSACTIONS REFLECTING IN THE DOCUMENTS HAVE BEEN RECORDED IN T HE BOOKS OF ACCOUNTS OF THE COMPANY ON THE GROUND THAT NO SUPPO RTING EVIDENCE HAS BEEN FILED. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A) AND FILED WRITTEN SUBMISSI ONS BEFORE THE CIT(A) WHICH WERE EXTRACTED BY THE CIT(A)IN HIS ORD ER AT PAGES 3 & 4. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THE AO APPARENTLY MADE THE ADDITIONS BASED ON THE COPIES OF TWO SALE DEEDS FORMING PART OF THE IMPOUN DED MATERIAL, IN WHICH THE CONSIDERATION AMOUNT OF RS.8,77,000/- AND RS.21,51,500/- HAVE BEEN AGREED TO BE PAID BY THE ASSESSEE AND IN WHICH THE 3 ITA NO. 1648 /HYD/2014 LATE SHRI A. RAMAKRISHNA PRASAD L/R SMT. A. SESHARATNAM AMOUNTS OF REGISTRATION CHARGES WAS ALSO MENTIONED. HE OBSERVED THAT THE COPIES OF THE SALE DEEDS WERE PRESENTED BE FORE HIM BY THE AR OF THE ASSESSEE AND IT IS OBSERVED THAT THE SALE DEEDS ARE NOT REGISTERED AND THERE IS NO DATE ON THE SAID SALE D EEDS NOR DOES IT BEAR THE SIGNATURE OF THE VENDORS NOR OF THE CONFIR MING PARTY WHO IS A GPA HOLDER OF THE PROPERTIES OFFERED UNDER THE SALE DEEDS TO THE ASSESSEE. FURTHER, HE OBSERVED THAT THE DOCUMENTS A LSO DO NOT SPECIFY THE CHALLAN NUMBER OR THE DATE ON WHICH THE REGISTRATION CHARGES HAVE BEEN PAID, WHICH GIVE CREDENCE TO THE THEORY OF THE ASSESSEE THAT THE SALE DEEDS ARE ONLY DRAFT AGREEME NTS AND THE PROPERTIES WERE NOT REGISTERED IN THE NAME OF THE A SSESSEE. 4.1 THE CIT(A) REFERRING TO THE PROVISIONS OF SECTI ON 69 OF THE ACT, DELETED THE ADDITION MADE BY THE AO BY HOLDING AS U NDER: 4.1.2 THE AO WHILE MAKING THE ADDITION ORIGINALLY I N HIS ORDER DATED 25.1.2007 AND SUBSEQUENTLY DURING THE SCRUTIN Y PROCEEDINGS U/S143(3) AS PER ORDERS OF THE ITAT, HA S NOT BROUGHT ON RECORD, ANY MATERIAL TO PROVE THAT THE P ROPERTIES STATED IN THE SALE DEEDS WERE DULY CONVEYED TO THE ASSESSEE THROUGH REGISTERED SALE DEEDS SUBSEQUENTLY, OR WITH RESPECT TO THE PAYMENT OF CONSIDERATION TO THE VENDEES, AS THE BASIS ON WHICH THE ADDITIONS WERE MADE APPEAR TO BE DRAFT SA LE DEEDS WITHOUT SIGNATURES OF THE EXECUTANTS IN PLACE. 5. IN VIEW OF THE FOREGOING REASONS, THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.34,26,400/- AS UNEXPLAINE D INVESTMENT U/S. 69 OF THE I.T. ACT, AND HENCE, THE SAME IS DEL ETED. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US RA ISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 69A OF RS. 34,26,400/-, WHICH INCLUDED RS. 50,000/- AGAINST WH ICH THERE IS NO ADJUDICATION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN TREATING THE COPIES OF SALE DEEDS F OUND DURING THE SURVEY AS 'DRAFT DEEDS', WITHOUT APPRECIATING T HAT THE SAME WERE SUFFICIENT EVIDENCE OF INVESTMENT MADE PRIOR T O THE SURVEY. 4 ITA NO. 1648 /HYD/2014 LATE SHRI A. RAMAKRISHNA PRASAD L/R SMT. A. SESHARATNAM 3. THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT TH E AO HAD FOUND THE EXPLANATION OFFERED BY THE ASSESSEE WITH REGARD TO SUCH INVESTMENT AS NOT SATISFACTORY. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 6. LD. DR SUBMITTED BEFORE US THAT THE DOCUMENT SE IZED DURING SURVEY IS CLEAR PROOF THAT THE ASSESSEE HAS INVESTE D IN THE PROPERTY. HE BROUGHT TO OUR NOTICE THAT THE ASSESSEE HAS SUBM ITTED BEFORE THE AO THAT ALL THE INVESTMENTS WERE RECORDED IN THE CO MPANY, FOR WHICH THERE IS NO PROOF NOR SUBSTANTIATED BY THE ASSESSEE . HE SUBMITTED THAT THE AO HAS RIGHTLY REJECTED THE SUBMISSIONS OF THE ASSESSEE. HE FURTHER SUBMITTED THAT CIT(A) HAS NOT ADJUDICATED T HE ADDITIONAL EVIDENCE OF INVESTMENT OF RS. 50,000/- IN HIS ORDER . 7. LD. AR, ON THE OTHER HAND, RELIED ON THE ORDER O F CIT(A). HE SUBMITTED THAT THE ASSESSEE HAS EXPIRED DUE TO ILL HEALTH. WHEN THE ASSESSMENT PROCEEDINGS WERE ON, THE ASSESSEE WAS NO T WELL DUE TO PROLONGED ILL HEALTH, HENCE, HE COULD NOT REPRESENT HIS CASE. HE SUBMITTED THAT SUBSTANTIAL TIME HAS ELAPSED AND TH E COMPANY ALSO NOT DOING WELL AND FURTHER THE OTHER DIRECTOR ALSO EXPIRED. DUE TO MISCOMMUNICATION, THE AR OF THE ASSESSEE REPRESENTE D BEFORE THE AO THAT THE INVESTMENTS WERE RECORDED IN THE BOOKS OF THE COMPANY. HE FURTHER SUBMITTED AND BROUGHT TO OUR NOTICE THE COPIES OF THE SALE DEEDS WHICH ARE IMPOUNDED BY THE DEPARTMENT. THESE DEEDS ARE UNSIGNED BY ANY PERSON AND HAS NO EVIDENCE OF REGIS TRATION. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. IN THE FIRST ASSESSMENT, THE ASSESSEE HA S NOT REPRESENTED HIS CASE PROPERLY AND DUE TO COORDINATE BENCH DECIS ION, THE ASSESSMENT WAS COMPLETED DE NOVO. IN THE SECOND ROU ND OF APPEAL, THE ASSESSEE HAS PASSED AWAY. IT IS NOTED THAT THE AO GAVE THE DETAILS OF IMPOUNDED INFORMATION TO THE AR AND AR H AS SUBMITTED THAT THESE INVESTMENTS WERE RECORDED IN THE BOOKS OF THE COMPANY, BUT, WE ARE NOT SURE, IF THE SUBMISSION IS AFTER PROPER VERIFICATION. AT THE 5 ITA NO. 1648 /HYD/2014 LATE SHRI A. RAMAKRISHNA PRASAD L/R SMT. A. SESHARATNAM OUTSET, THE DOCUMENTS SUBMITTED BEFORE US SHOWS THA T THE SALE DEEDS ARE NOT SIGNED BY ANY OF THE PARTIES NOR IT HAS ANY EVIDENCE OF REGISTRATION. MOREOVER, THE AO HAS NOT BROUGHT ANY MATERIAL TO INDICATE THAT THE PROPERTIES, WHICH ARE ALLEGED TO PURCHASE WERE IN FACT PURCHASED BY THE ASSESSEE OR BY THE COMPANY. W E CANNOT PRESUME ANYTHING IN THE ABSENCE OF PROPER DOCUMENT WHICH INDICATES THE PURCHASE OF PROPERTY. HENCE, WE REJECT THESE DO CUMENTS AS PROPER EVIDENCE WHICH INDICATES THAT IT IS PROPERLY REGISTERED DOCUMENTS. 9. WITH REGARD TO DRS SUBMISSION, THERE IS NO ADJU DICATION ON THE ADDITIONAL EVIDENCE OF INVESTMENT OF RS. 50,000/-, AO HAS TREATED ALL THE INVESTMENTS AS PART OF INVESTMENT IN PROPERTY. SINCE THE EVIDENCE ADVANCED FOR THE INVESTMENT OF PROPERTY IS NOT PROP ER EVIDENCE, THEREFORE, WE REJECT THE WHOLE INVESTMENT THEORY, W HICH PROMPTED AO TO MAKE ADDITION U/S 69A, THIS ADDITIONAL ADDITION OF RS. 50,000/- ALSO PART OF SUCH INVESTMENT. 10. CONSIDERING THE ABOVE DISCUSSION, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER AC COUNTANT MEMBER HYDERABAD, DATED: 26 TH OCTOBER, 2016 KV 6 ITA NO. 1648 /HYD/2014 LATE SHRI A. RAMAKRISHNA PRASAD L/R SMT. A. SESHARATNAM COPY TO:- 1) ITO, WARD 16(2), ROOM NO. 227, BLOCK-B, 2 ND FLOOR, IT TOWERS, AC GUARDS, HYDERABAD. 2) LATE SHRI A. RAMAKRISHNA PRASAD, L/R, SMT. A. SESHARATNAM, FLAT NO. 203, RAJ RESIDENCY, NEAR NANDI NAGA R COLONY, BANJARA HILLS, HYDERABAD. 3) CIT(A) V, HYDERABAD 4) CIT - IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE