B.V.Sudheer, Hyderabad V. ACIT., Cent.Circle, Tirupathi

ITA 1694/HYD/2013

• Counselvise Citation: 169422514 RSA 2013
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: S RAMA RAO
• Keywords: Gift; Search and seizure
• Section: 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 1692/H/2013 2005-06 MR. B.V. SUMAN, ACIT, CENTRAL CIRCLE, TIRUPATI 1693/H/2013 MR. B.V. SUNEEL 1694/H/2013 MR. B.V. SUDHEER, 1695/H/2013 MS. B. LAKSHMI SUPRAJA ALL ARE RESIDENT OF SANAKAPURAM, KADAPA FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 12.11.2014 DATE OF PRONOUNCEMENT : 19.11.2014 ORDER PER BENCH : THESE FOUR APPEALS ARE BY ASSESSEES AGAINST THE ORDERS OF LD. CIT(A), GUNTUR DATED 30.09.2013 FOR T HE SAME ASSESSMENT YEAR. SINCE COMMON ISSUES ARE INVOLVED I N THESE APPEALS, THE APPEALS ARE HEARD TOGETHER AND DECIDED BY THIS COMMON ORDER. 2. BRIEFLY STATED, ASSESSEES HEREIN ARE INDIVIDUAL S DERIVING INCOME FROM INTEREST RECEIPTS AND THEY HAV E FILED RETURNS CONSEQUENT TO THE SEARCH AND SEIZURE OPERAT IONS IN THE CASE OF MR. B. SRINIVASULU. A.O. INITIATED PROCEEDI NGS UNDER SECTION 148 AND ENQUIRED ABOUT THE UNEXPLAINED CRED ITS RECEIVED BY ASSESSEES DURING THE YEAR. EVEN THOUGH, ASSESSEE HAS FURNISHED NECESSARY CONFIRMATIONS, A.O. DID NOT BELIEVE AS 2 ITA.NO.1692, 1693, 1694 & 1695/H/2013 MR. BV SUMAN AND OTHERS, HYDERABAD STATEMENT RECORDED FROM ONE MR. K. VENKATA KONDAIAH WHO ALONG WITH HIS WIFE GAVE GIFTS TO ASSESSEES AS WELL AS TO MR. B. SRINIVASULU (ALL THE ASSESSEES ARE RELATED TO MR. B . SRINIVASULU BEING FAMILY MEMBERS) DID NOT CONFIRM. A.O. DISBELI EVED OBTAINING OF GIFTS BY VARIOUS FAMILY MEMBERS FROM S AME SET OF PERSONS AND TREATED THE GIFTS RECEIVED AS UNEXPLAIN ED CASH CREDITS AND BROUGHT TO TAX. BEFORE THE LD. CIT(A), ASSESSEE REITERATED THE SUBMISSIONS AND ALSO FILED AFFIDAVIT S CONFIRMING THE FACT OF GIFTS. IT WAS ALSO SUBMITTED THAT ALL T HE PERSONS/DONORS ARE ASSESSED TO TAX BY ITO, KADAPA W HOSE RETURNS ARE FILED. LD. CIT(A), HOWEVER, DID NOT AGR EE AND CONFIRMED THE GIFTS. 3. LD. COUNSEL SUBMITTED THAT THE AO HAD WRONGLY TREATED THE GIFTS RECEIVED FROM THE SAID PE RSONS AS UNEXPLAINED ON THE PREMISE THAT THE ABOVE PERSON S ARE NOT ASSESSED TO INCOME-TAX AND THEIR CREDIT WORTHINESS IS NOT ESTABLISHED. IT WAS FURTHER SUBMI TTED THAT THE AO FAILED TO NOTE THAT THE RETURNS OF INCO ME OF THE DONORS AND THE ASSESSEE ARE ASSESSED WITH THE S AME AO AND THE DONORS HAVE FILED THEIR RETURNS OF INCOM E WHEREIN THEY HAVE ALSO ENCLOSED STATEMENT OF ACCOUN TS EXPLAINING THE GIFTS GIVEN BY THEM TO THE ASSESSEE. THE AR FURTHER SUBMITTED THAT IT WAS NOT APPRECIATED TH AT THE ASSESSEE HAD DISCLOSED THESE DETAILS IN THE ORI GINAL RETURN OF INCOME, WHICH HAD BEEN ACCEPTED BY THE DEPARTMENT AND IN THE ABSENCE OF CONTRARY EVIDENCE TO TREAT THE GIFTS DISCLOSED BY THE ASSESSEE IN HIS OR IGINAL RETURN AS UNEXPLAINED BY THE AO IS INCORRECT. IT WA S ALSO POINTED OUT THAT THE AO SHOULD NOT HAVE COME T O A GENERAL CONCLUSION THAT ALL THE DONORS WERE SIMILAR TO 3 ITA.NO.1692, 1693, 1694 & 1695/H/2013 MR. BV SUMAN AND OTHERS, HYDERABAD SRI VENKATA KONDAIAH WHO HAD INITIALLY CONFIRMED AB OUT THE GIFTS GIVEN TO THE ASSESSEE AND LATER ON HE HAD DENIED IN THE SAME STATEMENT. THE AR OF THE ASSESS EE RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIG H COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI V. ACIT , 231 CTR 474 (GUJ.). THE AR ALSO RELIED UPON THE FOLLOWING CASE LAWS: 1. CALCUTTA BENCH OF ITAT IN THE CASE OF LMJ INTERNATIONAL LTD. VS. DCIT, 119 TTJ 214. 2. AHMEDABAD BENCH OF ITAT IN THE CASE OF ROYAL MARWAR TOBACCO PRODUCTS PVT LTD. VS. DCIT, 29 SOT 53 3. DELHI BENCH OF ITAT IN THE CASE OF ANILKUMAR BHATIA VS. ACIT IN ITA NOS. 2660 TO 2665/DEL/09. 4. VIZAG BENCH OF ITAT IN THE CASE OF KGR EXPORTS VS. JCIT IN ITA NO. 494/V/2007. 3.1. THE AR SUBMITTED THAT AS THE RETURNS HAD BEEN PROCESSED U/S 143(1), THE ASSESSMENTS WERE NOT PENDING AND AS NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, THE ADDITIONS COULD NOT BE SUSTAI NED. 4. AT THE OUTSET, ON ENQUIRY BY BENCH ABOUT THE PROCEEDINGS IN THE CASE OF MR. B. SRINIVASULU, LD. COUNSEL PLACED ON RECORD THE ORDERS IN THE CASE OF MR. B. S RINIVASULU HUF AS WELL AS INDIVIDUAL DECIDED BY THE COORDINATE BENCH IN ITA.NO.1334, 1335 AND 1336/HYD/2011 AND C.OS. 65 AN D 66/HYD/2011 DATED 19.10.2012, WHEREIN SIMILAR GIFTS WERE CONSIDERED AND MATTERS WERE SET ASIDE TO THE FILE O F A.O. FOR FRESH EXAMINATION. WHAT WE NOTICED FROM THE RECORD IS THAT 4 ITA.NO.1692, 1693, 1694 & 1695/H/2013 MR. BV SUMAN AND OTHERS, HYDERABAD FOLLOWING 15 PERSONS HAS GIVEN GIFTS TO ASSESSEES I N THE SAME YEAR AS UNDER : S.NO. DONOR B.V. SUNEEL (RS.) B.V. SUDHEER (RS.) B.V. SUMAN (RS.) B.LAKSHMI SUPRIYA (RS.) TOTAL (RS.) 1. B.SUBBAMMA 2,50,000 2,50,000 1,50,000 2,50,000 9,00,000 2. P. CHENCHAMMA 2,50,000 2,50,000 2,50,000 1,00,000 8,50,000 3. K.VENKATAKONDAIAH 2,00,000 --- --- 2,00,000 4,00,000 4. P. RAJAMMA 2,00,000 2,00,000 --- 1,50,000 5,50,000 5. P. RADHAKRISHNAIAH 1,00,000 --- --- 1,00,000 2,00,000 6. B. PADMAVATHAMMA 3,00,000 3,00,000 2,50,000 --- 8,50,000 7. G. JAYAMMA 1,50,000 1,50,000 2,00,000 2,50,000 7,50,000 8. P. JAYARAMAIAH 2,50,000 2,50,000 1,50,000 50,000 7,00,000 9. P. LAKSHMAMMA 2,00,000 --- 3,00,000 2,00,000 7,00,000 10. P. KONDAMMA 3,00,000 3,00,000 3,00,000 --- 9,00,000 11. N. KAMALAMMA 2,00,000 2,00,000 --- 1,80,000 5,80,000 12. D. GANGAMMA 3,00,000 3,00,000 2,00,000 2,50,000 10,50,000 13. K. ESWARAMMA 2,00,000 --- --- 1,50,000 3,50,000 14. G. SAVITHRAMMA --- 3,00,000 2,50,000 ---- 5,50,000 15. K. SUBBAMMA --- 3,00,000 3,00,000 3,00,000 9,00,000 4.1. WE ALSO NOTICE THAT SAME PERSONS HAVE GIVEN G IFTS TO MR. B. SRINIVASULU ALSO. SINCE THE CREDITWORTHIN ESS AND GENUINENESS OF THESE GIFTS ARE REQUIRED TO BE EXAMI NED, FOLLOWING THE COORDINATE BENCH DECISION IN THE CASE OF MR. B. SRINIVASULU HUF AND INDIVIDUAL, WE RESTORE THE MATT ER TO THE FILE OF A.O. TO CONDUCT PROPER ENQUIRY AND DECIDE T HE ISSUE AFRESH. THE COORDINATE BENCH VIDE PARA 17 OF THE AB OVE REFERRED ORDER DATED 19.10.2012 DECIDED AS UNDER : 17. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF TH E AUTHORITIES BELOW. EVEN THOUGH ON THE LEGAL ISSUE, WE AGREE WITH THE FINDINGS OF THE CIT(A) THAT WHEN NO INCRIMINATING MATERIAL IS FOUND DURING THE COURS E OF SEARCH, THE AO CANNOT MAKE ADDITION ON THE ISSUES, WHICH HAVE ALREADY BEEN COMPLETED, EVEN WHEN THE ASSESSMENTS WERE REOPENED BY VIRTUE OF PROVISIONS OF SECTION 153-A, THE FACT REMAINS THAT THE AO HAS NOT EXAMINED THE DONORS BY ISSUE OF SUMMONS U/S 131 TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE DONORS AND GENUINENESS OF THE TRANSACTIONS. IN THESE CIRCUMSTANCES, WE DEEM I T 5 ITA.NO.1692, 1693, 1694 & 1695/H/2013 MR. BV SUMAN AND OTHERS, HYDERABAD FIT AND PROPER TO SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO CONDUCT PROPER ENQUIRY BY ISSUING SUMMONS TO THE DONORS AND TO EXAMINE THEIR CAPACITY TO MAKE GIFTS. NEEDLESS TO SAY THAT THE AO SHALL GIVE REASONABLE OPPORTUNITY TO THE ASSESSEE TO SUPPORT HIS CASE. WE ORDER ACCORDINGLY. 4.2. KEEPING IN VIEW THE DIRECTIONS OF THE COORDIN ATE BENCH (SUPRA), THE ISSUES IN THESE APPEALS ARE ALSO RESTORED TO THE FILE OF A.O. TO MAKE PROPER ENQUIRIES AND DECID E ABOUT THE GENUINENESS OF THE GIFTS. ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY. ACCORDINGLY, GROUNDS ARE ALLOWED FOR S TATISTICAL PURPOSES. 5. IN THE RESULT, APPEALS OF THE ASSESSEES ARE ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19.11.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 19 TH NOVEMBER, 2014 VBP/- COPY TO 1. 2. 3. 4. MR. B.V. SUMAN, MR. B.V. SUNEEL MR. B.V. SUDHEER, MS. B. LAKSHMI SUPRAJA ALL ARE RESIDENT OF SANAKAPURAM, KADAPA C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, H.NO.3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029. 5. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE , TIRUPATI. 6. CIT(A), GUNTUR + 3 COPIES 7. CIT (CENTRAL), HYDERABAD 8. D.R. ITAT B BENCH, HYUDERABAD