Meticulous properties LLP, Secunderabad V. DCIT., Circle-16(2), Hyderabad, Hyderabad

ITA 1694/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87456 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: NITISH GROVER
• Keywords: Additional evidence
• Section: 143(3); 68; 263

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.1694/HYD/2014 ASSESSMENT YEAR 2007-2008 M/S. METICULOUS PROPERTIES LLP SECUNDERABAD. PAN AADCM9421D VS. DCIT 16(2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. NITISH GROVER FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 18.03.2015 DATE OF PRONOUNCEMENT : 25.03.2015 ORDER PER B. RAMAKOTAIAH, J.M. THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-V, HYDERABAD DATED 30.06.2014. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO ADDITION OF RS. 50 LAKHS AS UNEXP LAINED INCOME UNDER SECTION 68 OF THE I.T. ACT. 2. ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUC TION OF FLATS AND BUILDING AND A.O. HAS COMPLETED THE ASSES SMENT UNDER SECTION 143(3) OF THE I.T. ACT ORIGINALLY ON 28.09. 2009 BY MAKING A SMALL DISALLOWANCE OUT OF RATES AND TAXES. THE CIT INVOKED THE PROVISIONS OF SECTION 263 TO SET ASIDE THE ASSESSME NT FOR EXAMINATION OF CREDITS RECEIVED BY THE ASSESSEE FRO M 4 PERSONS ON 19.05.2006 BY WAY OF CHEQUES. THE CIT RECORDS THAT THESE CHEQUES WERE RETURNED ON 26.05.2006 ITSELF. HOWEVER, ON THE REASON THAT A.O. HAS NOT EXAMINED THE CREDITS IN ITS CORRECT PE RSPECTIVE THE 2 ITA.NO.1694/HYD/2014 M/S. METICULOUS PROPERTIES LLP, SECUNDERABAD ORDER OF THE A.O. WAS SET ASIDE AND A.O. WAS DIRECT ED TO MAKE ENQUIRY INTO THE CREDITS FROM FOUR PERSONS AND COMP LETE THE ASSESSMENT DENOVO. ASSESSEE HAS NOT OBJECTED TO THE ORDER OF CIT UNDER SECTION 263 AS IT WAS SET ASIDE WITHOUT ANY D IRECTIONS. IN THE COURSE OF RE-ASSESSMENT PROCEEDINGS ASSESSEE HAS FU RNISHED VARIOUS CONFIRMATION LETTERS, COPY OF THE RETURNS AND ALSO BANK ACCOUNTS TO SUPPORT THAT ASSESSEE DID RECEIVE AMOUNT OF RS. 50 LAKHS FROM FOUR PERSONS AS A BUSINESS CONSIDERATION AND IMMEDIATELY THEY WERE RETURNED AND SHOWED THE ENTRIES THEREON. A.O. HOWEV ER, DID NOT ACCEPT ASSESSEES CONTENTION AND HELD THAT NO CONFI RMATIONS OR EVIDENCES WERE PRODUCED TILL 31.12.2012 IN RESPECT OF THE AMOUNT CLAIMED TO HAVE RECEIVED FROM THE ABOVE MENTIONED F OUR PERSONS. 3. BEFORE THE LD. CIT(A) ASSESSEE FILED ALL THE DO CUMENTS WHICH ARE PLACED BEFORE A.O. AND LD. CIT(A) SENT TH E MATTER TO THE FILE OF A.O. EVEN THOUGH PARA 4.3 OF THE ORDER OF L D. CIT(A) RECORDS THAT A.O. WAS REMINDED FOUR TIMES AND NO REPORT HAS COME, THE CIT WENT ON TO DECIDE THE ISSUE ON MERITS, AS HE FELT T HAT REMAND REPORT IS NOT NECESSARY. IN PARA 4.4 OF THE ORDER, HE AGRE ED WITH THE OBSERVATIONS OF THE A.O. THAT ASSESSEE NEITHER PROD UCED CONFIRMATION LETTERS ABOUT THE NATURE AND SOURCE NO R SATISFACTORY EXPLANATION WAS OFFERED FOR THE CASH CREDITS OF RS. 50 LAKHS. HE CONFIRMED THE AMOUNT IN HIS BRIEF ORDER AS UNDER : 4.4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE APPELLANT AND THE ASSESSMENT ORDER. I AGREE WITH TH E OBSERVATIONS OF THE A.O. AND HOLD THAT AS THE ASSES SEE NEITHER PRODUCED CONFIRMATION LETTERS ABOUT THE NATURE AND SOURCE NOR SATISFACTORY EXPLANATION OFFERED FOR THE CASH CREDI TS OF RS.50 LAKHS, INSPITE OF REASONABLE OPPORTUNITY, THE A.O. HAS RIGHTLY ADDED RS.50 LAKHS ON ACCOUNT OF UNEXPLAINED INCOME UNDER SECTION 68 OF THE ACT. HENCE, I CONFIRM THE ADDITIO N. 3 ITA.NO.1694/HYD/2014 M/S. METICULOUS PROPERTIES LLP, SECUNDERABAD 4. LD. COUNSEL REFERRING TO THE ORIGINAL ORDER UND ER SECTION 143(3) SUBMITTED THAT A.O. IN THAT ORDER VIDE PARA 2 HAS RECORDED THAT ASSESSEE HAS FILED DETAILS OF BANK ACCOUNT EXT RACT, NOTE ON BUSINESS ACTIVITIES, HARD COPY OF RETURN OF INCOME, CONFIRMATION LETTERS FOR UNSECURED LOANS AND ACCOUNT COPIES. THE SE DOCUMENTS HAVE BEEN FILED BEFORE THE A.O. AND THEY HAVE BEEN DULY EXAMINED BY THE A.O. BEFORE COMPLETING THE ASSESSMENT. HOWEV ER, LD. COUNSEL FAIRLY ADMITTED THAT LD. CIT IN THE ORDER U NDER SECTION 263 RECORDS THAT NO CONFIRMATIONS WERE AVAILABLE ON REC ORD. IT WAS SUBMITTED THAT ALL THE CONFIRMATIONS, BANK ACCOUNTS WERE PLACED BEFORE THE A.O. AS WELL AS BEFORE THE LD. CIT(A). S INCE THEY HAVE NOT CONSIDERED THE SAME, HE PLACED ON RECORD THE DETAIL S OF INCOME TAX RETURNS OF THE CREDITORS, RELEVANT BANK ACCOUNTS AN D ALSO CONFIRMATION LETTERS INCLUDING LEDGER COPIES WITH A PLEA FOR ADMISSION OF ADDITIONAL EVIDENCE. HE SUBMITTED THAT ASSESSEE HAS NECESSARY EVIDENCE IN SUPPORT OF CASH CREDITS. 5. LEARNED D.R. HOWEVER, RELIED ON THE ORDERS OF T HE AUTHORITIES. 6. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE R IVAL CONTENTIONS. THERE WAS A FINDING BY AO IN THE ASSES SMENT ORDER ORIGINALLY PASSED THAT ASSESSEE FILED RELEVANT CONF IRMATIONS AND ACCOUNT COPIES. EVENTHEN THE CIT INVOKED JURISDICTI ON U/S 263. EVEN THOUGH ASSESSEE HAS NOT CHALLENGED THE SAID OR DER OF CIT, THE A.O. IN OUR OPINION IGNORED CONFIRMATIONS AND OTHER LETTERS FILED BEFORE HIM. THE SAME IS THE CASE WITH LD. CIT(A) AL SO. EVEN THOUGH LD. CIT(A) HAS SENT THE MATTER ON REMAND AND GAVE F OUR REMINDERS TO THE A.O. ULTIMATELY HE THOUGHT IT FIT NOT TO REL Y ON THE REMAND REPORT AND COMPLETE THE APPEAL CONFIRMING THE ADDIT ION, IN SPITE OF HAVING THE EVIDENCE ON RECORD. SINCE THE SAME WAS N OT ACKNOWLEDGED BY CIT(A), ASSESSEE FILED THEM AS ADDI TIONAL EVIDENCE. 4 ITA.NO.1694/HYD/2014 M/S. METICULOUS PROPERTIES LLP, SECUNDERABAD IN THESE CIRCUMSTANCES, WE HAVE NO OTHER OPTION THA N TO SET ASIDE THE ORDER OF THE A.O. AND CIT AND RESTORE THE MATTE R TO THE FILE OF A.O. FOR FRESH ADJUDICATION, AFTER GIVING DUE OPPOR TUNITY TO THE ASSESSEE TO EXPLAIN THE CASH CREDITS. A.O. IS DIREC TED TO EXAMINE THE DOCUMENTS ON RECORD INCLUDING THE ADDITIONAL EVIDEN CE FILED BEFORE US IN CORRECT PERSPECTIVE AND COMPLETE THE ASSESSME NT AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. GROUNDS OF THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT O N 25.03.2015. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD, DATED 25 TH MARCH, 2015 VBP/- COPY TO : 1. M/S. METICULOUS PROPERTIES LLP, UNICORN HOUSE NO .3, BALAJI ENCLAVE, TRANSPORT ROAD, NEAR GUNROCK ENCLAV E DIAMOND POINT, SECUNDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 16 (2), HYDERABAD. 3. CIT(A)-V, HYDERABAD. 4. CIT-IV, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD 6. GUARD FILE