Panni Bai, Secunderabad, Hyderabad V. ITO, Ward-10(2), Hyderabad, Hyderabad

ITA 177/HYD/2015

• Counselvise Citation: 17722514 RSA 2015
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 23-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: LAXMINIVAS SHARMA
• Keywords: Unexplained investment; Recovery proceedings
• Section: 142(1); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.177/HYD/2015 ASSESSMENT YEAR 2005-2006 SMT. PANNI BAI SECUNDERABAD. PAN BGUPD4096A VS. THE INCOME TAX OFFICER WARD-10(2), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. LAXMINIVAS SHARMA FOR REVENUE : MR. RAMAKRISHNA BANDI DATE OF HEARING : 19.05.2015 DATE OF PRONOUNCEMENT : 03.06.2015 ORDER PER P.M. JAGTAP, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-VI, HYDERABAD D ATED 14.11.2014. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDU AL. AS PER THE INFORMATION RECEIVED BY THE A.O., THE AS SESSEE HAD MADE INVESTMENT OF RS.35,87,849 IN PURCHASE OF IMMO VABLE PROPERTY DURING THE YEAR UNDER CONSIDERATION. AS NO RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR THE SAID YEAR, NOTICE UNDER SECTION 142(1) WAS ISSUED BY THE A.O. ON 24.0 8.2007 CALLING FOR SUCH RETURN. THERE WAS HOWEVER NO RESPO NSE FROM THE ASSESSEE EITHER TO THE SAID NOTICE ISSUED BY TH E A.O. AS WELL AS THE SUBSEQUENT NOTICE ISSUED BY HIM. THE ASSESSE E ALSO DID NOT OFFER ANY EXPLANATION AS REGARDS THE INVESTMENT FOUND TO BE MADE IN THE PURCHASE OF IMMOVABLE PROPERTY DESPI TE 2 ITA.NO.177/HYD/2015 SMT. PANNI BAI, SECUNDERABAD. SUFFICIENT OPPORTUNITY AFFORDED BY THE A.O. THE A.O . THEREFORE, PROCEEDED TO MAKE THE ASSESSMENT EXPARTE TO THE BES T OF HIS JUDGMENT UNDER SECTION 144 AND IN THE ASSESSMENT SO MADE VIDE ORDER DATED 24.12.2007, THE INVESTMENT MADE BY THE ASSESSEE IN PURCHASE OF IMMOVABLE PROPERTY WAS BROU GHT TO TAX BY THE A.O. IN THE HANDS OF THE ASSESSEE TREATI NG THE SAME AS UNEXPLAINED UNDER SECTION 69 OF THE ACT. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECT ION 144, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) CHALLENGING THE VALIDITY OF THE ASSESSMENT M ADE BY THE A.O. EXPARTE AS WELL AS DISPUTING THE ADDITION MADE THEREIN ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT MADE IN T HE IMMOVABLE PROPERTY. AS REGARDS THE VALIDITY OF THE ASSESSMENT, IT WAS SUBMITTED BY THE ASSESSEE THAT NONE OF THE N OTICES ISSUED BY THE A.O. HAD BEEN SERVED UPON HER BECAUSE THERE WAS A CHANGE OF ADDRESS. IT WAS POINTED OUT THAT EV EN THE ASSESSMENT ORDER WAS OBTAINED BY THE ASSESSEE FROM THE A.O. ONLY DURING THE COURSE OF RECOVERY PROCEEDINGS. IT WAS CONTENDED THAT THE ASSESSMENT MADE BY THE A.O. UNDE R SECTION 144 WITHOUT SERVICE OF MANDATORY NOTICE UND ER SECTION 142(1), THEREFORE, WAS NOT VALID IN THE EYE OF LAW. 4. AS REGARDS THE ADDITION MADE UNDER SECTION 69 O N ACCOUNT OF ALLEGED INVESTMENT MADE IN THE IMMOVABLE PROPERTY, IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT (A) THAT THERE WAS NO SUCH INVESTMENT MADE BY THE ASSESSEE D URING THE YEAR UNDER CONSIDERATION AND ACTUALLY THERE WAS A S ALE OF PROPERTY BY THE ASSESSEE DURING THE YEAR UNDER CONS IDERATION. THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM WER E FORWARDED BY THE LD. CIT(A) TO THE A.O. FOR HIS COM MENTS. IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(A), THE A.O. 3 ITA.NO.177/HYD/2015 SMT. PANNI BAI, SECUNDERABAD. REPORTED THAT THE NOTICE UNDER SECTION 142(1) WAS D ULY SERVED ON THE ASSESSEE AND THE COPY OF ACKNOWLEDGMENT DATE D 26.10.2007 AS PROOF OF SERVICE OF NOTICE WAS AVAILA BLE ON RECORD. KEEPING IN VIEW THIS SPECIFIC ASSERTION MAD E BY THE A.O., WHICH THE ASSESSEE FAILED TO REBUT, THE LD. C IT(A) HELD THAT THE ORDER PASSED BY THE A.O. UNDER SECTION 144 WAS VALID. AS REGARDS THE STAND OF THE ASSESSEE THAT NO INVEST MENT WAS MADE BY HIM IN THE IMMOVABLE PROPERTY DURING THE YE AR UNDER CONSIDERATION AND THERE WAS IN FACT A SALE OF IMMOV ABLE PROPERTY BY HIM, THE A.O. FOUND THE SAME TO BE CORR ECT ON VERIFICATION OF THE RELEVANT RECORD. HE HOWEVER STA TED IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(A) THAT THE CONSIDERATION SHOWN IN THE SALE DEED DATED 23.09.20 04 WAS RS.20 LAKHS ONLY AS AGAINST THE MARKET VALUE INDICA TED AT RS.35,87,849 AS PER THE SRO. ACCORDING TO THE A.O., THE CAPITAL GAIN ARISING FROM SALE OF PROPERTY THUS WAS CHARGEABLE TO TAX IN THE YEAR UNDER CONSIDERATION. 5. AFTER HAVING CONSIDERED THE REMAND REPORT SUBMITTED BY THE A.O., THE LD. CIT(A) DELETED THE A DDITION MADE BY THE A.O. UNDER SECTION 69 ON ACCOUNT OF UNE XPLAINED INVESTMENT ALLEGEDLY MADE BY THE ASSESSEE IN THE IM MOVABLE PROPERTY AS IT WAS ACCEPTED BY THE A.O. HIMSELF THA T THERE WAS NO SUCH INVESTMENT ACTUALLY MADE BY THE ASSESSEE DU RING THE YEAR UNDER CONSIDERATION. AS REGARDS THE STAND OF T HE A.O. THAT THE ASSESSEE WAS LIABLE TO PAY TAX ON THE CAPITAL G AIN ARISING FROM THE SALE OF THE PROPERTY, THE LD. CIT(A) OBSER VED THAT THE A.O. WAS FREE TO ASSESS SUCH CAPITAL GAIN, IF ANY, ARISING OUT OF THE SALE DEED DATED 23.09.2004. ACCORDINGLY, HE TRE ATED THE APPEAL OF THE ASSESSEE AS PARTLY ALLOWED VIDE HIS A PPELLATE 4 ITA.NO.177/HYD/2015 SMT. PANNI BAI, SECUNDERABAD. ORDER DATED 14.11.2014 WHICH IS IMPUGNED BY THE ASS ESSEE IN THE PRESENT APPEAL FILED BEFORE THE TRIBUNAL. 6. WE HAVE HEARD BOTH THE SIDES AND ALSO PERUSED T HE RELEVANT MATERIAL ON RECORD. ALTHOUGH AS MANY AS SI X GROUNDS ARE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL, T HE LD. COUNSEL FOR THE ASSESSEE, AT THE TIME OF HEARING BE FORE US, HAS RAISED ONLY TWO ISSUES. FIRSTLY, HE HAS CONTENDED T HAT THE ISSUE RAISED IN THE APPEAL FILED BY THE ASSESSEE BEFORE T HE LD. CIT(A) WAS LIMITED TO THE ADDITION UNDER SECTION 69 ON ACC OUNT OF UNEXPLAINED INVESTMENT ALLEGEDLY MADE BY THE ASSESS EE IN THE IMMOVABLE PROPERTY AND THE LD. CIT(A) WAS NOT REQUI RED TO GIVE ANY FINDING OR DIRECTION ON THE ISSUE OF CAPITAL GA IN THAT MIGHT ARISE TO THE ASSESSEE FROM THE SALE OF PROPERTY VID E THE SALE DEED DATED 23.09.2004. SECONDLY, HE HAS CONTENDED T HAT THE SOLITARY ISSUE INVOLVED IN THE APPEAL OF THE ASSESS EE RELATING TO THE ADDITION UNDER SECTION 69 HAVING BEEN DECIDED B Y THE LD. CIT(A) IN FAVOUR OF THE ASSESSEE, THE ULTIMATE RESU LT INDICATED BY HIM IN HIS IMPUGNED ORDER THAT THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED IS NOT CORRECT. 7. AFTER HAVING PERUSED THE RELEVANT RECORD INCLUD ING THE IMPUGNED ORDER OF THE LD. CIT(A), WE ARE UNABLE TO ACCEPT THE CONTENTIONS RAISED BY THE LD. COUNSEL FOR THE A SSESSEE. WE FIND THAT THE LD. CIT(A) IN HIS IMPUGNED ORDER HAS NOT GIVEN ANY FINDING OR DIRECTION ON THE ISSUE OF CAPITAL GA IN AND WHAT HE HAS MERELY OBSERVED IS THAT THE A.O. IS FREE TO ASSESS THE CAPITAL GAINS, IF ANY, ARISING FROM THE SALE OF PRO PERTY BY THE ASSESSEE. THERE IS THUS NO DIRECTION OR DECISION GI VEN BY THE LD. CIT(A) ON THIS ISSUE AND THE ASSESSEE, IN OUR O PINION, CANNOT BE SAID TO HAVE ANY GRIEVANCE BY A MERE OBSE RVATION RECORDED BY THE LD. CIT(A). 5 ITA.NO.177/HYD/2015 SMT. PANNI BAI, SECUNDERABAD. 8. AS REGARDS THE SECOND CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE, WE FIND THAT BESIDES THE ISSUE RELATING TO THE ADDITION UNDER SECTION 69, A PRELIM INARY ISSUE WAS ALSO RAISED BY THE ASSESSEE IN HIS APPEAL CHALL ENGING THE VALIDITY OF THE ASSESSMENT MADE BY THE A.O. UNDER S ECTION 144. SINCE THIS PRELIMINARY ISSUE WAS DECIDED BY THE LD. CIT(A) VIDE HIS IMPUGNED ORDER DATED 14.11.2014 AGAINST THE ASS ESSEE UPHOLDING THE VALIDITY OF THE ASSESSMENT MADE BY TH E A.O. UNDER SECTION 144, THE APPEAL OF THE ASSESSEE WAS R IGHTLY TREATED BY HIM AS PARTLY ALLOWED. WE THEREFORE FIND NO MERIT IN BOTH THE CONTENTIONS RAISED BY THE LD. COUNSEL FOR THE ASSESSEE AND REJECTING THE SAME, WE DISMISS THE APPEAL FILED BY THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.06.2 015. SD/- SD/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 03 RD JUNE, 2015. VBP/- COPY TO 1. SMT. PANNI BAI, SECUNDERABAD. C/O. M/S. LAXMINI WAS & JAIN, 5-4-726, STATION ROAD, NAMPALLY, HYDERABAD-00 1. 2. THE INCOME TAX OFFICER, WARD-10(2), HYDERABAD. 3. COMMISSIONER OF INCOME TAX (APPEALS)-VI, 6A, I.T . TOWERS, A.C. GUARDS, HYDERABAD 500 004. 4. COMMISSIONER OF INCOME TAX-V, HYDERABAD. 5. D.R. I.T.A.T. A BENCH, HYDERABAD. 6. GUARD FILE