P.Mohana, Tirupathi V. DCIT, Central Circle, Tirupathi

ITA 1784/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59158 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 17-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T DIWAKAR PRASAD
• Assessee Lawyers: E PHALGUNA KUMAR
• Keywords: Unexplained investment; Gift; Search and seizure; Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBE R. ITA NO.1784/HYD/2011 (ASSESSMENT YEAR 2004-05) SHRI P. MOHANA, TIRUPATI (PAN - AQHPM 5926 G ) V/S DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE, TIRUPATI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI E.PHALGUNA KUMAR RESPONDENT BY : SHRI T.DIWAKAR PRASAD DATE OF HEARING 22. 11.2011 DATE OF PRONOUNCEMENT 20.01.2012 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(A)-VII, HYDERABAD DATED 12.8.2011 FOR THE A SSESSMENT YEAR 2004-05. 2. FACTS OF THE CASE IN BRIEF ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION UNDER S.132 OF THE INCOME-TAX ACT , 1961, CONDUCTED IN THE PREMISES OF M/S. MG BROTHERS AND RELATED GRO UP CONCERNS ON 25.7.2008. ASSESSEE IS AN EMPLOYEE OF M/S. MG BROT HERS AUTOMOBILES PVT. LTD. AND CERTAIN INCRIMINATING DOCUMENTS RELAT ING TO THE ASSESSEE WERE SEIZED. THEREFORE, THE ASSESSING OFFICER ISSUE D A NOTICE UNDER S.153C OF THE ACT, 1961 TO THE ASSESSEE, AND COMPLE TED THE ASSESSMENT, WHICH GAVE RISE TO THE PRESENT APPELLAT E PROCEEDINGS BEFORE THIS TRIBUNAL. 3. THE ASSESSEE HAS PURCHASED A VACANT PLOT FOR RS .1,67,910. THIS WAS SITUATED AT PLOT NO.23 TUDA AT AVILALA. TH E SAME WAS DISCLOSED FOR THE FIRST TIME IN HIS BALANCE SHEET FILED WITH THE RETURN OF ITA NO.1784/HYD/2011 SHRI P. MOHNA, TIRUPATI. 2 INCOME FOR THE ASSESSMENT YEAR 2006-07. THE ASSESS ING OFFICER TREATED THE CONSIDERATION OF RS.1,67,910 PAID TOWAR DS PURCHASE OF VACANT PLOT AS UNEXPLAINED INVESTMENT OF THE ASSESS EE. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE T HE CIT(A). BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASSESSE E HAD TAKEN A LOAN OF RS.1 LAKH FROM LIC AND THE BALANCE AMOUNT WAS PA ID OUT OF HIS SAVINGS AND THEREFORE, IT WAS PLEADED THAT THE ADDI TION BY WAY OF UNEXPLAINED INVESTMENT MADE BY THE ASSESSING OFFICE R SHOULD BE DELETED. THE CIT(A) WAS OF THE OPINION THAT THE A SSESSEE WAS NOT HAVING ENOUGH SAVINGS AVAILABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, SINCE THE ASSESSEE HAS JUST MADE AN INVESTMENT OF RS.34,500 FOR THE PREVIOUS ASSESSMENT YEAR AND THER EFORE, IT COULD NOT BE POSSIBLE FOR HIM TO MAKE A FURTHER INVESTMENT DU RING THE PREVIOUS YEAR. HAVING CONSIDERED TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HELD THAT RS.1 LAKH MAY BE TAKEN A S EXPLAINED INVESTMENT AND TREATED THE BALANCE OF RS.67,910 AS UNEXPLAINED, AS THERE WAS NO PROPER EVIDENCE FOR THE SOURCE OF INV ESTMENT BY THE ASSESSEE TO THAT EXTENT. HENCE, THE ASSESSEE HAS G OT A PARTIAL RELIEF OF RS.1 LAKH AND THE CONSEQUENTLY, ADDITION ON ACCOUN T OF UNEXPLAINED INVESTMENT TO THE EXTENT OF RS.67,910 WAS CONFIRMED BY THE CIT(A). AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BEFORE US. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE , SHRI PHALGUNA RAO, SUBMITTED THAT THE ASSESSEE HAD A CAP ITAL OF RS.4,10,668 AS ON 1.4.2003. FURTHER, THE ASSESSEE HAS DEBTORS TO THE EXTENT OF RS.3 LAKHS AS ON 31.3.2004. THE ASSESSEE HAD ALSO WORKED WITH JANA CHAITANYA HOUSING PVT. LTD. FROM 1996 TO 2002 FOR WHICH PERIOD, HE HAS RECEIVED SALARY. THE ASSESSEE ALSO RECEIVED INTEREST INCOME FROM THE DEBTORS TO THE EXTENT OF RS.15,040 DURING THE YEAR AND HENCE HIS SALARY AND INTEREST INCOME ALONE ARE SUFFICIENT TO COVER ITA NO.1784/HYD/2011 SHRI P. MOHNA, TIRUPATI. 3 UP THE SUM OF RS.67,910. IT WAS POINTED OUT THAT T HE ASSESSING OFFICER ERRED IN PREPARING THE ASSESSMENT ORDER BASED ONLY ON THE REPLY TO QUESTION NO.34 OF THE SWORN STATEMENT. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED BEFORE US THAT THE ASSESSIN G OFFICER HAS NOT ACCEPTED THE PLEA OF THE ASSESSEE THAT HE HAS RECEI VED GIFTS TO THE EXTENT OF RS.75,000 AT THE TIME OF HIS MARRIAGE, ON THE GROUND THAT IT WAS CONTRARY TO REPLY GIVEN BY THE ASSESSEE TO QUE STIONS NO.16 TO 18 OF HIS SWORN STATEMENT. THE ANSWERS TO QUESTION NOS . 16 TO 18, ACCORDING TO THE LEARNED COUNSEL, WAS ONLY THAT THE ASSESSEE DID NOT RECEIVE ANY DOWRY/STREE-DHAN AT THE TIME OF MARRIAG E, AND THE SAME DO NOT DISPROVE THE VERSION OF THE ASSESSEE WITH RE GARD TO RECEIPT OF GIFTS BY THE ASSESSEE ON THE OCCASION OF MARRIAGE F ROM HIS RELATIVES AND FRIENDS, AS CLAIMED BY HIM. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI D IWAKAR PRASAD, ON THE OTHER HAND, OPPOSED THE ABOVE SUBMIS SIONS AND RELIED ON THE ORDER OF THE CIT(A). 7. WE HEARD BOTH PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS FURNISHED A COPY OF T HE VIJAYA BANK STATEMENT FROM 1.4.2001, WHICH CONTAINS DETAILS OF SALARY RECEIPTS FROM JANA CHAITANYA HOUSING PRIVATE LIMITED AS WEL L AS RECEIPTS AND PAYMENTS IN RELATION TO DEBTORS. THIS IS CONCLUSIVE PROOF THAT THE ASSESSEE WAS IN RECEIPT OF SALARY INCOME AND INTERE ST INCOME FROM DEBTORS. MORE SO, IT HAS BEEN STATED THAT THE ASSES SEES WIFE IS A FULL- TIME NURSE EMPLOYED DURING THE YEAR. FURTHER, THE ASSESSEE HAS A CAPITAL OF RS.4,10,668 AS ON 1.4.2003 AND DEBTORS T O THE EXTENT OF RS.3 LAKHS AS ON 31.3.2004, FROM WHICH HE RECEIVES INTEREST INCOME. TAKING TOTALITY OF FACTS AND CIRCUMSTANCES OF THE C ASE INTO ACCOUNT AND THE FACT THAT THE ASSESSEES WIFE IS ALSO EMPLOYED, WE ARE OF THE OPINION THAT THE ASSESSEE HAS SUFFICIENT FUNDS FOR THE INVESTMENT, EVEN ITA NO.1784/HYD/2011 SHRI P. MOHNA, TIRUPATI. 4 AFTER INCURRING REASONABLE AMOUNTS TOWARDS HOUSEHO LD EXPENSES. IN THESE CIRCUMSTANCES, WE FIND NO JUSTIFICATION EVEN FOR THE ADDITION OF RS.67,910 SUSTAINED BY THE CIT(A), OUT OF THE TOTAL ADDITION OF RS.1,67,910 MADE BY THE ASSESSING OFFICER TOWARDS U NEXPLAINED INVESTMENT MADE BY THE ASSESSEE. WE ACCORDINGLY D ELETE THE SAME, ALLOWING THE GROUNDS OF THE ASSESSEE IN THIS APPEAL . 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 20.01.2012 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 20 TH JANUARY, 2012 COPY FORWARDED TO: 1. SHRI P.MOHANA, D. NO. 10-69/7, FLAT NO.B-4, GOLD S TAR MERIDIAN, MARUTHI NAGAR, TIRUPATI. 2. DY. COMMISSIONER OF INCOME - TAX CENTRAL CI RCLE , TIRUPATI 3. COMMISSIONER OF INCOME-TAX(APPEALS) VII, HYDERAB AD 4. COMMISSIONER OF INCOME - TAX TIRUPATI . 5. THE D.R., ITAT, HYDERABAD. B.V.S.