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

ITA 1785/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59148 (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: 2005-2006
• 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; 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.1785/HYD/2011 (ASSESSMENT YEAR 2005-06) 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 20.1.2012 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 16.8.2011 FOR THE A SSESSMENT YEAR 2005-06. 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 .71,360. THIS WAS SITUATED AT PLOT NO.137 TUDA C.MALLAVARAM. HOWEVER, THE SAME WAS NOT DISCLOSED AS HE HAD NOT FILED RETURN O F INCOME TILL DATE OF ITA NO.1785/HYD/2011 SHRI P. MOHANA, TIRUPATI. 2 SEARCH. THE SAME WAS DISCLOSED FOR THE FIRST TIME IN HIS BALANCE SHEET FILED WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSING OFFICER TREATED THE CONSIDERATION OF RS., 71,360 PAID TOWARDS PURCHASE OF VACANT PLOT AS UNEXPLAINED INVESTMENT O F THE ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE TH E CIT(A). BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASSESSE E WAS RECEIVING INCOME BYW AY OF SALARY, AND HE COULD VERY WELL AFF ORD THE INVESTMENT THE CIT(A), FINDING NO MERIT IN THE CONTENTIONS OF THE ASSESSEE AND OBSERVING THAT THE ASSESSEE HAS BEEN MAKING INVESTM ENT IN PURCHASE OF PLOTS YEAR AFTER YEAR, CONFIRMED THE ADDITION MA DE BY THE ASSESSING OFFICER. AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BE FORE 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 R ECEIVED INTEREST INCOME FROM THE DEBTORS TO THE EXTENT OF RS.15,040 DURING THE YEAR AND HENCE HE HAS SUFFICIENT FUNDS FOR MAKING THE IN VESTMENT IN THE PURCHASE OF PLOT FOR RS.71,360. 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 WAS HAVING SALARY INCOME AS WELL AS DEBTORS BASE YIELDING INTEREST INCOME, WHICH IS SUFFICIENT ENOUGH TO MAKE THE INVESTMENT IN QUESTION. MORE SO, IT HAS BEEN STATED THAT THE ASSESSEES ITA NO.1785/HYD/2011 SHRI P. MOHANA, TIRUPATI. 3 WIFE IS A FULL-TIME NURSE EMPLOYED DURING THE YEAR. FURTHER, THE ASSESSEE HAS A CAPITAL OF RS.4,10,668 AS ON 1.4.200 3 AND DEBTORS TO THE EXTENT OF RS.3 LAKHS AS ON 31.3.2004, FROM WHIC H HE RECEIVES INTEREST INCOME. MERELY BECAUSE THE ASSESSEE HAS BE EN MAKING INVESTMENT IN ACQUIRING THE PROPERTIES YEAR AFTER Y EAR, AS OBSERVED BY THE CIT(A), IT CANNOT BE CONCLUDED THAT THE INVESTM ENT MADE IN A PARTICULAR PROPERTY IN AN YEAR IS UNEXPLAINED AND S OURCE FOR EACH ACQUISITION HAS TO BE EXAMINED INDEPENDENTLY. TAKI NG TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE INTO ACCOUNT AND THE FACT THAT THE ASSESSEES WIFE IS ALSO EMPLOYED, WE ARE OF THE OPI NION THAT THE ASSESSEE HAS SUFFICIENT FUNDS FOR THE INVESTMENT, E VEN AFTER INCURRING REASONABLE AMOUNTS TOWARDS HOUSEHOLD EXPENSES. IN T HESE CIRCUMSTANCES, WE FIND NO JUSTIFICATION FOR THE AD DITION OF RS.71,360 MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A), TREATING THE INVESTMENT MADE BY THE ASSESSEE AS UNEXPLAINED. WE ACCORDINGLY DELETE THE SAME, ALLOWING THE GROUNDS OF THE ASSESS EE IN THIS APPEAL. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 20.1.2012 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 20TH 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 CIRCLE, TIRUPATI 3. COMMISSIONER OF INCOME - TAX(APPEALS) VII, HYDERABAD 4. COMMISSIONER OF INCOME - TAX TIRUPATI. 5. THE D.R., ITAT, HYDERABAD. B.V.S.