Gonugunta Venkateswarlu , Kandukur V. Income Tax Officer, Ward-2, Ongole

ITA 1796/Hyd/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3869 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 29-10-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tangible material; Assessment record; Revised return; Reassessment proceedings; Set aside
• Section: 40A(3); 143(3); 201; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC) : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER (THROUGH VIRTUAL CONFERENCE) I.T.A. NO. 1796 /HYD/201 8 ASSESSMENT YEAR: 20 0 8 - 0 9 GONUGUNTA VENKATESWARLU, KANDUKUR. PAN AOYPG 6548R VS INCOME - TAX OFFICER, WARD 2, ONGOLE. (APPELLANT) (RESPONDENT) DATE OF HEARING : 29 - 10 - 20 20 DATE OF PRONOUNCEMENT : 03 - 1 1 - 20 20 O R D E R THIS IS ASSESSEE S APPEAL FOR THE AY 20 0 8 - 0 9 AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR , DATED 2 2 / 0 6 / 201 8 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, IS ENGAGED IN THE BUSINESS OF REAL ESTATE. HE FILED HIS RETURN OF INCOME FOR THE RELEVANT AY 2008 - 09 ON 05/12/2008 ADMITTING INCOME OF RS. 1,35,940/ - AND RS. 20,000/ - FROM AGRICULTURE. THEREAFTE R, THE ASSESSEE FILED REVISED RETURN ON 01/03/2010 SHOWING INCOME OF RS. 9,35,940/ - FROM BUSINESS ACTIVITY AND RS. FOR REVENUE : SHRI K.A. SAI PRASAD FOR ASSESSEE : SHRI SUBRAMANYAM T. ITA NO. 1796 /HYD/201 8 GONUGUNTA VENKATESWARLU, KANDUKUR . : - 2 - : 20,000/ - FROM AGRICULTURE. THE RETURN WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE IT ACT ON 06/12/2010. THER EAFTER, THE AO WAS OF THE OPINION THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT AND, THEREFORE, HE ISSUED A NOTICE U/S 148 ON 26/11/2012 AND DURING THE REASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT, THE AO HAD DISALLOWED A SUM OF RS. 8 ,21,960/ - U/S 40A(3) OF THE ACT. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) BOTH AGAINST 147 PROCEEDINGS AS WELL AS THE ADDITION MADE U/S 40A(3) OF THE ACT. 4. THE CIT(A), HOWEVER, CONFIRMED THE ASSESSMENT ORDER AND, THEREFORE, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO PROPERLY APPRECIATE THE FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) IS NOT JUSTIFIED IN REJECTING THE APPELLANT'S GROUND REGARDING INITIATING OF PROCEEDINGS U/S 147. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IS NOT JUSTIFIED IN REJECTING THE APPELLANT'S G ROUND AGAINST THE APPLICATION OF PROVISIONS OF SECTION 40A(3). 4. THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND, DELETE OR SUBSTITUTE ANY GROUND OR GROUNDS DURING THE COURSE OF HEARING. ITA NO. 1796 /HYD/201 8 GONUGUNTA VENKATESWARLU, KANDUKUR . : - 3 - : 5. AS FAR AS GROUND NO. 2 AGAINST 147 PROCEEDINGS IS CONCERNED, TH E LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH THE ASSESSMENT HAS BEEN REOPENED U/S 147 BY ISSUING A NOTICE U/S 148 WITHIN A PERIOD OF 4 YEARS FROM THE END OF RELEVANT AY, THE AO DID NOT HAVE ANY FRESH TANGIBLE MATERIAL, WHICH HAS COME TO HIS NOTICE AFTER COMPLETION OF ASSESSMENT PROCEEDINGS , TO INITIATE PROCEEDINGS U/S 147 OF THE ACT. IN SUPPORT OF HIS CONTENTION THAT THE AO HAS NOT FOUND ANY FRESH MATERIAL FOR COMING TO THE CONCLUSION THAT THE INCOME HAS ESCAPED ASSESSMENT AND THAT IN SUCH CIRCUMSTANCES, ASSESSMENT CANNOT BE REOPENED, HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: 1. PR. CIT VS. SMT. SANTOSH JAIN, 296 ITR 324 (P&H). 2 PR. CIT VS. JADAU JEWELLERS AND MANUFACTURERS (P) LTD., 409 ITR 8 5 (RAJ.) 3. CIT VS. BANWARI LAL BASHIDHAR, 229 ITR 229 (ALL.) 6. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT THE AO DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, ACCEPT ED THE RETURNED INCOME OF THE ASSESSEE , AND IT WAS ONLY SUBSEQUENTLY T HAT THE INCUMBENT AO , ON VERIFICATION OF THE CASH BOOK FILED BY THE ASSESSEE , FOUND THAT THE ASSESSEE HAS MADE CASH PAYMENTS AND THEREFORE DISALLOWANCE U/S 40A(3) OUGHT TO HAVE BEEN MADE. THEREFORE, ACCORDING TO HIM, THE AO HAD TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME OF THE ASSESSEE. HE, THEREFORE, PRAYED FOR CONFIRMATION OF THE ASSESSMENT ORDER. ITA NO. 1796 /HYD/201 8 GONUGUNTA VENKATESWARLU, KANDUKUR . : - 4 - : 7. HAVING GONE THROUGH THE MATERIAL ON RECORD AND HAVING CONSIDERED THE RIVAL CONTENTIONS, I FIND THAT THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT AFTER CONSIDERING THE ASSESSEES SUBMISSIONS AND CASH BOOK AND THEREAFTER , ESTIMAT ED THE INCOME . T HEREFORE, THE AO HAS CONSIDERED THE CASH BOOK BEFORE ESTIMATING THE INCOME AND IT IS ALSO EVIDENT THAT THE SUBSEQUENT INCUMBENT AO DID NOT HAVE ANY FRESH TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME IN THE CASE OF ASSESSE E. HE HAS VERIFIED THE VERY SAME ASSESSMENT RECORDS TO FORM AN OPINION THAT THERE WAS ESCAPEMENT OF INCOME. IN SUCH CIRCUMSTANCES, THE DECISIONS CITED BY THE ASSESSEE ARE CLEARLY APPLICABLE AND RESPECTFULLY FOLLOWING THE SAME, I HOLD THAT THE REASSESSMENT ORDER PASSED U/S 147 OF THE ACT IS NOT SUSTAINABLE AND, THEREFORE, THE SAME IS HEREBY QUASHED. SINCE THE REASSESSMENT PROCEEDINGS HAVE BEEN SET ASIDE, CONSEQUENTIAL ADDITION MADE BY THE AO NEED NOT BE ADJUDICATED AT THIS STAGE AS IT WILL ONLY RESULT IN AC ADEMIC EXERCISE . 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER P RONOUNCED IN THE OPEN COURT ON 3 RD NOVEMBER , 20 20 . SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER HYDE RABAD, DATED : 3 RD NOVEMBER , 20 20 . KV ITA NO. 1796 /HYD/201 8 GONUGUNTA VENKATESWARLU, KANDUKUR . : - 5 - : COPY TO : 1. SHRI GONUGUNTA VENKATESWARLU, C/O CH. PARTHASARATHY & CO., 1 - 1 - 298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST. NO. 1, ASHOKNAGAR, HYDERABAD 500 020. 2. THE ITO, WARD 2, ONGOLE 3 . CIT(A PPEALS ) - 1 , GUNTUR 4 . THE PR. CIT , GUNTUR 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE. S.NO. DETAILS DATE 1 DRAFT DICTATED ON 2 DRAFT PLACED BEFORE AUTHOR 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER