Income Tax Officer, Ward-5(1), Hyderabad, Hyderabad V. Sri Rajesh Bajaj, Hyderabad

ITA 1815/HYD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6229 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 24-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 02-12-2014
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Business income; Opportunity of being heard; Additional evidence; Corroborative evidences; Assessment record

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIH, ACCOUNTANT MEMBER ITA NO. 1815/HYD/2014 ASSESSMENT YEAR: 2010-11 THE INCOME TAX OFFICER WARD-5(1) HYDERABAD VS. SRI RAJESH BAJAJ PAN ABRPB5897N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.J RAO ASSESSEE BY : SHRI S. RAMA RAO DATE OF HEARING : 07-12-2016 DATE OF PRONOUNCEMENT : 25-01-2017 ORDER PER B. RAMA KOTAIAH, A.M.: THIS IS AN APPEAL BY REVENUE AGAINST THE ORDERS OF CIT(5)-V, HYDERABAD, DATED 18-09-2014. THE REVENUE IS AGGRIEVED MAINLY ON THE ISSUE THAT LD. CIT(A) HAS G IVEN RELIEF WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSI NG OFFICER (A.O) WHILE ADMITTING THE ADDITIONAL EVIDENCE. THE REVENUE AFTER REVISING THE GROUNDS THREE TIMES HAS FINALLY FILED THE FOLLOWING REVISED GROUNDS. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF CA SH DEPOSITS APPEARING IN THE BANKS ACCOUNTS MAINTAINED IN ANDHR A BANK AND IDBI BANK AMOUNTING TO RS.47,81,500/-. 2. THAT THE LEARNED CIT(A) ERRED IN RELYING AN ADDI TIONAL MATERIAL WHICH WERE NOT AVAILABLE IN THE ASSESSMENT RECORDS WHILE DELETING THE ADDITION OF RS.47,81,500/- WITHO UT AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFI CER THEREBY VIOLATING THE RULE 46-A OF THE INCOME TAX RULES. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS .53,79,969/ - 2 ITA NO. 1815/HYD/2014 SRI RAJESH BAJAJ, HYD. TOWARDS UNEXPLAINED INVESTMENT BY WAY OF LOAN TO M/ S. SAI FALKNUMA SERVICE STATION (SFSS). 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS .17,17,490/- AS INTEREST ON LOAN TO M/S. SFSS. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS .6,23,969/- TOWARDS INTEREST ESTIMATED AT 2% ON THE LOANS ADVAN CED TO MOHSIN KHAN, RAJ GOPAL BAJAJ (HUF) AND SUDHAKAR RED DY. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS .2,00,000/- TOWARDS LOAN TO NEHA BAJA WHICH WAS NOT DISCLOSED I N THE BOOKS OF ACCOUNT. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS .14,00,000/- TOWARDS UNEXPLAINED INVESTMENT IN HOUSE PROPERTY AN D FURTHER ERRED IN DELETING THE SAID ADDITION RELYING ON ADDI TIONAL MATERIAL IN VIOLATION OF RULE 46-A OF THE INCOME TAX RULES W ITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFI CER. 2. BRIEFLY STATED ASSESSEE IS AN INDIVIDUAL, AND IS HAVING BUSINESS INCOME. ON RECEIPT OF INFORMATION AND SELE CTION OF CASE UNDER CASS A.O NOTICED THAT ASSESSEE HAS DEPOS ITED CASH INTO HIS BANK ACCOUNTS. IT WAS INFORMED BY TH E ASSESSEE THAT HIS WIFE SMT ANITHA BAJAJ WAS A PARTNER IN M/S. SAI FALAKNUMA SERVICE STATION (SFSS) AND MANY OF THE TRANSACTIONS PERTAIN TO THE SAID FIRM. THE ASS ESSING OFFICER WHILE COMPLETING THE ASSESSMENT HAS RECORDE D AS UNDER: TO EXAMINE ALL THESE AND VERIFY ALL THESE, THE CO MPLETE BANK ACCOUNTS OF M/S. SFSS, SRI GNANESWAR, SMT. ANITA BA NAJ, SRI M. SUDHAKAR REDDY (AN IMPORTANT EMPLOYEE WITH WHOM TRA NSACTIONS ARE FOUND IN ASSESSEES BANK ACCOUNT) AND SRI MOSIN KHA N (AN IMPORTANT EMPLOYEE WITH WHOM TRANSACTIONS ARE FOUND IN ASSESS EES BANK ACCOUNT) NEED TO BE EXAMINED WHICH THE ASSESSEE FAI LED TO SUBMIT DURING THE COURSE OF SCRUTINY PROCEEDINGS. HE HAS ALSO FAILED TO SUBMIT THE SUPPORTING EVIDENCES TO PROVE HIS CLAIMS LIKE STOCK REGISTER, SALES REGISTER, PURCHASE REGISTER, HPCL A CCOUNT, SALE PURCHASE BILLS ETC. BELONGING TO M/S. SFSS. IN ABS ENCE OF ALL THESE ASSESSEES CLAIM THAT THE CASH DEPOSITS IN HIS BANK ACCOUNTS AS UNDER ARE SOURCED FROM M/S. SFSS IS INCORRECT AND HENCE T HE CASH DEPOSITS 3 ITA NO. 1815/HYD/2014 SRI RAJESH BAJAJ, HYD. STAND UNEXPLAINED AND ARE ADDED TO TAXABLE INCOME A S INCOME FROM OTHER SOURCES. HAVING NOTED AS ABOVE THE ASSESSING OFFICER MADE TH E FOLLOWING ADDITIONS TO THE RETURNED INCOME. (I) UNEXPLAINED CASH DEPOSITS RS. 47,81,50 0 AS DISCUSSED ABOVE (II) AMOUNT OF LOAN NOT REFLECTED RS. 53,79,9 69 IN STATEMENT OF AFFAIRS TO M/S. SFSS (III) INTEREST ON LOAN GIVEN TO RS. 17,17,49 0 M/S. SFSS (IV) INTEREST ON OTHER LOANS AS RS. 6,23,9 69 DISCUSSED ABOVE (V) LOAN GIVEN TO NEHA BAJAJ RS. 2,00,000 NOT REFLECTED IN STATEMENT OF AFFAIRS (VI) UNACCOUNTED CASH PAYMENT RS. 14,00,000 FOR FLAT (VII) UNACCOUNTED INTEREST IN RS. 16,527 BANK ACCOUNT (VIII) INCOME FROM CAPITAL GAINS RS. 28,94,310 ON SECURITIES AS DISCUSSED 3. THE LD. CIT(A) IS IN THE IMPUGNED ORDER HAS GIVE N RELIEF ON WHICH THE REVENUE IS AGGRIEVED. 4. THE LD. DR REFERRING TO THE ORDER OF THE ASSESSI NG OFFICER HAS SUBMITTED THAT THE LD. CIT(A) NOT ONLY ADMITTED ADDITIONAL MATERIAL BUT ALSO GAVE RELIEF WHICH COUL D NOT BE CONSIDERED WITHOUT GIVING OPPORTUNITY TO THE ASSESS ING OFFICER. HIS MAIN OBJECTION IS THAT THE ASSESSING OFFICER MADE ADDITIONS WHICH SHOULD HAVE BEEN SUBJECTED TO DETAILED SCRUTINY AND CIT(A) CANNOT GIVE RELIEF WIT HOUT BEING VERIFIED BY AO. 4 ITA NO. 1815/HYD/2014 SRI RAJESH BAJAJ, HYD. 4.1 THE LD. COUNSEL HOWEVER, SUBMITTED THAT THE ASSESSEE HAD FILED INFORMATION BEFORE THE ASSESSING OFFICER ALSO BUT THE SAME WAS NOT CONSIDERED AT THE TIME OF COMPLETING THE ASSESSMENT, THEREFORE, THE LD. CIT(A ) EXERCISED HIS JURISDICTION AND GAVE RELIEF. HE SUP PORTED THE ORDER OF THE LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE PAPER BOOK PLACED ON RECORD BY THE LD. COUNSEL. AS SEEN FROM THE ASSESSMENT ORDER THE ASSESSING OFFICE R HAS MADE VARIOUS ADDITIONS IN THE ABSENCE OF COMPLETE D ETAILS BEING FURNISHED BY THE ASSESSEE. HE HAS VERY CLEAR LY STATED THAT THE ASSESSEE HAS NOT FURNISHED VARIOUS DETAILS IN ORDER TO EXAMINE THE TRANSACTIONS VIS-A-VIS OTHE R PARTIES. WHEN THE NECESSARY DETAILS WERE FILED BEFORE THE LD . CIT(A), THE LD. CIT(A) COULD HAVE REFERRED THE MATTER ON RE MAND TO THE ASSESSING OFFICER FOR EXAMINATION BEFORE ADJUDI CATING THE ISSUES. WE ALSO NOTICE THAT ASSESSEE HAS FILED PAPER BOOK STATING THAT MOST OF THE INFORMATION WAS FILED BEFORE THE CIT(A) AND ALSO ASSESSING OFFICER. THERE WAS NO OBJECTION FROM THE REVENUE ABOUT THAT. WE ARE NOT S URE WHY ASSESSING OFFICER HAS NOT EXAMINED THE DETAILS WHEN THE SAME WERE FURNISHED BEFORE HIM IN THE COURSE OF ASSESSMENT. BE THAT AS IT MAY, SINCE THE REVENUE H AS RAISED THE OBJECTION THAT INFORMATION HAS NOT BEEN FURNISHED BEFORE THE ASSESSING OFFICER AND CIT(A) A DMITTED ADDITIONAL EVIDENCE, WITHOUT GOING INTO MERITS OF A DDITIONS MADE BY THE ASSESSING OFFICER AND DELETIONS MADE BY CIT(A), WE ARE OF THE OPINION THAT ASSESSEES CONT ENTIONS SHOULD BE EXAMINED THOROUGHLY AND TRANSACTIONS UNDE R 5 ITA NO. 1815/HYD/2014 SRI RAJESH BAJAJ, HYD. TAKEN BY HIM THROUGH HIS BANK ACCOUNT REQUIRE RECONCILIATION WITH THE RETURNS OF OTHER PERSONS ON WHOSE BEHALF THE TRANSACTIONS WERE UNDER TAKEN. IN ORDER TO DO THAT EXERCISE AND COMPLETE THE ASSESSMENT AS PER TH E FACTS AND LAW, WE ARE OF THE OPINION THAT THE ORDERS OF THE ASSESSING OFFICER AND CIT(A) ARE REQUIRED TO BE SET ASIDE. ACCORDINGLY THE IMPUGNED ORDER OF THE CIT(A) AS WEL L AS THE ASSESSMENT ORDER OF THE ASSESSING OFFICER ARE HEREB Y SET ASIDE. ASSESSING OFFICER IS DIRECTED TO COMPLETE T HE ASSESSMENT AFTER GIVING DUE OPPORTUNITY TO ASSESSEE AND EXAMINING THE EVIDENCE FILED. WITH THESE OBSERVATI ONS THE APPEAL PREFERRED BY THE REVENUE IS CONSIDERED ALLOW ED FOR STATISTICAL PURPOSES 6. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2017. SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 25 TH JANUARY, 2017 KRK 1) SRI RAJESH BAJAJ, FLAT NO. 5A, GOLAMUDI RESIDENCY JAIHIND ENCLAVE, MADHAPUR, HYD 500 081. 2) ITO, WARD -5(1), HYDERABAD 3) CIT -V, HYDERABAD 4) ACIT,RANGE-5, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE