Yedlapalli Subba Rao, Eluru V. THE ITO, WARD - 2, Eluru

ITA 192/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0169 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 27-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A NARAYANA RAO
• Keywords: Unexplained investment; Revised return
• Section: 143(3); 142(1); 133A; 69; 148

Judgement Text

ITA NO.192/VIZAG/2013 YELAPALLI SUBBA RAO, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.192/VIZAG/2013 ( / ASSESSMENT YEAR : 2003-04 ) YEDLAPALLI SUBBA RAO ELURU VS. ITO WARD - 2, ELURU [ PAN : AANPY 4801E ] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / APPELLANT BY : SHRI G.V.N. HARI, AR '(& ) / RESPONDENT BY : SHRI A. NARAYANA RAO, DR ) - / DATE OF HEARING : 16.11.2015 ) - / DATE OF PRONOUNCEMENT : 04.12.2015 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-11, MUMBAI, CAMP AT VISAKHAPATNAM DATED 8.1. 2013 FOR THE ASSESSMENT YEAR 2003-04. ITA NO.192/VIZAG/2013 YELAPALLI SUBBA RAO, ELURU 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 ON 30.9.2003 DECLARING A TOTAL INCOME OF RS.1,42,220/-, BESIDES AGRICULTURAL INCOME OF RS.25,000/-. THERE WAS A SURVEY OPERATION U/S 133A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) ON 30.1 1.2005. CONSEQUENT TO THE SURVEY OPERATION, THE CASE WAS REOPENED BY ISSU ING NOTICE U/S 148 OF THE ACT. IN RESPONSE TO NOTICE U/S 148 OF THE A CT, THE ASSESSEE FILED A REVISED RETURN ON 9.1.2006 DECLARING A TOTAL INCOME OF RS.1,52,720/- AND AGRICULTURAL INCOME OF RS.25,000/-. THE CASE WAS S ELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY NOTICE U/S 142(1) AND 14 3(2) OF THE ACT WERE ISSUED. IN RESPONSE TO NOTICE, THE ASSESSEES AUTHORISED REPRESENTATIVE APPEARED FROM TIME TO TIME AND SUBMI TTED THE DETAILS CALLED FOR. THE A.O. AFTER EXAMINING THE DETAILS F URNISHED BY THE ASSESSE, COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT AND DETERMINED THE TOTAL INCOME OF RS.3,08,226/- AND AG RICULTURAL INCOME OF RS.25,000/-, THEREBY, MADE ADDITIONS OF RS.29,800/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY, RS.85,500/- TOWARDS UNE XPLAINED INVESTMENTS IN PURCHASE OF AGRICULTURAL LAND, RS.15 ,000/- TOWARDS INVESTMENT IN CAPITAL OF M/S. LAKSHMI HARDWARE U/S 69 OF THE ACT AND ALSO ADDITION OF RS.60,000/- TOWARDS LOW HOUSEHOLD EXPENSES. ITA NO.192/VIZAG/2013 YELAPALLI SUBBA RAO, ELURU 3 3. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), DE SPITE REPEATED OPPORTUNITIES OF HEARING, THE ASSESSEE NEITHER APPE ARED NOR PRODUCED ANY DETAILS. THEREFORE, THE CIT(A) AFTER CONSIDERI NG THE MATERIALS AVAILABLE ON RECORD, DECIDED THE ISSUE ON MERITS AN D DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED BY THE CIT (A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE A.R. OF THE ASSESSE, SUBMITTED THAT THE CIT( A) WAS ERRED IN DISMISSING THE ASSESSEES APPEAL ON THE GROUND THAT THE ASSESSEE HAS NOT APPEARED ON VARIOUS OCCASIONS. THE A.R. FURTHE R SUBMITTED THAT THE ASSESSEE HAS MADE A DETAILED WRITTEN SUBMISSIONS ON 20.6.2011, WHEREIN HE HAD CONTENDED THE ISSUES ON MERITS AND S UBMITTED THE DETAILS BEFORE THE CIT(A). THE A.R. FURTHER SUBMIT TED THAT THE ASSESSING OFFICER ERRED IN MAKING ADDITIONS OF RS.7,865/- UND ER THE HEAD INCOME FROM HOUSE PROPERTY BEING DISALLOWANCE OF MUNICIPAL TAXES PAID. THE A.R. SUBMITTED THAT THE ASSESSEE HAS PAID MUNICIPAL TAXES ON THE HOUSE PROPERTY AND THE DETAILS BEING LEDGER EXTRACT OF CA PITAL ACCOUNT AND ALSO LETTER OBTAINED FROM THE MUNICIPAL AUTHORITIES HAS BEEN SUBMITTED BEFORE THE ASSESSING OFFICER. HOWEVER, THE A.O. IGNORED T HE EVIDENCE FURNISHED BY THE ASSESSEE AND MADE THE ADDITIONS WITHOUT ANY BASIS. THE A.R. ITA NO.192/VIZAG/2013 YELAPALLI SUBBA RAO, ELURU 4 FURTHER SUBMITTED THAT AS FAR AS THE UNEXPLAINED IN VESTMENT OF RS.85,500/- IS CONCERNED THE ASSESSEE HAS PURCHASED AGRICULTURAL LAND, OUT OF THE PAST AGRICULTURAL INCOME DECLARED IN EAR LIER YEARS. THEREFORE, THE A.O. WAS NOT CORRECT IN TREATING THE INVESTMENT IN AGRICULTURAL LAND AS UNEXPLAINED. THE A.R. FURTHER SUBMITTED THAT TH E A.O., WHILE DISBELIEVING THE ASSESSEES CLAIM OF AGRICULTURAL I NCOME, SHOULD NOT HAVE TAXED AGRICULTURAL INCOME OF RS.25,000/- ADMITTED B OTH FOR THIS ASSESSMENT YEAR AND ALSO FOR THE ASSESSMENT YEAR 20 04-05. THE A.R. FURTHER SUBMITTED THAT THE ASSESSEE IS HAVING 5.5 A CRES OF AGRICULTURAL LAND WHEREIN HE IS CULTIVATING PADDY. THE FACT IS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED A COPY OF THE PURCHASE BILL ISSUED BY M/S. HANUMAN TRADERS, WHICH IS RUNNING A RICE MILL FOR HAVING PURCHASED THE PADDY FOR AN AMOUNT O F RS.1,29,000/-. THEREFORE, THE ASSESSEE HAD SOURCE FOR INVESTMENTS IN PURCHASE OF AGRICULTURAL LAND AND IT CANNOT BE CONSIDERED AS UN EXPLAINED INVESTMENT AND BROUGHT TO TAX U/S 69 OF THE ACT. THE A.R. SUB MITTED THAT AS REGARDS THE INVESTMENT IN CAPITAL ACCOUNT OF M/S. L AKSHMI HARDWARE IS CONCERNED, THE A.O. MADE THE ADDITIONS IN A CASUAL MANNER IGNORING THE EXPLANATIONS FURNISHED BY THE ASSESSEE. THE BOOKS OF ACCOUNTS WHICH WERE IMPOUNDED DURING THE COURSE OF SURVEY PROCEEDI NGS WERE WITH THE ASSESSING OFFICER, WHEREIN THE INVESTMENT IN THE FI RM WAS RECORDED IN THE ITA NO.192/VIZAG/2013 YELAPALLI SUBBA RAO, ELURU 5 DAY BOOK AND LEDGER. THEREFORE, THIS CANNOT BE BRO UGHT TO TAX AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. AS REGAR DS THE ADDITION TOWARDS HOUSEHOLD EXPENDITURE, THE A.R. SUBMITTED T HAT THE ASSESSING OFFICER MADE THIS ADDITION ON THE PREMISES OF SURMI SES AND CONJECTURES WITHOUT CONSIDERING THE ASSESSEES SUBMISSIONS. TH E A.R. FURTHER SUBMITTED THAT THE ASSESSEE LIVES ALONG WITH HIS BR OTHER AND CARRYING ON THE BUSINESS UNDER ONE ROOF. THE FAMILY MEMBERS AR E HAVING AGRICULTURAL INCOME WHICH IS NOT REFLECTED IN THE B OOKS OF ACCOUNTS AND THE HOUSEHOLD EXPENDITURE HAS BEEN INCURRED FROM TH E FAMILY MEMBERS AGRICULTURAL INCOME, THEREFORE, SEPARATE ADDITIONS TOWARDS ESTIMATED ADDITIONS FOR HOUSEHOLD EXPENSES IS UNWARRANTED. ON THE OTHER HAND, THE D.R. STRONGLY SUPPORTED THE ORDER OF THE CIT(A) . 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. IN THIS CASE, THERE WAS A SU RVEY OPERATION U/S 133A OF THE ACT. CONSEQUENT TO THE SURVEY, THE CAS E WAS REOPENED U/S 147 OF THE ACT AND ACCORDINGLY NOTICE U/S 148 WAS I SSUED. THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF T HE ACT AND MADE VARIOUS ADDITIONS. THE CIT(A) CONFIRMED THE ADDITI ONS MADE BY THE A.O., ON THE BASIS OF INFORMATION AVAILABLE FROM TH E RECORDS. AS STATED BY THE CIT(A), DESPITE REPEATED OPPORTUNITIES GIVEN TO THE ASSESSE, THE ITA NO.192/VIZAG/2013 YELAPALLI SUBBA RAO, ELURU 6 ASSESSEE FAILED TO APPEAR BEFORE THE CIT(A). THERE FORE, CIT(A), LEFT WITH NO OPTION, DECIDED THE APPEAL EX-PARTE AND CONFIRME D THE ASSESSMENT ORDER. THE ASSESSEE CLAIM IS THAT IT HAS FILED DETA ILED WRITTEN SUBMISSIONS ON 20.6.2011 ALONG WITH NECESSARY EVIDENCES IN SUPP ORT OF HIS CONTENTIONS. WE HAVE EXAMINED THE SUBMISSIONS MADE B Y THE ASSESSEE AS WELL AS THE ORDER PASSED BY THE CIT(A). ON PERU SAL OF CIT(A) ORDER, WE FIND THAT THE CIT(A) DID NOT TAKE COGNIZANCE OF WRITTEN SUBMISSION DATED 20-06-2011 AND WITHOUT TAKING NOTE OF THE DET AILS FURNISHED BY THE ASSESSE, DISMISSED THE APPEAL FILED BY THE ASSE SSEE AND UPHELD THE ADDITIONS MADE BY THE A.O. IN A CASUAL MANNER. THO UGH THE CIT(A), DECIDED THE ISSUE ON MERITS, THERE IS NO IOTA OF EV IDENCE THAT HE HAD TAKEN NOTE OF ASSESSE OBJECTIONS. THEREFORE, IN OUR OPINION, THE ISSUE NEEDS TO BE REEXAMINED BY THE CIT(A) IN THE LIGHT O F THE SUBMISSIONS MADE BY THE ASSESSEE. THEREFORE, TO MEET THE ENDS OF JUSTICE, WE REMIT THE MATTER BACK TO THE FILE OF THE CIT(A), TO CONSI DER THE ISSUE AFRESH, AFTER AFFORDING AN OPPORTUNITY OF HEARING TO THE AS SESSEE. NEEDLESS TO SAY, THE ASSESSE IS DIRECTED TO APPEAR AND FURNISH THE DETAILS, FOR EARLY DISPOSAL OF THE CASE. ITA NO.192/VIZAG/2013 YELAPALLI SUBBA RAO, ELURU 7 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 4 TH DEC15. SD/- SD/- ( . ) ( . . . . ) ( (( ( V. DURGA RAO ) )) ) ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 3 / DATED : 4.12.2015 VG/SPS ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT YEDLAPALLI SUBBA RAO, PROP: LAKSHMI HARDWARE, NEAR MUNICIPAL OFFICE, ELURU, W.G. DIST., A.P. 2. '(& / THE RESPONDENT THE ITO, WARD-1, ELURU 3. 5 / THE CIT, RAJAHMUNDRY 4. 5 () / THE CIT (A)-11, MUMBAI, CAMP AT VISAKHAPATNAM 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM