K Siddalingappa , Davangere V. Income TAx officer Ward-2 , Davangere

ITA 1955/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5627 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 04-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL ANAND
• Assessee Lawyers: R CHANDRASEKHAR
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1955 / BANG/2017 ASSESSMENT YEAR : 20 08 - 09 SHRI K. SIDDALINGAPPA, PWD CONTRACTOR, ANAGODU, DAVANGERE. PAN: AKQPK 3123L VS. THE INCOME TAX OFFICER, WARD 2, DAVANGERE. APPELLANT RESPONDENT APPELLANT BY : SHRI R. CHANDRASEKHAR, ADVOCATE RESPONDENT BY : SHRI VIMAL ANAND, ADDL. CIT (DR) DATE OF HEARING : 1 8 .01.2018 DATE OF PRONOUNCEMENT : 24 .0 1 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A), GULBARGA DATED 31.07.2017 FOR ASSESSMENT YE AR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE SUM OF RS.20,000/-, THE EMD MADE IN THE ASSESSMENT YEAR 2007-2008 AS INCOME OF THE APPELLANT FOR THE A SSESSMENT YEAR 2008-2009. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE SAID INVESTMENT RELATES TO THE HUF AND WHICH HAS BEEN DECLARED THERE IN. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE SUM OF RS.13,76,116/- BEING THE INVE STMENT AND ACCRUAL OF THE INTEREST THEREON IN VIJAYA CASH CERT IFICATES AS INCOME OF THE APPELLANT FOR THE ASSESSMENT YEAR 2008-2009. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE INVESTMENT IN VIJAYA CASH CERTI FICATE IS IN THE ASSESSMENT YEAR 2007-2008 AND NOT RELATING TO THE A SSESSMENT YEAR IN ITA NO.1955/BANG/2017 PAGE 2 OF 4 QUESTION. THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) OUGHT TO HAVE CONSIDERED THE BANK STATEMENT FILED BY THE APPELLANT. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE INVESTMENT IN RELIANCE MUTUAL FUND PA YMENT MADE THROUGH RELIANCE INSURANCE PREMIUM AS INVESTMENTS O F THE APPELLANT, REJECTING THE PLEA THAT THE SAME RELATES TO HUF. 6. THE, LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN UPHOLDING THE LEVY OF INTEREST CHARGED U/S.234B OF THE ACT. 7. THE DECISION OF THE HON'BLE SUPREME COURT RENDER ED IN GOETZE INDIA VS. COMMISSIONER OF INCOME TAX (284 ITR 323) RELIED UPON BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S NO APPLICATION TO THE FACTS OF THE CASE. THE APPELLANT PRAY LEAVE OF THE HON'BLE TRIBUNAL TO ADD/MODIFY/DELETE ANY OTHER GROUND OR GROUNDS AT THE TIME OF HEARING. 3. REGARDING GROUND NO. 1, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS PER PAGE NO. 3 OF THE ASSESSMENT ORDER, THERE WAS OPENI NG BALANCE OF RS. 3,16,249/- AS ON 01.04.2007 AND OUT OF THAT, THE AO HAS MADE ADDITION OF RS. 20,000/- IN THE PRESENT YEAR. HE SUBMITTED THAT EV EN IF ANY ADDITION IS REQUIRED ON THIS ACCOUNT, THE SAME CAN BE MADE IN ASSESSMENT YEAR 2007-08 AND NOT IN THE PRESENT YEAR I.E. A. Y. 2008-09. HE SUBMITTED THAT THIS ARGUMENT WAS MADE BEFORE CIT(A) ALSO BUT HE DECIDED THIS ISSUE WITHOU T CONSIDERING THIS CONTENTION. 4. REGARDING GROUND NO. 3, HE SUBMITTED THAT THE CO PY OF RELEVANT BANK STATEMENT OF VIJAYA BANK FOR THE PRESENT YEAR IS AVAILABLE ON PAGE NO. 29 OF THE PAPER BOOK AND AS PER THE SAME, THE DEPOSIT OF RS. 12.50 LAKHS WAS MADE ON 04.01.2007 AND INTEREST OF RS. 25,706/- WAS CREDITE D BY BANK AS ON 25.03.2007 AND THE CLOSING BALANCE AS ON 31.03.2007 IS RS. 12, 75,706/- AND IN THE PRESENT YEAR, INTEREST HAS BEEN CREDITED BY BANK ON 23.03.2 008 OF RS. 1,00,410/- AND THE TOTAL BALANCE AS ON 31.03.2008 IS RS. 13,76,116 /-. HE SUBMITTED THAT THIS CREDIT OF INTEREST AS ON 25.03.2008 IS NET OF TDS O F RS. 11,530/- AND THE GROSS INTEREST BEFORE TDS IS RS. 1,11,940/-. HE SUBMITTE D THAT THIS BANK ACCOUNT IS BELONGING TO ASSESSEES HUF AND THIS INTEREST INCO ME WAS DECLARED BY THE SAID HUF IN ITS RETURN OF INCOME FOR THE PRESENT YE AR FILED ON 22.09.2008 COPY ITA NO.1955/BANG/2017 PAGE 3 OF 4 AVAILABLE ON PAGE NO. 27 OF THE PAPER BOOK. THE LD . DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGARD ING GROUND NO. 1 OF THE ASSESSEES APPEAL IN WHICH THE ISSUE INVOLVED IS RE GARDING THE ADDITION OF RS. 20,000/- BEING EMD, I FIND THAT IN THE ASSESSMENT O RDER, THE AO HAS STATED AT PAGE NO. 3 THAT THERE WAS OPENING BALANCE AS ON 01. 04.2007 OF RS. 3,16,249/- AND OUT OF THAT OPENING BALANCE, HE MADE ADDITION O F RS. 20,000/-. IN MY CONSIDERED OPINION, THE SAID ADDITION CANNOT BE MAD E IN THE PRESENT YEAR AND IF THE SAME HAS NOT BEEN ACCOUNTED BY THE ASSESSEE IN THE RESPECTIVE YEAR I.E. 2007-08, THE ADDITION CAN BE MADE AS PER LAW IN THA T YEAR BUT NOT IN THE PRESENT YEAR. HENCE I DELETE THIS ADDITION. GROUND NO. 1 IS ALLOWED. 6. THE REMAINING GROUNDS ARE IN RESPECT OF ADDITION OF RS. 13,76,116/- IN RESPECT OF BALANCE IN VIJAYA BANK. AS PER PAGE NO. 29 OF T HE PAPER BOOK BEING BANK STATEMENT OF VIJAYA BANK, DEPOSIT OF RS. 12.50 LAKH S WAS MADE IN FINANCIAL YEAR 2006-07 RELEVANT TO ASSESSMENT YEAR 2007-08 AN D INTEREST OF RS. 25,706/- WAS ALSO CREDITED BY BANK IN THAT YEAR AND THE CLOSING BALANCE AS ON 31.03.2007 IS RS. 12,75,706/-. TO THIS EXTENT, NO ADDITION CAN BE MADE IN THE PRESENT YEAR BY ALLEGING THAT IT IS UNEXPLAINED INV ESTMENT OF THE PRESENT YEAR. TO THIS EXTENT, I DELETE THE ADDITION IN THE PRESEN T YEAR ALTHOUGH THE AO CAN MAKE THIS ADDITION IN ASSESSMENT YEAR 2007-08 AS PE R LAW IF THE ASSESSEE IS NOT ABLE TO ESTABLISH THAT THIS MONEY IS BELONGING TO HUF AND NOT TO THE ASSESSEE INDIVIDUAL AND THE ASSESSEE IS NOT ABLE TO EXPLAIN THE SOURCE OF DEPOSIT. REGARDING THE INTEREST CREDITED IN THE PR ESENT YEAR OF RS. 1,00,410/- AS ON 23.03.2008, THERE IS NO DISPUTE THAT THIS AMO UNT IS INCOME OF THE PRESENT YEAR BUT AS PER THE ASSESSEE, GROSS INTEREST RECEIV ED FROM BANK IS OF RS. 1,11,940/- BEFORE BECAUSE TDS WAS DEDUCTED OF RS. 1 1,530/- AND THE NET IS RS. 1,00,410/- CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE. THIS IS ALSO THE CONTENTION OF THE ASSESSEE THAT THIS INCOME WAS DEC LARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED FOR THE ASSESSEES HUF O N 22.09.2008 COPY OF WHICH IS AVAILABLE ON PAGE NO. 27 OF THE PAPER BOOK. AS PER THE SAME, IT IS SEEN THAT THE GROSS TOTAL INCOME DECLARED IS RS. 1,11,940/- A ND THE TDS IS ALSO CLAIMED ITA NO.1955/BANG/2017 PAGE 4 OF 4 AT RS. 11,530/- AND ON PAGE NO. 28 OF THE PAPER BOO K IS THE INTIMATION AS PER WHICH THE DEPARTMENT HAS GRANTED REFUND OF RS. 11,3 30/- AGAINST TDS OF RS. 11,530/-. BUT THIS ASPECT WAS NOT EXAMINED BY THE AO AND CIT (A) AND HENCE, I FEEL IT PROPER TO RESTORE THIS MATTER BACK TO THE FILE OF AO FOR FRESH DECISION AFTER EXAMINING THIS CONTENTION OF THE ASSESSEE THA T THIS ACCOUNT BELONGS TO ASSESSEES HUF AND THE INTEREST INCOME OF RS. 1,11, 940/- WAS DECLARED AND ASSESSED IN THE HANDS OF THE HUF. IF THE CONTENTIO N OF THE ASSESSEE IS FOUND CORRECT, NO ADDITION CAN BE MADE IN THE PRESENT CAS E BEING ASSESSEE INDIVIDUAL. THE AO SHOULD PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 24 TH JANUARY, 2018. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.