Praveen Kumar Kesava, Hyderabad V. ITO, Ward-12(1), Hyderabad, Hyderabad

ITA 1959/HYD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5965 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1959/HYD/2014 ASSESSMENT YEAR: 2010-11 PRAVEEN KUMAR KESAV, HYDERABAD PAN ATNPK 1286 J VS. INCOME-TAX OFFICER, WARD 12(1), HYDERABAD APPELLANT RESPONDENT ASSESSEE BY: SHRI P. MURALI MOHAN RAO REVENUE BY: SHRI B. KURMI NAIDU DATE OF HEARING: 08/03/2016 DATE OF PRONOUNCEMENT: 11/03/2016 O R D E R PER V. DURGA RAO, J.M.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF CIT(A)-II, HYDERABAD DATED 09/09/2014 PERTAINING TO THE AY 2010-11. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAD FIL ED HIS RETURN OF INCOME ON 27/07/2010 DECLARING TOTAL INCO ME AT RS. 30,30,038/-, WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, AFTER FOLLOWING THE DUE PROCEDURE, ASSE SSMENT WAS COMPLETED BY THE ASSESSING OFFICER U/S 143(3) OF TH E ACT, DETERMINING THE INCOME OF THE ASSESSEE AT RS. 99,23 ,840/- BY MAKING THE FOLLOWING ADDITIONS: 1. UNEXPLAINED CASH DEPOSITS RS. 68,50,000 2. BANK INTEREST RS. 43,799 I.T.A. NO. 1959/HYD/2014 PRAVEEN KUMAR KESAVA 2 3. AS PER THE AIR INFORMATION RECEIVED, THE ASSESSI NG OFFICER NOTED THAT THE ASSESSEE HAD MADE CASH DEPO SITS OF RS.68,50,000/- IN HIS HDFC BANK ACCOUNT NO. 00211060019476 WITH LAKDIKAPUL BRANCH, HYDERABAD. O N BEING ASKED BY THE ASSESSING OFFICER TO EXPLAIN THE SOURCES OF THE SAID DEPOSITS, IT WAS EXPLAINED BY THE ASSESSEE , THAT HE WAS A SOFTWARE EMPLOYEE AND WORKED IN USA FOR A PER IOD OF 18 YEARS WITH THE COMPANIES LIKE HP, SONY, CSC AND IBM. THE MONIES RECEIVED WERE DEPOSITED IN HIS NRO/NRI ACCOU NT. OUT OF THE MONEY DEPOSITED IN THIS NRO/NRI ACCOUNT, SOM E ADVANCES WERE GIVEN TO A BUILDER TO CONSTRUCT A HOU SE IN GACHIBOWLI, HYDERABAD. FOR THIS PURPOSE MONIES WERE WITHDRAWN IN YEARS 2006-07, 2007-08 AND 2008-09. HO WEVER, DUE TO NON RECEIPT OF APPROVALS FROM THE GOVERNMENT AUTHORITIES, THE PLAN OF CONSTRUCTING THE HOUSE WAS DROPPED AND THE ADVANCES GIVEN FOR CONSTRUCTION WERE RETURN ED BACK AND THE MONEY WAS DEPOSITED BACK IN HDFC BANK ACCOU NT IN THE YEAR 2009. 3.1. AFTER VERIFYING THE DATES OF WITHDRAWALS IN HD FC BANK AND THE DATES OF CASH DEPOSITS, THE ASSESSING OFFICER FOUND THAT THERE IS A GAP OF MORE THAN 2 TO 3 YEARS BETWEEN TH E DATE OF CASH WITHDRAWAL AND THE DATE OF CASH DEPOSIT IN HDF C BANK WHICH WAS NOT EXPLAINED BY THE ASSESSEE. FURTHER, T HE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE D ID NOT FILE ANY EVIDENCE HAVING GIVEN ADVANCE TO ANYBODY FOR TH E CONSTRUCTION OF THE HOUSE. HE ALSO COMMENTED THAT N O EVIDENCE WAS FILED SUBSTANTIATING THE ADVANCES GIVE N AND THE AMOUNTS RECEIVED BACK. IN THE ABSENCE OF ANY EVIDEN CE, THE ENTIRE AMOUNT OF RS.68,50,000/- WAS TREATED AS UNEX PLAINED INCOME BY THE AO. FURTHER, THE ASSESSING OFFICER AL SO NOTED THAT AS PER THE BANK STATEMENT SUBMITTED BY THE ASS ESSEE, INTEREST OF RS.18,042/- RECEIVED FROM HDFC BANK, LA KDIKAPUL, HYDERABAD, AND RS.25,757/- RECEIVED FROM HITECH CIT Y BRANCH I.T.A. NO. 1959/HYD/2014 PRAVEEN KUMAR KESAVA 3 WERE NOT OFFERED TO INCOME. THEREFORE, THE SAME, TO TAL AMOUNTING TO RS.43,799/-, WAS ALSO ADDED TO THE INC OME RETURNED. 4. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A), WHO CONFIRMED THE ORDER OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE/CONFIRMATION LETTERS FROM THE PARTIES TO W HOM HE PAID ADVANCES WHICH WERE CLAIMED TO HAVE BEEN RETURNED A ND DEPOSITED IN CASH IN HDFC ACCOUNT. 5. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFOR E US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT (A)-II, HYDERABAD IS ERRONEOUS BOTH ON FACTS AND IN LAW IN DISMISSING T HE APPEAL FILED BY THE ASSESSEE. 2. THE LD. CIT (A) OUGHT TO HAVE APPRECIATED THE FA CT THAT AO ERRED IN COMPLETING THE PROCEEDINGS U/S 143(3) O F THE ACT WITHOUT ISSUE OF NOTICE U/S 143(2) OF THE ACT. 3. THE LD. CIT(A)-II, ERRED IN UPHOLDING THE ADDITI ON OF RS. 68,50,000/- AS UNEXPLAINED CASH DEPOSIT. 4. THE LD. CIT(A)-II, OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE PAID ADVANCES TO PARTIES AND AS S UCH ADVANCES WERE RETURNED THEY WERE DEPOSITED BACK INT O THE BANK ACCOUNT. 5. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE SOURC ES FOR DEPOSITS MADE IN BANK ACCOUNT. 6. THE LD. CIT(A)-II, ERRED IN UPHOLDING THE VIEW O F AO REGARDING THE ADDITION OF RS. 43,799/- AS INTEREST RECEIVED FROM BANK. 6. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED THE RELEVANT MATERIAL ON RECORD AS WELL AS THE ORDERS OF REVENUE AUTHORITIES. BEFORE US, THE ASSESSEE FIL ED A PETITION I.T.A. NO. 1959/HYD/2014 PRAVEEN KUMAR KESAVA 4 FOR ADMISSION OF ADDITIONAL EVIDENCE STATING THEREI N THAT SINCE THE ASSESSEE IS A NON RESIDENT INDIAN AND WAS NOT A VAILABLE IN INDIA DURING THE ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE WAS NOT IN A POSITION TO COLLECT AND SUBMI T THE RELEVANT DOCUMENTS BEFORE THE LOWER AUTHORITIES. A S THE SAME ARE GATHERED NOW AND ARE BEING SUBMITTED BEFORE THE TRIBUNAL. IT WAS FURTHER STATED THAT SINCE THE DOCUMENTS SUBM ITTED ARE IMPORTANT IN DISPOSING THE APPEAL AND REASON FOR TH E NON- SUBMISSION FOR THE SAME BEFORE THE LOWER AUTHORITIE S IS BONAFIDE, REQUESTED THE BENCH TO ADMIT THE ADDITION AL EVIDENCES, WHICH COMPILED IN THE FORM OF PAPER BOO K AND RESTORE THE APPEAL BACK TO THE FILE OF THE CIT(A) F OR DECIDING THE SAME AFTER EXAMINING THE ADDITIONAL EVIDENCES F ILED. THE ADDITIONAL EVIDENCES FILED, ARE AS FOLLOWS: 1. COPY OF THE AGREEMENT OF SALE DATED 02/06/2006 WAS ENTERED BETWEEN THE ASSESSEE AND SRI ANUGU BANGLA RAJI REDDY. 2. COPY OF THE AGREEMENT OF SALE DATED 07/11/2007 WAS ENTERED BETWEEN THE ASSESSEE AND SRI ANUGU BANGLA RAJI REDDY. 3. COPY OF THE DEED OF CANCELLATION OF SALE AGREEM ENT DATED 02/06/2006 WAS ENTERED BETWEEN THE ASSESSEE AND SRI ANUGU BANGLA RAJI REDDY VIDE DATED 17/07/0 9. 4. COPY OF THE DEED OF CANCELLATION OF SALE AGREEM ENT DATED 07/11/2007 WAS ENTERED BETWEEN THE ASSESSEE AND SRI ANUGU BANGLA RAJI REDDY VIDE DATED 21/08/2009. 6.1 THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVE R, HAS NOT CONTROVERTED TO THE ADMISSION OF ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE US. WE ARE OF THE VIEW THAT SINCE THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE ARE CRUCIAL IN DISPOSING THE APPEAL OF THE ASSESSEE AND BECAUSE OF A BONAFIDE REASON, THE ASSESSEE WAS NOT ABLE TO SUBM IT THE SAME BEFORE THE REVENUE AUTHORITIES, WE ADMIT THE A DDITIONAL EVIDENCES FILED BY THE ASSESSEE. AS THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE BEFORE US FOR THE FIRST T IME, THERE WAS NO OCCASION TO CONSIDER AND EXAMINE THE SAME BY THE I.T.A. NO. 1959/HYD/2014 PRAVEEN KUMAR KESAVA 5 REVENUE AUTHORITIES, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE APPEAL BACK TO THE FILE OF THE CIT(A) WIT H A DIRECTION TO CONSIDER AND EXAMINE THE ADDITIONAL EVIDENCES SU BMITTED BY THE ASSESSEE AND DISPOSE OF THE APPEAL IN ACCORD ANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS THE AO. 7 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON MARCH, 2016 SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER SD/- (V. DURGA RAO) JUDICIAL MEMBER HYDERABAD, DATED 11 TH MARCH, 2016 KV COPY FORWARDED TO: 1. SHRI PRAVEEN KUMAR KESAVA, C/O P. MURALI & CO., CAS., 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500 082 2. ITO, WARD 12(1), HYDERABAD 3. CIT(A) - II, HYDERABAD 4 CIT - I, HYDERABAD 5 THE DR, ITAT, HYDERABAD