The ACIT, Circle-1(1), Guntur V. Sri Polisetty Gnanadev, Guntur

ITA 200/VIZ/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56802 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 16-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Assessee Lawyers: NONELETTER FAX
• Keywords: Bogus purchase; Business income; Opportunity of being heard; Additional evidence

Judgement Text

ITA NO.200 OF SRI POLISETTY GNANADER GUNTUR PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NOS.200/VIZAG/2011 ASSESSMENT YEAR:2004-05 ACIT CIRCLE-1(1) GUNTUR VS. SRI POLISETTY GNANADEV, GUNTUR (APPELLANT) (RESPONDENT) PAN NO:AACHP 0006 R APPELLANT BY: SMT. D. KOMALI KRISHNA, SR.DR RESPONDENT BY: NONE/LETTER BY FAX. DATE OF HEARING: 11-08-2011 DATE OF PRONOUNCEMENT: 23-08-2011 ORDER PER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER DATED 28.02.2011 PASSED BY THE LD CIT (A) GUNTUR AND IT RELATES TO T HE ASSESSMENT YEAR 2004-05. 2. THE APPEAL WAS POSTED INITIALLY ON 22-6-2011 ON WHICH THE DATE THE ASSESSEE SOUGHT ADJOURNMENT BY SENDING A TELEGRAM. ACCORDINGLY THE CASE WAS ADJOURNED TO 12-7-2011 AND ON THE DATE ALSO THE ASS ESSEE SOUGHT ADJOURNMENT BY SENDING A TELEGRAM. THEREAFTER THE CASE WAS AGAI N POSTED FOR HEARING ON 3-8- 2011 AND ON THAT DATE ALSO THE ASSESSEE SOUGHT ADJO URNMENT BY SENDING A TELEGRAM. SINCE THE DEPARTMENT ALSO SOUGHT ADJOURNM ENT ON THE VERY SAME DATE, THE CASE WAS ADJOURNED TO 11-8-2011 BY GIVING LAST CHANCE TO BOTH THE PARTIES. HOWEVER, THE ASSESSEE AGAIN FAILED TO APPEAR ON THE DATE OF HEARING AND THIS TIME ALSO THE ASSESSEE SOUGHT ADJOURNMENT BY SENDIN G A FAX, BY IGNORING THE FACT THAT HE WAS GIVEN LAST CHANCE. IN THESE CIRCUMSTANCE S, WE REJECT THE PETITION SENT BY THE ASSESSEE SEEKING ADJOURNMENT AND PROCEE D TO HEAR THE APPEAL EX- PARTE, QUA THE ASSESSEE. 3. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS: ITA NO.200 OF SRI POLISETTY GNANADER GUNTUR PAGE 2 OF 4 2. THE LD CIT (A) OUGHT TO HAVE APPRECIATED THE FA CT THAT THERE IS NO NEED TO COMMENT ON THE ISSUE OF UNDER E STIMATED PROFIT OF ` 37,70,083/- WHICH AROSE ON ACCOUNT OF TOTALING MISTAKE AND WHICH WAS NOT CONTESTED IN THE GROUNDS OF APPEAL AND NOT EVEN REMANDED TO THE ASSESSING OFFICER. 3. THE LD CIT (A) OUGHT TO HAVE APPRECIATED THE EFF ORT MADE BY THE ASSESSING OFFICER IN THE REMAND REPORT FINDING THE DIFFERENCES IN RESPECT OF SCRIPS VIZ., PATSPIN INDI A LTD., NEPC (WRONGLY TYPED AS NEPOMI CONSTRUCTIONS) AND SRI-VEN MULI-TECH AND OUGHT TO HAVE ENHANCED THE ASSESSMENT BASING ON THE FINDINGS OF THE ASSESSING OFFICER KEEPING IN VIEW O F THE FACT THAT THE ASSESSEE HAS ADMITTED THE DIFFERENCE IN RE SPECT OF ANDHRA BANK SCRIPS IN THE SIMILAR CIRCUMSTANCES. 4. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE, A HUF FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON ADMITTING A TOTAL INCOME OF ` 44,260/- AND AGRICULTURAL INCOME OF ` 2,50,616/-. THE ASSESSEE, BESIDES BEING A PARTNER IN CERTAIN FIRMS, ALSO CARRIES ON TRADING I N SHARES AND SECURITIES. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSES SING OFFICER EXAMINED THE TRADING A/C FURNISHED BY THE ASSESSEE AND NOTICED T HAT THE PROFIT DECLARED BY THE ASSESSEE FROM TRADING OF SHARES WAS UNDER STATED BY ` 37,70,083/-. SINCE THE ASSESSEE FAILED TO FURNISH ANY REASONABLE EXPLANATI ON, THE ASSESSING OFFICER ADDED THE SAME TO THE BUSINESS INCOME OF THE ASSESS EE. THE ASSESSING OFFICER ALSO COMPARED THE DETAILS OF SHARES FOUND RECORDED IN THE DEMAT A/C WITH THE DETAILS OF SHARES THAT WERE TRANSACTED IN THE TRADI NG A/C. THE DIFFERENCES NOTICED ON SUCH COMPARISON WERE ALSO ADDED TO THE TOTAL INC OME OF THE ASSESSEE AS BOGUS PURCHASES. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFOR E THE LD CIT (A), BEFORE WHOM, THE ASSESSEE FILED MANY ADDITIONAL EVIDENCES. ACCORDINGLY, THE LD CIT (A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFIC ER. BASED ON THE SAID REMAND REPORT, THE LEARNED CIT(A) CONFIRMED A SUM OF ` 1,73,466/- OUT OF THE ADDITION MADE TOWARDS BOGUS PURCHASES. WITH REGARD TO THE AD DITION OF ` 37,70,083/- RELATING TO THE UNDER STATEMENT OF PROFIT, THE ASSE SSING OFFICER DID NOT SUBMIT ANY REPORT ON THE REMAND PROCEEDING, APPARENTLY WIT H THE IMPRESSION THAT THE ASSESSEE HAS NOT CHALLENGED THE SAID ADDITION BEFOR E THE CIT(A). ACCORDINGLY THE ITA NO.200 OF SRI POLISETTY GNANADER GUNTUR PAGE 3 OF 4 LD CIT (A) DELETED THE SAID ADDITION WITH THE REASO NING THAT THE ASSESSING OFFICER HAS FAILED TO OFFER ANY JUSTIFICATION IN SUPPORT OF THE SAID ADDITION. IN THE REMAND REPORT, WHILE DISCUSSING THE ISSUE OF BOGUS PURCHAS ES, THE ASSESSING OFFICER HAS POINTED OUT THAT THERE WERE DIFFERENCES IN THE PURC HASES OF SHARES IN RESPECT OF THE THREE COMPANIES, VIZ., PATSPIN INDIA LTD., NEPC AND SRI-VEN MULI-TECH AND ACCORDINGLY REQUESTED THE LD CIT (A) TO DECIDE THE ISSUE OF UNACCOUNTED PURCHASES WITH REGARD TO THE ABOVE CITED THREE COMP ANYS SHARES ALSO. HOWEVER, THE LD CIT (A) DID NOT EXPRESS ANY OPINION ON THE S AME. HENCE THE REVENUE IS IN APPEAL BEFORE US AGGRIEVED BY THE ORDER OF THE LD C IT (A). 6. WE HAVE HEARD THE LD DEPARTMENTAL REPRESENTATIVE AND CAREFULLY PERUSED THE RECORD. THOUGH THE ASSESSEE DID NOT RAISE ANY S PECIFIC GROUND WITH REGARD TO THE ADDITION OF ` 37,70,083/- RELATING TO UNDER STATEMENT OF PROFIT I N ITS GROUNDS OF APPEAL, YET IT APPEARS THAT THE SAID GROUND WAS RAISED BEFORE THE LD CIT (A) IN THE APPEAL PROCEEDINGS. ACCORDINGLY, THE LEARNED CI T(A) HAS NOTED THE SAID GROUND IN PARA 3 OF HIS ORDER AS POINT NO.5. SINCE THERE WAS NO SPECIFIC GROUND IN THE GROUNDS OF APPEAL FILED BY THE ASSESSEE, IT APPEARS THAT THE ASSESSING OFFICER HAS FAILED TO ADDRESS THE SAME IN HIS REMAN D REPORT. WITH REGARD TO THE SAID ADDITION, THE ASSESSEE REPRESENTED BEFORE THE LD CIT (A) THAT THE REPORT GENERATED BY THE DATA ENTRY OPERATOR OF THE ASSESSE E IN EXCEL SHEETS CONTAINED MANY MISTAKES AND THE ASSESSING OFFICER HAS RELIED UPON THE VERY SAME EXCEL SHEETS TO ARRIVE AT THE EXCESS PROFIT OF ` 37,70,083/-. HOWEVER, THE SAID CLAIM OF THE ASSESSEE HAS NOT BEEN VERIFIED BY THE ASSESSING OFFICER IN THE REMAND PROCEEDING, APPARENTLY UNDER THE MISTAKEN BELIEF TH AT THE ASSESSEE DID NOT PRESS THE SAID ADDITION BEFORE LEARNED CIT(A). ACCORDINGL Y THE LD DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR MAKING DUE VERIFICATION. WE F IND MERIT IN THE SAID PLEA OF THE LD DEPARTMENTAL REPRESENTATIVE. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD CIT (A) ON THIS ISSUE AND RESTORE THE SAME TO THE F ILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REEXAMINE THE ISSUE OF ADDITION OF ` 37,70,083/- AFTER HEARING THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCOR DANCE WITH THE LAW. WITH REGARD TO THE UNACCOUNTED PURCHASES OF SHARES IN TH E COMPANIES VIZ., PATSPIN ITA NO.200 OF SRI POLISETTY GNANADER GUNTUR PAGE 4 OF 4 INDIA LTD., NEPC AND SRI-VEN MULI-TECH, IT WAS REPRE SENTED BEFORE THE LD CIT (A) THAT THESE SHARES HAVE BEEN ACCOUNTED FOR IN THE BO OKS OF THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE SAID CLAIM OF THE ASSESSEE HAS ALSO NOT BEEN VERIFIED BY THE ASSESSIN G OFFICER. ACCORDINGLY WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THIS ISSUE ALS O AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO E XAMINE THE CLAIM OF THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH TH E LAW, AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:23-08-2011 COPY TO 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1( 1) GUNTUR 2 SRI POLISETTY GNANADEV, D.NO.10-2-23, 2 ND LANE, SAMBASIVAPET, GUNTUR 3 4. THE CIT GUNTUR THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM