Sri. Hemanth Kumar B, V. ITO,

ITA 218/BANG/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7686 (ITAT-BANGALORE)
• Duration Of Justice: 5 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L B BHASKAR REDDY
• Keywords: Presumptive income; Gift; Salary income
• Section: 44AD; 143(3); 234B; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A BENCH: BANGALORE BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA. NO.218/BANG/2014 ASSESSMENT YEAR: 2010 - 11 SRI HEMANTH KUMAR B. NO.5, II FLOOR, TRADE CENTRE, BUNTS HOSTEL ROAD, MANGLORE - 575 003. PAN: AFOPK 5644 M VS. ITO, WARD - (2), ATTAVARA, MANGALOE. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SRI NARENDRA SHARMA FOR REVENUE : SRI L.B. BHASKAR REDDY, ADDL. CIT DATE OF HEARING : 05.04.2019 DATE OF PRONOUNCEMENT : 10 .04.2019 ORDER PER PAVAN KUMAR GADALE, JM . THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE CIT (A), MYSORE, DATED 12/11/2013 PASSED U/S 143(3) AND SECTION 250 OF THE ACT FOR THE ASSESSMENT YEAR 2010 - 11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE IMPUGNED ORDER U/S 143(3) DATED 12/11/2013 PASSED BY THE AUTHORITY BELOW IS OPPOSED TO THE LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE AUTHORITIES BELOW ERRED IN TREATING RS. 25,50,000/ - AS UNEXPLAINED INCOME. 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AUTHORITY BELOW ERRED IN TAXING THE ADDITION U/S 69A. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AUTHORITY BE LOW IS NOT JUSTIFIED IN NOT ACCEPTING INCOME OFFERED BY APPELLANT UNDER SECTION 44AD OF THE ACT. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AUTHORITY BELOW ERRED IN CHARGING / LEVYING INTEREST UNDER SECTION 234B OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALARY AND INCOME FROM OTHER SOURCES, FILED THE R ETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3,65,759/ - ON 31/07/2010. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) WAS ISSUED. DURING THE PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE WAS DRAWING SALARY AS A DIRECTOR OF THE COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACT UNDER THE NAME AND STYLE OF CHIRAG BUILDERS AND DEVELOPERS PVT LT D, AND THE ASSESSEE MADE CERTAIN CASH DEPOSITS OF RS. 22.50 LAKHS IN STATE BANK OF MYSORE, KANKANADY BRANCH AND THE SAME WAS NOT DISCLOSED WITH THE REVENUE. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT DISCLOSED THESE FACTS AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS EXPLAINED THAT OUT OF THE TOTAL DEPOSITS, RS. 9 LAKHS WAS HIS UNDISCLOSED CONTRACT RECEIPTS AND THE ASS ESSEE HAS FILED A STATEMENT OF R EVISED IN COME AND OFFERED INCOME AT 8% ON THE PRESUMPTIVE TAXATION UNDER THE PROVISIONS OF SECTION 44AD OF THE IT ACT, 1961 AND THE BALANCE OF 16.50 LAKHS WAS DEPOSITED AND REMITTED ON BEHALF OF MR. BABU PRAKASH. THE ASSESSING 3 OFFICER HAS VERIFIED THE VARIOUS DETAILS ON RECORD AND HAVING NOT SATISFIED WITH THE SUBMISSIONS MADE BY THE ASSESSE E IN RESPECT OF THE CASH DEPOSITS ON THE ASPECTS OF GIFTS AND THE LETTERS FILED. T HE LD AO MADE ADDITION OF CASH DEPOSITS AS UNEXPLAINED AND ASSESSED THE TOTAL INCOME OF RS. 29,23,712/ - AND PASSED THE ORDER U/S 143(3) OF THE ACT ON 16/11/2012. 3. AGGRIEVE D, THE ASSESSEE FILED AN APPEAL BEFORE THE C IT (A), WHEREAS CIT (A) HAVING CONSIDERED THE FINDINGS OF THE AO, HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER AND DISMISSED TH E ASSESSEES APPEAL. AGGRIEVED BY THE ORDER , T H E ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL. 4. BEFORE US, LD AR SUBMITTED THAT THE ASSESSEE WAS IN R EAL ESTATE BUSINESS AND HAS NOT DISCLOSED THE CONTRACT RECEIPTS . HENCE, FILED THE REVISED STATEMENT OF INCOME DECLARING INCOME OF RS. 72,000/ - WHICH IS 8% ON RS. 9 LAKHS U N D E R PRESUMPTIVE TAXATION AND THE B ALANCE OF RS. 16.50 LAKHS I S IN RESPECT OF TRANSACTIONS OF MR. BABU PRAKASH, WHOSE DEPOSITS HAVE BEEN CREDITED TO THE ASSESSEES ACCOUNT AND REMITTED . THE LD AR FURTHER SUBMITTED THAT THE ASSESSEE HAS HELPED MR. BABU PRAKA SH IN RESPECT OF SALE CONSIDERATION WHICH HAS BEEN DEPOSITED IN ASSESSEES BANK ACCOUNT AND THESE FACTS WERE NOT FILED BEFORE THE LOWER AUTHORITIES AND PRAYED FOR ALLOWING THE ASSESSEES APPEAL. 4 5. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPOR TED THE ORDER OF THE CIT (A) AND SUBMITTED THAT ASSESSEE HAS NOT FURNISHED DETAILS IN APPELLATE PROCEEDINGS AND VEHEMENTLY OPPOSED THE LD AR SUBMISSIONS. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AV AILABLE ON RECORD. I N RESPECT OF THE C ASH DEPOSITS MADE BY THE ASSESSEE, LD AR HAS VEHEMENTLY ARGUED AND SUBMITTED THAT THE ASSESSEE IS IN R EAL ESTATE BUSINESS AND OFFERED INCOME @ 8% OF THE CONTRACT RECEIPTS ON PRESUMPTIVE TAX BASIS . I N RESPECT OF THE BALANCE OF RS. 16.50 LAKHS, THE LD AR SU BMITTED THAT THE ASSESSEE IS READY TO EXPLAIN WITH THE DETAIL S AND EVIDENCE TO SUBSTANTIATE THAT THE SAID AMOUNT DOES NOT BELONG TO THE ASSESSEE BUT RELATES TO MR. BABU PRAKASH. WE HAVE PERUSED THE ORDER OF THE CIT (A) AND FOUND THAT THE LD CIT (A) HAS CO NSIDERED THE OBSERVATIONS OF THE AO BUT HAVING NOT SATISFIED THE SUBMISSIONS OF THE ASSESSEE HAS CONFIRMED THE ADDITION MADE BY THE AO. W E ARE OF THE OPINION THAT SINCE THE ASSESSEE HAS OFFERED THE INCOME AS PER THE PROVISIONS OF SECTION 44AD OF THE ACT I .E., 8% OF THE CONTRACT RECEIPTS FROM THE REAL ESTATE BUSINESS, THE GROSS RECEIPTS OF RS. 9 LAKHS ARE TO BE PRESUMED FROM REAL ESTATE BUSINESS. CONSIDERING THE FACT , WE ARE OF THE SUBSTANTIVE OPINION THAT THE INCOME OFFERED BY THE ASSESSEE @ 8% BE AC CEPTE D BY THE ASSESSING OFFICER. WHEREAS IN RES PECT OF B ALANCE 5 OF RS. 16.50 LAKHS, THE ASSESSEE IS READY TO EXPLAIN WITH EVIDENCE S AND DETAILS THAT IT DOES NOT BELONG TO THE ASSESSEE AND ONE MORE OPPORTUNITY IS PROVIDED BEFORE T HE ASSESSING OFFICER. THEREFORE, TO MEET THE ENDS OF JUSTICE, WE RESTORE THIS DISPUTED ISSUE, FOR A LIMITED PURPOSE TO THE FILE OF THE AO FOR VERIFICATION AND EXAMINATION OF THE FACTS AND EVIDENCES AND FURTHER THE ASSESSEE SHALL BE PROVIDED WITH OPPORTUNITY OF HEARING AND SHOUL D COOPERATE IN SUBMITTING THE NECESSARY D ETAILS AS REQUIRED BY THE AO FOR EARLY DISPOSAL OF THE CASE. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, ASSE SSEES APPEAL IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES. S D / - S D / - (JASON P BOAZ ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 0 T H APRIL , 2019 . OKK, SR.PS COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A), MYSORE. 4. PR. CIT, MYSORE. 5. DR, ITAT, BANGALORE. 6. GUARD FILE