G.V.S.L. Kantha Rao, Guntur V. The Pr. CIT, Guntur

ITA 228/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6673 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 20-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R GOVINDARAJAN
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(3); 6; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 228 /VIZ/ 201 7 ( / ASSESSMENT YEAR: 2009 - 10 ) G.V.S.L.KANTHA RAO D.NO.25 - 7 - 11, 3 RD LINE RAMANAMA KSHETRAM GUNTUR [ PAN : A HEPG4370L ] PR. COMMISSIONER OF INCOME TAX GUNTUR ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI, AR / RESPONDENT BY : S HRI R.GOVINDARAJAN , DR / DATE OF HEARING : 0 7 .0 9 .2017 / DATE OF PRONOUNCEMENT : 13. 0 9 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX, GUNTUR DATED 25 .0 1 .201 7 FOR THE ASSESSMENT YEAR 2009 - 10 . 2 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR 2. THERE WAS A DELAY OF 18 DAYS IN FILING THE APPEAL BY THE AS S ESSEE. THE ASSESSEE IN HIS PETITION FOR CONDONATION OF DELAY STATED THAT HIS FATHER EXPIRED ON 24.03.2017 , D UE TO SUDDEN DEMISE OF HIS FATHER THE APPEAL COULD NOT BE FILED IN TIME. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE FOR CONDONATION OF DELAY AND HEARD BOTH THE PARTIES AND CONVINCED THAT THERE IS A REASONABLE CAUSE FOR DELAY IN FILING THE APP EAL AND ACCORDINGLY DELAY IS CONDONED AND THE APPEAL IS ADMITTED. 3. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ORDER PASSED BY LD.PR.CIT U/S 263 OF I.T.ACT. IN THIS CASE, THE ASSESSMENT WAS ORIGINALLY COMPLETED U/S 143(3) BY AN ORDER DATED 29.12.201 1. SUBSEQUENTLY, THE CIT HAS TAKEN UP THE CASE FOR REVISION AND PASSED AN ORDER U/S 263 ON 25.02.2014 DIRECTING THE ASSESSING OFFICER TO EXAMINE THE FOLLOWING ISSUES : (I) POSTAL DEPOSIT OF RS.4,70,580/ - AND INTEREST ACCRUED THEREON . (II) ACCOUNTS APPEARI NG IN THE NAME OF SYAMALA A/C IN THE BALANCE SHEET UNDER THE HEAD LOANS AND ADVANCES FOR RS.55 LAKHS. 3 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR (III) AGRICULTURAL LOANS APPEARING IN THE BALANCE SHEET ON THE LIABILITIES SIDE UNDER THE HEAD SECURED LOANS. 3.1. THE ASSESSING OFFICER EXAMINED THE ABOVE ISSUE S AND PASSED THE REASSESSMENT ORDER GIVING EFFECT TO THE CITS ORDER DATED 25.02.2014 , VIDE ORDER U/S 143(3) R.W.S. 263 DATED 09.03.2015. IN THE ORDER PASSED U/S 143(3) R.W.S. 263 ON 09 .03 .2015 THE ASSESSING OFFICER MADE THE ADDITION RELA TING TO THE INTEREST ACCRUED ON POSTAL DEPOSIT AND DROPPED THE REMAINING TWO ISSUES AFTER VERIFICATION. THE PR.COMMISSIONER OF INCOME TAX HAS TAKEN UP THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 263 DATED 09 . 03 . 2015 FOR REVISION FOR NOT CONDUCTING THE PROPER ENQUIRIES AS DIRECTED BY THE CIT BEFORE COMPLETING THE ASSESSMENT. THE PR.CIT WAS OF THE VIEW THAT THE ASSESSING OFFICER HAS NOT VERIFIED THE POSTAL DEPOSIT APPEARING IN THE BALANCE SHEET PROPERLY. SI MILARLY WITH RESPECT TO SYAMALA A/C, THE ASSESSI NG OFFICER HAS NOT CONDUCTED THE PROPER ENQUIRIES WITH REGARD TO THE CORRECTNESS OF THE INVESTMENT ON CONSTRUCTION AND ON ACQUIRING THE SITE . IT WAS FURTHER OBSERVED BY THE PR.CIT T HAT THOUGH THE CIT HAS DIRECTED THE A SSESSING OFFICER TO REFER TO DEPARTMENTAL VALUATION CELL BEFORE DECIDING THE ADEQUACY OR OTHERWISE 4 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR OF THE COST OF CONSTRUCTION, THE ASSESSING OFFICER FAILED TO REFER THE COST OF CONSTRUCTION TO THE VALUATION CELL. THE ASSESSING OFFICER WAS FURTHER DIRECTED TO ENQUIRE THE GENUINENESS OF THE TRANSACTION WITH REGARD TO MUNNANGI KALPANA DEVI, OWNER OF THE LAND, BUT THE ASSESSING OFFICER HAS NOT VERIFIED THE SAME . HENCE, THE PR.CIT WAS OF THE VIEW THAT APPARENT ERROR OF REASONING OF LAW OR FACT ON THE FACE OF IT IS ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 263 FOR REDOING THE SAME AFTER CONDUCTING THE PROPER ENQUIRIES AS PER THE DIRECTIONS GIVEN BY THE CIT. AGGRIEVED BY THE ORDER OF THE CIT, THE ASSESS EE IS IN APPEAL BEFORE THIS TRIBUNAL. 4. APPEARING FOR THE ASSESSEE, LD.AR ARGUED THAT THE CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263 AND ISSUED DIRECTIONS ON THE ISSUES OF POSTAL DEPOSIT, SYAMALA A/C AND AGRICULTURAL LOAN OF RELATIVES VIDE ORDER DATE D 25.02.2014. THE ASSESSING OFFICER TAKEN UP THE CASE , CALLED FOR THE DETAILS WHICH WAS VERIFIED BY THE ASSESSING OFFICER BEFORE PASSING THE REASSESSMENT ORDER GIVING EFFECT TO CITS ORDER U/S 263 AND TAKEN A CONSCIOUS DECISION WITH REGARD TO THE GENUINENE SS OF THE TRANSACTIONS 5 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR AND THE INVESTMENT MADE IN THE CONSTRU CTION OF THE BUILDING AND MADE THE ADDITION OF RS.37,646/ - RELATING TO THE INTEREST ACCRUED ON POSTAL DEPOSIT AND DROPPED THE REMAINING TWO ISSUES. THE ASSESSING OFFICER HAS CONDUCTED THE ENQUIRIES AS DIRECTED BY THE CIT ON THE ISSUES AND COMPLETED THE ASSESSMENT AFTER DUE VERIFICATION . LD.AR REFERRING TO THE FINDINGS GIVEN BY THE ASSESSING OFFICER IN ASSESSMENT ORDER PASSED U/S 14 3(3) R.W.S. 263 O N 09.03.2015 STATED THAT THE AO HAS EXAMINED ALL THE DETAILS , CONDUCTED ENQUIRIES AND TAKEN THE DECISION WHICH WAS POSSIBLE ON THE BASIS OF EVIDENCES. IT WAS FURTHER ARGUED THAT THE LACK OF PROPER ENQUIRY AND INADEQUACY OF ENQUIRY IS NOT A CASE FOR REVIS ION U/S 263. FURTHER, LD.AR ALSO ARGUED WITH RESPECT TO THE ABOVE ISSUE S THAT THE ASSESSEE HA D SUBMITTED ALL THE DETAILS TO THE AO. THEREFORE, LD.AR REQUESTED THAT ORDER PASSED U/S263 IS TO BE QUASHED. 5. ON THE OTHER HAND, LD.DR RELIED ON THE ORDERS OF THE PR.CIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. THE PR.CIT HAS TAKEN UP THE CASE FOR REVISION TO EXAMINE THE ISSUES RAISED BY HIS PREDECESSOR IN THE REVISION ORDER U/S 6 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR 263 DATED 25.02.2014 WITH RESPECT TO THE POSTAL DEPOSIT, AGRICULTURAL L OAN S AND CONSTRUCTION OF BUILDING IN THE NAME OF SYAMALA A/C. THE PR.CIT HAS GIVEN DIRECTION TO THE ASSESSING OFFICER TO CO MPLETE THE ASSESSMENT AFTER EXAMINATION OF THE DETAILS. THE ASSESSING OFFICER H AS EXAMINED THE DETAILS SUBMITTED BY THE ASSESSEE AND COMPLETED THE ASSESSMENT WITH THE FOLLOWING FINDINGS/OBSERVATIONS. 1 . INTE R EST ON POSTAL DEPOSITS: - THE ASSESSEE HAS CAME FORWARD TO ADMIT THE SAME FOR TAX PURPOSE AS THEY ARE UNABLE TO PRODUCE THE DETAILS OF CLOSED POSTAL DEPOSITS AND, HENCE, INTEREST OF RS37,646/ - ADDED TO THE IN C O M E ASSESSED. 2. AGRICULTURAL LOAN. THE ASSESSEE HAS TAKEN AGRICULTURAL LOAN FROM ING VISVA BANK IN THE YEAR 1996. THE ASSESSEE HAS FILED ALL NECESSARY DOCUMENTS A N D EVIDENCES FOR THE LOAN TAKING AND REPAID. THE SAME IS EX A MINED WITH REFERENCE TO THE BANK LOAN ACCOUNTS AND INFORMATION FILED. 3. CONSTRUCTION OF BUILDING: - THE ASSESSEE HAS CONSTRUCTED BUIL DING ON L EASE SITE . CONFORMATION FROM THE LAND OWNER FILED. THE ASSESSEE HAS INCURRED AN AMOUNT O F 5 5 LAKHS DURING THE YEAR OF ASSESSMENT AND ANOTHER 5 L AKHS IN SUBSEQUENT YEA R , AGGREGATE AMOUNT TO 1.10 CRONES, FOR THE SAME, ASSESSEE HAS FILED GOVT. REGISTERED VALUERS VALU ATION REPORT THE SAME EXAMINED. 7. FROM THE ASSESSMENT ORDER, IT I S ESTABLISHED THAT THE ASSESSING OFFICER HAS EXAMINED THE TAXABILITY OF INTEREST ON POSTAL DEPOSITS, AGRICULTURAL LOANS AND CONSTRUCTION OF BUILDING ACCOUNT AND TAKEN A CONSCIOUS DECISION IN RESPECT OF AGRICULTURAL LOANS AND THE COST OF CONSTRUCTION OF BUILDING THAT NO ADDITION IS WARRANTED AND THE 7 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR TRANSACT IONS WERE GENUINE. WITH REGARD TO THE AGRICULTURAL LOAN, THE ASSESSING OFFICER S TATED THAT ALL THE EVIDENCES WERE FILED AND EXAMINED. WITH RESPECT TO THE CONSTRUCTION ACCOUNT, THE ASSESSING OFFICER EXAMINED THE DETAILS AND ALSO OBTAINED THE G OVT. VALUER S REPORT AND ACCEPTED THE COST OF CONSTRUCTION . PRIMA FACIE, THE ASSESSING OFFICER HAS CONDUCTED THE NECESSARY ENQUIRES, VERIFIED THE INFORMATION A ND TAKEN THE CONSCIOUS DECISION BEFORE COMPLETING THE ASSESSMENT . HOWEVER, PR.CIT WAS OF THE VIEW THAT THE ASSESSING OFFICER HAS NOT CONDUCTED PROPER ENQUIRIES AND THERE WAS APPARENT ERROR OF REASON ING AND LAW BUT NOT SPECIFIED THE ERROR COMMI TTED BY THE AO AND HOW IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE . N OT CONDUCTING THE PROPER ENQUIR IES OR IN ADEQUATE ENQUIRY DOES NOT GIVE JURISDICTION TO THE CIT FOR TAKING UP THE CASE FOR REVISION U/S 263. THE PR.CIT SHOULD MAKE OUT CASE THAT THE ASS ESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THERE SHOULD BE AN INCOME WHICH IS NOT BROUGHT TO TAX BY AO FOR REVISION. THE PR.CIT EXCEPT STATING THAT PROPER ENQUIRIES WE RE NOT CONDUCTED BY THE AO , DID NOT SPECI FY HOW THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND WHAT WAS THE INCOME UNDERSTATED OR UNDER ASSESSED BY THE AO . SINCE THE ASSESSING OFFICER 8 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR HAS CONDUCTED THE ENQUIRIES AND TAKEN THE DECISION ON ALL THE ABOVE ISSUES THERE IS N O CASE OF REVISION. THEREFORE, WE ARE UNABLE TO SUSTAIN THE ORDER OF THE LD. PR.CIT AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED U/S 263 AND RESTORE THE ASSESSMENT ORDER. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13 TH S EP 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 13 . 0 9 .2017 L. RAMA, SPS 9 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR /COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT G.V.S.L.KANTHA RAO , C/O M/S P.NAGESWARA RAO& CO. AUDITORS, ANJUMAN BUILDINGS , LALAPET , GUNTUR 522 003 2 . / THE RESPONDENT THE COMMISSIONER OF INCOME TAX , GUNTUR CHARGE , GUNTUR, RAJKAMAL COMPLEX , MAIN ROAD, LAKSHMIPURAM , GUNTUR 522 007 3. THE ADDL.COMMISSIONER OF INCOME TAX, RANGE - 1, GUNTUR 4 . , , / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM 10 ITA NO. 228 /VIZ/201 4 G.V.S.L.KANTHA RAO, GUNTUR