C.Chinanarayana Reddy, Gudivada V. THE ITO, WARD - 1, Gudavalli

ITA 250/VIZ/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8606 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA; R K SINGH DRS
• Section: 143(3); 133A; 263

Judgement Text

ITA NOS.250/VIZAG/2014 M. CHINANARAYANA REDDY, GUDIVADA IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO.250/VIZAG/2014 ASSESSMENT YEAR : 200 6 - 07 M. CHINA NARAYANA REDDY GUDIVADA VS. ITO WARD-1 GUDIVADA (APPELLANT) (RESPONDENT) PAN NO.AAKHM3487M ASSESSEE BY: SHRI C. SUBRAHMANYAM, AR REVENUE BY: SHRI K.V.N. CHARYA & SHRI R.K. SINGH, DRS DATE OF HEARING : 25.11.2014 DATE OF PRONOUNCEMENT : 25.11.2014 ORDER PER D. MANMOHAN, VICE PRESIDENT:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) VIJAYAWADA AND IT PERTAINS TO THE ASSESS MENT YEAR 2006-07. FACTS NECESSARY FOR THE DISPOSAL OF THE APPEAL ARE STATED IN BRIEF. 2. THE ASSESSEE-HUF IS ENGAGED IN THE BUSINESS OF M ONEY LENDING. IT ADMITTED TOTAL INCOME OF RS.22,90,000/- AND AGRICUL TURAL INCOME OF RS.8 LAKHS CONSEQUENT TO SURVEY OPERATIONS CONDUCTED U/S 133A OF THE INCOME-TAX ACT, 1961 IN THE CASE OF M/S. SRI NARAYANA SWAMY FINANCI ERS, GUDIVADA. ASSESSMENT WAS ACCORDINGLY COMPLETED BY THE ASSESSI NG OFFICER U/S 143(3) R.W.S. 147 OF THE ACT. 3. THEREAFTER, THE LD. COMMISSIONER EXAMINED THE RE CORDS FOR THE ASSESSMENT YEAR 2006-07 AND NOTICED THAT THE ASSESS ING OFFICER DID NOT EXAMINE CERTAIN VITAL ASPECTS IN THE MATTER AND THE REFORE HIS ORDER IS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF REVENUE. IT MAY BE NOTICED THAT THE AO REFERRED THE BUILDING TO THE VALUATION CELL TO DETERMINE THE COST OF ITA NOS.250/VIZAG/2014 M. CHINANARAYANA REDDY, GUDIVADA 2 CONSTRUCTION. THE DVO VALUED THE COST OF THE BUILD ING AT RS.90.73 LAKHS, WHEREAS THE ASSESSEE EXPLAINED THE SOURCES ONLY FOR RS.69.80 LAKHS. AGAINST THE DIFFERENCE OF RS.20.93 LAKHS THE ASSESSEE OFFER ED AN AMOUNT OF RS.22 LAKHS DURING THE COURSE OF SURVEY AND STATED THAT T HE SAID BUILDING BELONGS TO HUF AND THE FAMILY MEMBERS WAS HAVING AGRICULTURAL INCOME. THE AO HAS NOT EXAMINED THE ORIGIN OF HUF AND THE CASH FLOW ST ATEMENT OF THE ASSESSEE. HE ALSO OBSERVED THAT THE AO SHOULD HAVE EXAMINED T HE CORRECTNESS OF THE AGRICULTURAL INCOME. WITH THESE OBSERVATIONS, THE MATTER WAS SET ASIDE TO THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT AS PER THE PROVISIONS OF THE ACT. IN OTHER WORDS, THE DIRECTION WAS TO RE-EXAMINE MATT ER BY CALLING FOR FURTHER DETAILS. IN THE LIGHT OF THE DIRECTION OF THE REVIS IONAL AUTHORITY, THE ASSESSING OFFICER CALLED FOR THE DETAILS AND FINALIZED THE AS SESSMENT BY COMPUTING THE TOTAL INCOME AT RS.56,56,000/- WHICH WAS CHALLENGED BY THE ASSESSEE BEFORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL ON THE GROUND THAT THE ASSESSMENT WAS COMPLETED AS PER THE DIRECTION OF TH E COMMISSIONER OF INCOME-TAX U/S 263 OF THE ACT AND THEREFORE IT CANNO T BE DECIDED BY THE CIT(A). 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE U S CONTENDING, INTER- ALIA, THAT THE COMMISSIONER OF INCOME-TAX SMT. NARAS AMMA ERRED IN UNDERSTANDING THE DIRECTION GIVEN BY THE REVISIONAL AUTHORITY AND ASSUMED THAT THERE IS NO RIGHT TO THE ASSESSEE TO PREFER AN APPEAL BEFORE THE CIT(A) AGAINST THE ORDER PASSED BY THE AO U/S 143(3) R.W.S . 263 OF THE ACT. 5. WE HAVE HEARD THE LD. D.R. AS WELL AS THE LD. CO UNSEL FOR THE ASSESSEE AND CAREFULLY EXAMINED THE MATTER. IN OUR CONSIDERED OPINION, THE CIT(A) VIJAYAWADA HAS NOT APPLIED HER MIND TO THE I SSUE ON HAND. THE REVISIONAL AUTHORITY HAS MERELY GIVEN A DIRECTION T O THE ASSESSING OFFICER TO EXAMINE THE MATTER AFRESH. IN OTHER WORDS, THERE IS NO SPECIFIC DIRECTION TO THE ASSESSING OFFICER TO MAKE THE IMPUGNED ADDITION S. THEREFORE, IT WAS OPEN FOR THE ASSESSING OFFICER TO EXAMINE THE MATERIAL P LACED BEFORE HIM AS TO WHETHER IT WAS A FIT CASE FOR MAKING ADDITION OR NO T AND IN THE EVENT OF ITA NOS.250/VIZAG/2014 M. CHINANARAYANA REDDY, GUDIVADA 3 MAKING AN ADDITION, THE ASSESSEE CAN ALWAYS CHALLEN GE BEFORE THE FIRST APPELLATE AUTHORITY ON THE GROUND THAT THE AO MADE THE IMPUGNED ADDITIONS ARBITRARILY DISBELIEVING THE SOURCES FOR INVESTMENT AND THE EXPLANATIONS CONNECTED THERETO. SINCE THE CIT(A) HAS NOT EXAMIN ED THE MATTER IN THE CORRECT PERSPECTIVE, WE DEEM IT FAIR AND PROPER TO SET ASIDE THE ORDER PASSED BY THE CIT(A) VIJAYAWADA AND DIRECT THE CIT(A) TO D ECIDE THE APPEAL AFRESH ON MERITS WITHOUT BEING OBSESSED BY THE ORDER PASSE D BY THE REVISIONAL AUTHORITY U/S 263 OF THE ACT. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 25 TH NOVEMBER14 SD/- SD/- (J. SUDHAKAR REDDY) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT VG/SPS VISAKHAPATNAM, DATED 25 TH NOVEMBER, 2014 COPY TO 1 SRI M. CHINA NARAYANA REDDY, D.NO.11/175-24, RATN AMALA STREET, GUDIVADA 2 THE ITO WARD-1, GUDIVADA 3 THE CIT, VIJAYAWADA 4 THE CIT(A), VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM