Salla Narsa Reddy, Nizamabad, Nizamabad V. ITO, Ward-1, Nizamabad, Nizamabad

ITA 28/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2722 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-08-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 11-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Unexplained cash credit; Business income; Peak credit; Additional evidence
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A. NO. 28/HYD/2016 ASSESSMENT YEAR: 2011-12 SHRI SALLA NARSA REDDY, ARMOOR (M) NIZAMABAD [PAN: BACPS3559K] VS INCOME TAX OFFICER, WARD-1, NIZAMABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A. SRINIVAS, AR FOR REVENUE : SMT. N. SWAPNA, DR DATE OF HEARING : 01-08-2017 DATE OF PRONOUNCEMENT : 02-08-2017 O R D E R PER CHANDRA POOJARI, A.M. : THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDERABAD, DATED 30-10-2015. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN IND IVIDUAL E-FILED RETURN OF INCOME FOR THE AY. 2011-12 ON 25-03 -2012 ADMITTING TOTAL INCOME OF RS. 1,97,320/-. THE RETURN WA S PROCESSED U/S. 143(1) OF THE INCOME TAX ACT [ACT]. ACCORDINGLY, NOTICES U/S. 143(2) WERE ISSUED. THE ASSESSEE APPEARED ON 22-11 -2013 AND NOTED THE REQUIREMENTS FOR COMPLETION OF ASSESSMENT. HOWEVER, I.T.A. NO. 28/HYD/2016 :- 2 - : DUE TO REASONS BEYOND HIS CONTROL AND DUE TO PERSONAL FAMILY EXIGENCIES COULD NOT FILE THE REQUIRED DOCUMENTS. THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT DETERMINING TOTAL INCOME AT RS.46,72,171/-. WHILE DOING SO, THE ASSESSING OFFIC ER (AO) MADE THE FOLLOWING ADDITIONS: RS. I. UNEXPLAINED CASH CREDITS IN BANKS U/S. 68 OF THE ACT 35,62,000 II. ESTIMATE OF BUSINESS INCOME AT 12% ON THE TURNOVER 9,24,351 AGGRIEVED BY THE ABOVE ADDITIONS, THE ASSESSEE WAS IN APPEAL BEFORE THE CIT(A). 3. BEFORE THE CIT(A), ASSESSEE FILED CERTAIN ADDITION AL EVIDENCES WHICH ARE NOT AT ALL ADMITTED BY THE CIT(A). AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE HAS RAISED THE FOLLOWING GROU NDS: 1. THE ORDER OF THE APPELLATE COMMISSIONER IS CONT RARY TO LAW, FACTS AND CIRCUMSTANCES. 2. THE APPELLATE COMMISSIONER ERRED IN CONFIRMING T HE ESTIMATE OF THE TURNOVER MADE BY THE AO, WHEN THE ASSESSEE DERIVES INCOME ONLY FROM COMMISSION. 3. THE APPELLATE COMMISSIONER ERRED IN SUSTAINING T HE ADDITIONS MADE BY THE AO IN ESTIMATING THE TURNOVER OF THE ASSESSEE A T 12%, WHEN IN FACT THE SAME WAS NOT THE TURNOVER OF THE ASSESSEE. 4. THE APPELLATE COMMISSIONER ERRED IN ESTIMATING T HE TURNOVER AT RS.1,12,64,930/-, AS AGAINST THE ESTIMATE OF TURNOV ER MADE BY THE AO AT RS.77,02,930/-, WITHOUT GIVING ANY NOTICE OF SUCH E NHANCEMENT TO THE ASSESSEE. 5. THE APPELLATE COMMISSIONER ERRED IN SUSTAINING T HE ADDITIONS MADE BY THE AO U/S.68, AMOUNTING TO RS.21,65,200/- ALBEIT O N A DIFFERENT PREMISE. I.T.A. NO. 28/HYD/2016 :- 3 - : 6. THE APPELLATE COMMISSIONER ERRED IN THE METHODOL OGY OF CALCULATING THE PEAK CREDIT, AND DENYING THE ASSESSEE OF THE BENEFI T OF REDEPOSIT IN THE BANK ACCOUNT. 7. THE APPELLATE COMMISSIONER ERRED IN ADDING AN AM OUNT OF RS.12,00,000/- AS EXPENDITURE ON HOUSEHOLD INCOME, WITHOUT GIVING ANY NOTICE OF SUCH ENHANCEMENT TO THE ASSESSEE. 8. THE APPELLATE COMMISSIONER ERRED IN NOT TAKING O N RECORD THE EXPLANATIONS FILED WITH RESPECT TO THE BANK ACCOUNT S AT THE TIME OF HEARING, ON THE PREMISE THAT THE SAME WAS IN THE NATURE OF A DDITIONAL EVIDENCE. 9. ANY OTHER GROUND WHICH THE ASSESSEE MIGHT URGE E ITHER BEFORE OR AT THE TIME OF HEARING. 4. BEFORE US, LD.AR SUBMITTED THAT CIT(A) ESTIMATED THE INCOME AT RS. 13,51,792/- AS AGAINST THE ESTIMATED TURNOVER OF RS. 9,24,351/- MADE BY THE AO, WHICH WAS RESULTED IN ENHA NCEMENT OF THE INCOME OF ASSESSEE WITHOUT GIVING OPPORTUNITY OF HE ARING TO THE ASSESSEE. 4.1. HE ALSO SUBMITTED THAT THE ASSESSEE BEFORE THE CIT (A) HAS FILED ADDITIONAL EVIDENCES WHICH CONTAINS THE FOLLOW ING: S.NO. DESCRIPTION PAGE NOS OF PAPER BOOK 1 COMPUTATION OF INCOME FOR THE AY. 2011- 12 1-2 2 RECEIPTS AND PAYMENTS ACCOUNT 3 3 BANK ACCOUNT FROM 01-04-2010 TO 31- 03-2011 4-10 4 CASH BOOK 11-14 5 AXIS BANK ACCOUNT FROM 01-04-2008 TO 31-03-2009 15-22 6 KOTAK MAHINDRA BANK LIMITED FROM 01- 04-2008 TO 31-03-2009 23-32 7 COMPUTATION OF INCOME FOR THE AY. 2010- 11 33 8 COMPUTATION OF INCOME FOR THE AY. 2009- 10 34 I.T.A. NO. 28/HYD/2016 :- 4 - : ACCORDING TO HIM, THESE DOCUMENTS ARE VERY IMPORTANT TO DECIDE THE ISSUE IN DISPUTE, WHICH ARE NOT AT ALL ADMITTED BY THE CIT(A) FOR THE REASONS BEST KNOWN TO HIM AND REQUESTED THAT THESE MA Y BE ADMITTED AND THEREAFTER IT MAY BE REMITTED TO CIT(A) FOR CONSIDERATION. THE DR RELIED ON THE ORDER OF THE CIT( A) AND IS OBJECTED FOR ADMISSION OF ADDITIONAL EVIDENCE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR OPINION, IN THE INTEREST OF JUSTICE, THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE C IT(A) IS TO BE CONSIDERED, WHILE DECIDING THE ISSUE IN DISPUTE. MORE SO, THE ORDER PASSED BY THE AO IS AN EX-PARTE ORDER U/S. 144 OF THE ACT. ACCORDINGLY, WE DIRECT THE CIT(A) TO ADMIT THE ADDITIONAL EVIDENCE FILED BEFORE HIM AS MENTIONED ABOVE AND RE-ADJUDICATE THE ISSUE IN DISPUTE IN ACCORDANCE WITH LAW. ACCORDINGLY, THE ISSU E IN DISPUTE IS REMITTED TO THE FILE OF CIT(A) TO RE-ADJUDICATE AFT ER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND AUGUST, 2017 SD/- SD/- (D. MANMOHAN) (CHANDRA POOJARI) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 2 ND AUGUST, 2017 TNMM I.T.A. NO. 28/HYD/2016 :- 5 - : COPY TO : 1. SHRI SALLA NARSA REDDY, C/O. MR. D. VENKATA RAMA NA, 5-6-216, SARASWATHI NAGAR, NIZAMABAD. 2. INCOME TAX OFFICER, WARD-1, NIZAMABAD. 3. CIT (APPEALS)-5, HYDERABAD. 4. PR.CIT-5, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.