ACIT, Central Circle-6, Hyderabad V. Shri K. Muthyam Reddy, R.R.Dist

ITA 323/HYD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77916 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 04-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: C P RAMASWAMY
• Keywords: Unexplained cash credit; Unexplained expenditure; Capital asset; Search and seizure; Additional evidence
• Section: 54B; 54F; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 1676/HYD/2010 2007-08 MR. K. RANGA REDDY, HYDERABAD PAN AMFPR5916F DCIT, C.C.6, HYDERABAD. 22/HYD/2011 2008-09 DCIT, C.C.6 HYDERABAD MR. K. RATANGAPANI REDDY, SHAMSHABAD, R.R. DIST., PAN AWUPK 7271R 31/HYD/2011 2002-03 MR. K. RATANGAPANI REDDY, SHAMSHABAD, R.R. DIST., PAN AWUPK 7271R DCIT, C.C.6 HYDERABAD 32/HYD/2011 2003-04 33/HYD/2011 2004-05 34/HYD/2011 2005-06 35/HYD/2011 2006-07 36/HYD/2011 2007-08 37/HYD/2011 2008-09 323/HYD/2011 2003-04 ACIT, C.C.6 HYDERABAD MR. K. MUTHYAM REDDY, RAJENDRA NAGAR MANDAL, R.R DIST. PAN AMFPR5915G 411/HYD/2011 2008-09 ACIT, C.C.6 HYDERABAD 428/HYD/2011 2004-05 MR. K. MUTHYAM REDDY, RAJENDRA NAGAR MANDAL, R.R DIST. PAN AMFPR5915G DCIT, C.C.6 HYDERABAD. 429/HYD/2011 2003-04 430/HYD/2011 2002-03 431/HYD/2011 2005-06 432/HYD/2011 2006-07 433/HYD/2011 2007-08 434/HYD/2011 2008-09 FOR ASSESSEE : MR. C.P. RAMASWAMY FOR REVENUE : MR. P. SOMASEKHAR REDDY DATE OF HEARING : 22.05.2014 DATE OF PRONOUNCEMENT : 28.05.2014 2 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. ORDER PER BENCH THESE GROUP OF 18 APPEALS BY THREE ASSESSEES AND CROSS-APPEALS BY REVENUE IN SOME OF THE YEARS ARE AGAINST SIMILAR BUT SEPARATE ORDERS OF THE CIT(A). IN ALL T HESE APPEALS, ISSUES WERE COMMON, AND THE CONCISE GROUNDS GROUP-W ISE ARE AS UNDER : ITA.NO. A.Y. ISSUE K.RATANGAPANI REDDY 31, 32, 33, 34, 35 AND 36/HYD/2011 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 CLAIM OF AGRICULTURAL INCOME NOT ALLOWED. 36/HYD/2011 2007-08 I. CLAIM OF AGRICULTURAL INCOME NOT ALLOWED. II. RECEIPT OF SALARY OF RS.96,000 III. UNEXPLAINED CASH CREDIT OF RS. 5 LAKHS. 37/HYD/2011 2008-09 I. CLAIM OF AGRICULTURAL INCOME NOT ALLOWED. II. RECEIPT OF SALARY OF RS.96,000. III. COMMISSION RECEIVED FROM DEMI REALTORS RS. 50 LAKHS. 22/HYD/2011 2008-09 PROTECTIVE ASSESSMENT OF INCOME IN TRANSACTION WITH DLF GROUP DELETED. K. RANGA REDDY 1676/HYD/2011 2007-08 UNEXPLAINED CASH CREDIT OF RS.5.56 LAKHS. 3 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. K.MUTHYAM REDDY 430, 431, 432 AND 433/HYD/2011 2002-03, 2005-06, 2006-07 2007-08 CLAIM OF AGRICULTURAL INCOME NOT ALLOWED. 429/HYD/2011 2003-04 I. CLAIM OF AGRICULTURAL INCOME NOT ALLOWED. II. SALE OF LAND FOR MARWA TOWNSHIP CHARGEABILITY AS WELL AS QUANTIFICATION. III.UNEXPLAINED EXPENDITURE /INVESTMENT IN PURCHASE OF LAND/HOUSE. 323/HYD/2011 2003-04 COMPUTATION OF CAPITAL GAINS LAND SOLD FOR MARWA TOWNSHIP. 428/HYD/2011 2004-05 I. CLAIM OF AGRICULTURAL INCOME NOT ALLOWED. II.COMPUTATION OF CAPITAL GAINS ON SALE OF LAND TO RADHA REALTY. III.UNEXPLAINED EXPENDITURE /INVESTMENT IN PURCHASE OF LAND/HOUSE. 434/HYD/2011 2008-09 I. LAND TRANSFERRED IS IT A CAPITAL ASSET. II. COMPUTABILITY OF CAPITAL GAINS IN TRANSACTION WITH DLF. III. AMOUNT OF SALE CONSIDERATION TO BE ADOPTED. IV. ASSESSMENT OF CASH RECEIVED FROM DEMI REALTORS V. TREATMENT OF AC. 10.20 LAND ASSIGNED TO RATNAGAPANI REDDY BY DEMI REALTORS CONSIDERATION IN KIND OR MERE RE-CONVEYANCE OF OWN PROPERTY AND NOT TAXABLE EVENT AND VALUATION OF THIS LAND. 4 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. VI. DENIAL OF SECTION 54F AND SECTION 54B BENEFIT. VII.NATURAL JUSTICE AND SUFFICIENCY OF OPPORTUNITY. 411/HYD/2011 2008-09 DELETION OF ADDITION RS.13 CRORES BEING AGGREGATE SALE CONSIDERATION ACCRUING FROM DLF GROUP COMPANIES & CASH RECEIVED RS. 10 CRORES FROM DEMI REALTORS, ASSESSED SUBSTANTIVELY IN ASSESSEES HANDS AND PROTECTIVELY IN FAMILY MEMBERS HANDS, BECAUSE THEY WERE UPHELD SUBSTANTIVELY IN THE FAMILY MEMBERS HANDS. 2. AT THE OUTSET, LD. COUNSEL SUBMITTED THAT THE ISSUE OF CAPITAL GAINS ON THE SALE OF LAND BY THESE GROUP OF ASSESSEES WHICH ARE PART OF OTHER GROUP OF ASSESSEE S IS SIMILAR WHEREIN ITAT HAS SET ASIDE THE APPEALS TO THE LD. C IT(A) ON THE REASON THAT ADDITIONAL GROUNDS RAISED BY THE ASSESS EE BEFORE THE LD. CIT(A) WERE NOT ADJUDICATED. IT WAS BROUGHT TO OUR NOTICE THAT ITAT AFTER CONSIDERING THE FACT THAT AD DITIONAL GROUNDS WERE INDEED RAISED BEFORE THE LD. CIT(A) AN D WERE NOT ADJUDICATED HAD SET ASIDE THE ASSESSMENTS. IN THE A BOVE APPEALS, IN THE CASE OF MR. K. MUTHYAM REDDY AND MR . RATANGAPANI REDDY, THE ISSUES ARE SIMILAR FOR A.Y. 2008-09 AND ALSO FOR A.YS. 2003-04 AND 2004-05 WHEREIN THER E IS CAPITAL GAINS ISSUE. 3. LD. COUNSEL FURTHER SUBMITTED THAT ASSESSEES HEREIN HAVE SOLD SOME AGRICULTURAL LANDS AND TAXABI LITY OF THE 5 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. AMOUNTS AND DETERMINATION OF NATURE OF THE LAND SOL D ARE THE ISSUES. FURTHER, ADDITIONAL GROUNDS RAISED ALSO GOE S TO THE ROOT OF THE MATTER WHICH HAS NOT BEEN ADJUDICATED BY THE LD. CIT(A) EARLIER. HE ALSO BROUGHT TO OUR NOTICE THE CORRESPO NDENCE IN THE CASE OF MR. K. MUTHYAM REDDY AND THE AFFIDAVITS FILED BY THE COUNSEL FOR THE ASSESSEE AND REPORT OF THE CIT( A) TO SUBMIT THAT ALL THESE APPEALS ARE REQUIRED TO BE SET ASIDE ON SIMILAR MANNER FOR FRESH ADJUDICATION. 4. LEARNED D.R. HOWEVER, ADMITTED THE FACTS AND AL SO PLACED COPY OF THE REPORT OF THE CIT(A)-I ADMITTING THAT ITAT MAY CONSIDER SETTING ASIDE THE ISSUE TO THE PRESENT CIT(A), BY LETTER DATED 20.03.2013. 5. THE COORDINATE BENCH IN THE GROUP OF CASES FROM ITA.NO.1366 TO 1394/HYD/2010 FOR A.Y. 2008-09 DT.05 -08- 2011 HAD CONSIDERED SIMILAR ISSUE AND DECIDED ASSES SEES APPEALS AS UNDER : 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT OUT OF THE ADDITIONAL GROUNDS OF APPEAL RAISED BY T HE ASSESSEE BEFORE THE CIT(A), ADDITIONAL GROUND NO.1 IS GENERA L, AND THE CIT(A) HAS ADJUDICATED UPON ONLY ITA NO.1366/HYD/10 & 10 OTHERS ADDITIONAL GROUND OF APPEAL NO.2 RAISED IN T HESE APPEALS OF THE ASSESSEES AND HAS RECORDED HIS FINDINGS, VID E PARA-7 OF HIS ORDER IN THE CASE OF SHRI K.RAVINDER REDDY (APP ELLANT IN ITA NO.1371/HYD/2010), WHICH WAS FOLLOWED IN OTHER APPE ALS OF THE ASSESSEES, AS FOLLOWS - 07.0 DURING THE APPELLATE PROCEEDING THE APPELLAN T ALSO RAISED AN ADDITIONAL GROUND STATING THAT THE ASSET TRANSFERRED BY HIM WAS AGRICULTURAL LAND AND NOT A CAPITAL ASSET W ITHIN THE MEANING OF SEC.2(14) OF THE ACT. OTHERWISE ALSO, CO MPUTATION OF CAPITAL GAIN IS NOT POSSIBLE. I DO NOT FIND FORCE I N THE ADDITIONAL GROUND RAISED BY THE APPELLANT. THE APPELLANT HAD H IMSELF SHOWN CAPITAL GAIN IN ITS RETURN OF INCOME MEANING THEREBY THAT HE HIMSELF HAD ADMITTED THAT THE ASSET TRANSFERRED WAS A CAPITAL 6 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. ASST. OTHERWISE ALSO, THERE IS NOTHING ON RECORDS T O SHOW THAT THE APPELLANT HAD IN FACTS OLD AGRICULTURAL LAND OR AGRICULTURAL OPERATION WAS BEING CARRIED ON THE SAME LAND. IN FA CT, THE LAND IN WHICH THERE WERE SEVERAL CLAIMANTS, IT IS UNIMAG INABLE THAT ONE OF THE CLAIMANTS CAN CARRY ON THE AGRICULTURAL OPERATION TO THE DETRIMENT OF OTHERS INTEREST AND OTHERS WOULD B E SILENT SPECTATORS. MS. RABIYA BEGUM THE SARPANCH OF NEKNAM PURA ALONG WITH HER SON HUSNUDDIN HAD DEPOSED THAT NO AG RICULTURAL OPERATIONS WERE CARRIED ON IN THE SAID LAND FOR LAS T SEVERAL YEARS DUE TO LITIGATION PENDING BEFORE COURTS. FURTHER TH E AGRICULTURAL INCOME CLAIMED BY THE APPELLANT AND OTHER FAMILY ME MBERS WERE NOT ACCEPTED BY THE AO IN THE ASSESSMENTS FOR A.Y. 2002-03 TO 2007-08. IN THE SUBMISSION FILED DURING THE APPELLA TE PROCEEDINGS FOR THOSE ASSESSMENT YEARS THE APPELLAN T DID NOT PRESS THE ISSUE IN THE ABSENCE OF ANY FURTHER EVIDE NCE IN SUPPORT OF AGRICULTURAL INCOME. EVEN IN THE LOK ADALAT ORDE R THE APPELLANT AND/OR THE OTHER FAMILY MEMBERS OF THE AP PELLANT HAD JUST STAKED THEIR CLAIM LIKE MANY OTHERS AND IT IS FOR THE RELINQUISHMENT OF SUCH DISPUTED RIGHT, THAT THE AMO UNTS WERE RECEIVED BY THE APPELLANT AND OTHER FAMILY MEMBERS. EVEN IN THE LOK ADALAT ORDER IT IS MENTIONED THAT THE ORIGINAL OWNER AND PATTADAR OF THE LAND WAS MD.ALEEMUDDIN AND HIS LEGA L HEIRS. APPARENTLY, SUIT FILED BY THE APPELLANTS FATHER FO R DECLARATION OF TITLE AND PERPETUAL INJUNCTION WAS DISMISSED BY ADD ITIONAL SUBORDINATE JUDGE, RANGA REDDY DISTRICT. THUS, CONS IDERING THE AFORESAID FACT, I DO NOT FIND ANY SUBSTANCE IN THE ADDITIONAL GROUNDS RAISED BY THE APPELLANT. THE SAME ARE DISMI SSED. HE HAS, HOWEVER, NOT DEALT WITH THE OTHER ADDITIONA L GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THESE APPEALS. IN VIEW OF THE FACT THAT THE CIT(A) HAS NOT ADJUDICATED UPON THE A DDITIONAL GROUNDS OF APPEAL NO.3, 4 AND 5 IN ANY OF THESE APP EALS OF THE ASSESSEE, NOR HAS HE RECORDED HIS FINDINGS REGARDIN G ADMISSIBILITY OF THESE ADDITIONAL GROUNDS OF APPEAL NO.3 TO 5 RAISED BY THE ASSESSEE BEFORE HIM, WE ARE OF THE VI EW THAT IT SHALL BE IN THE INTERESTS OF JUSTICE TO SET ASIDE T HE ISSUE TO THE FILE OF THE CIT(A) IN ALL THESE APPEALS OF THE ASSESSEE, WITH A DIRECTION TO PASS A DE NOVO APPELLATE ORDER IN ACCO RDANCE WITH LAW, AFTER ALLOWING PROPER OPPORTUNITY OF HEARING T O BOTH THE PARTIES. WE MAKE IT CLEAR THAT WE ARE SETTING ASIDE THE APPELLATE ORDERS OF THE CIT(A) IN ALL THESE APPEALS OF THE AS SESSEES AS A WHOLE AND THE CIT(A) SHALL PASS DE NOVO APPELLATE O RDERS ON ALL THE ISSUES BEFORE HIM, AFTER RECORDING HIS FINDING ON THE ADMISSIBILITY OF THE ADDITIONAL GROUNDS OF APPEAL R AISED BEFORE HIM. WE DIRECT ACCORDINGLY. 6. LIKEWISE, IN REVENUES APPEALS IT WAS DECIDED AS UNDER : 7 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. 7. WE HAVE HEARD THE PARTIES. IN VIEW OF THE FACT THAT WE HAVE, WHILE DEALING WITH THE ASSESSEES APPEALS HEREINABOVE, SET ASIDE THESE MATTERS TO THE FILE OF THE CIT(A) FOR PASSING THE APPELLATE ORDERS DE NOVO, DU LY ADJUDICATING UPON THE ADDITIONAL GROUNDS NO.3, 4 AN D 5 RAISED BY THE ASSESSEES IN THEIR APPEALS, AFTER CON SIDERING ADMISSIBILITY THEREOF, WE ARE OF THE VIEW THAT IT S HALL BE JUSTIFIED TO RESTORE THE ISSUE INVOLVED IN THIS REV ENUE APPEAL ALSO TO THE FILE OF THE CIT(A) TO REDECIDE T HE SAME DE NOVO IN ACCORDANCE WITH LAW AFTER PROVIDING REASONA BLE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. WE DIRE CT ACCORDINGLY. 7. LD. CIT(A) ALSO FILED LETTER DATED 20.03.2013 I N THE CASE OF MR. K. MUTYAM REDDY AS UNDER : 2. ON VERIFICATION OF RECORDS, IT IS SEEN THAT THE THEN CIT(A)-I, HYDERABAD HAD CALLED FOR A REPORT FROM THE ADDL. CI T, CENTRAL RANGE-1, HYDERABAD ON 3.8.2010 ITSELF VIDE HIS LETTER NO. APPEAL NOS. 336 TO 342/09-10 AND FIXED T HE CASE FOR HEARING ON 11.08.2010. A COPY OF THE SAID LETTER IS ENCLOSED. 3. FROM THE ORDER SHEET ENTRIES, IT IS SEEN THAT TH E CASE WAS DISCUSSED WITH THE A.O. ON 30.12.2010 THEREAFTER. A COPY OF THE SAID ORDER SHEET ENTRY IS ALSO ENCLOSED . 4. IN VIEW OF THE FACT THAT AFTER CALLING FOR THE R EPORT ON ADDITIONAL EVIDENCE, THE CASE WAS DISCUSSED WITH TH E A.O., IT APPEARS THAT THE ISSUES RAISED THEREIN WER E ALSO DISCUSSED WITH HIM. HOWEVER, SINCE THE FACT OF SUBMISSION AND COMMUNICATION OR OTHERWISE OF ADDITIONAL EVIDENCE DOES NOT FIND A MENTION IN THE APPELLATE ORDER, THE HONBLE ITAT MAY CONSIDER SETT ING ASIDE THE ISSUE TO THE PRESENT CIT(A). 8. THE FACTS OF THE CASE ARE THAT THERE WAS SEARCH AND SEIZURE OPERATIONS IN THE GROUP AND CONSEQUENTLY PR OCEEDINGS UNDER SECTION 153A WERE INITIATED. ASSESSEE CONTEND ED THAT WHAT THEY HAVE SOLD IS AGRICULTURAL LAND AND THEY H AVE AGRICULTURAL INCOMES. HOWEVER, A.O. NEITHER ACCEPTE D THE 8 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. AGRICULTURAL INCOME NOR GAVE CREDIT TO THE SOURCE S HOWN FOR VARIOUS DEPOSITS IN THE BANK ACCOUNTS AND AS SEEN F ROM THE ORDERS QUOTED ABOVE, THE ISSUE IN OTHER GROUP HAS B EEN RESTORED TO CIT(A) AS A WHOLE FOR DECIDING THE APPE ALS DENOVO . MOREOVER, THE FINDING ON THE LAND SUBSEQUENTLY SOLD IN A.Y. 2003-04/2008-09 HAS A BEARING ON THE CLAIM OF AGRIC ULTURAL INCOME IN EARLIER YEARS AND ALSO SOURCE OF INCOME W HICH WAS BROUGHT TO TAX AS UNEXPLAINED CASH CREDITS. IT WAS ADMITTED THAT THE ADDITIONAL GROUNDS RAISED ARE NOT ADJUDICA TED BY THE LD. CIT(A). IN VIEW OF THIS, WE ARE OF THE OPINION THAT ALL THESE APPEALS ARE TO BE SET ASIDE TO THE FILE OF THE LD. CIT(A) AND LD. CIT(A) SHALL PASS DENOVO APPELLATE ORDERS ON ALL THE ISSUES BEFORE HIM, AFTER RECORDING HIS FINDINGS ON THE ADD ITIONAL GROUNDS OF APPEAL RAISED BEFORE HIM AND ALSO ANY AD DITIONAL EVIDENCE THAT MAY BE PLACED IN SUPPORT OF THE CONTE NTIONS. THEREFORE, THE ORDERS OF THE CIT(A) ARE SET ASIDE A ND ALL THESE APPEALS ARE RESTORED TO HIS FILE. THE RELEVANT GROU NDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEALS OF THE ASSESSEE AN D REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.05.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH MAY, 2014. VBP/- 9 ITA.NO.1676/H/2010, 22/HYD/2011, 31 TO 37/HYD/2011, 323/HYD/2011, 411/HYD/2011, 428 TO 434/HYD/2011, MR. K. MUTHYAM REDDY, MR. K. RATANGAPANI REDDY & MR. K. RANGA REDDY. COPY TO : 1. MR. K. RANGA REDDY, 2. MR. K. RATANGAPANI REDDY, 3. MR. K. MUTHYAM REDDY, C/O. DR. C.P. RAMASWAMI, ADVOCATE, FLAT NO.303 & 102, GITANJALI, PLOT NO.108, SRINAGAR COLONY, HYD ERABAD 073. 4. DCIT, CENTRAL CIRCLE-6, HYDERABAD. 5. CIT(A)-1, HYDERABAD. (4 COPIES) 6 . CIT (CENTRAL), HYDERABAD. 7. D.R. ITAT, A BENCH, HYDERABAD.