Ch Bharathi Devi, Rajam V. CIT, Visakhapatnam

ITA 35/VIZ/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6896 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 29-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Gift; Opportunity of being heard
• Section: 69C; 143(3); 263

Judgement Text

ITA NOS 34 AND 35 2009 CV JAGANNADHA SWAMY & CH BHA RATHI DEVI, RAJAM PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.34/VIZAG/2009 ASSESSMENT YEAR: 2004 - 05 C.V. JAGANNADHA SWAMY, RAJAM VS. COMMISSIONER OF INCOME TAX- 2, VISAKHAPATNAM (APPELLANT) PAN NO: ADIPC 2609 N (RESPONDENT) ITA NO.35/VIZAG/2009 ASSESSMENT YEAR: 2004-05 CH. BHARATHI DEVI, RAJAM VS. COMMISSIONER OF INCOME TAX- 2, VISAKHAPATNAM (APPELLANT) PAN NO: ADIPC 2608 P (RESPONDENT) APPELLANT BY: WRITTEN SUBMISSIONS BY SHRI C.V.S. MURTHY, CA RESPONDENT BY: SHRI T.LUCAS PETER, CIT (DR) ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEES HAVE FILED THESE APPEALS ASSAILING TH E REVISION ORDER PASSED BY PASSED BY LEARNED CIT-II, VISAKHAPATNAM IN THEIR RESPECTIVE HANDS SETTING THE ASSESSMENT FOR THE ASSESSMENT YEA R 2004-05. SINCE THE ISSUES URGED IN THESE APPEALS ARE INTER CONNECTED, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. BOTH THE ASSESSEES HAVE JOINTLY PURCHASED TWO VACANT SITES D URING THE YEAR UNDER CONSIDERATION AND THEY DECLARED 50% OF COST OF PROP ERTIES EACH IN THEIR RESPECTIVE RETURNS OF INCOME. THE LEARNED CIT NOTI CED THAT THE TOTAL COST OF PROPERTIES TOGETHER WITH THE STAMP DUTY AND REGISTR ATION CHARGES AS PER THE CONVEYANCE DEEDS WORKED OUT TO RS.11,93,715/- AND 5 0% OF THE SAME WORKED TO RS.5,96,855/-. HOWEVER, IN THE BALANCE SH EET DRAWN ON 31.3.2004, THESE ASSESSEES HAD SHOWN THE COST OF PR OPERTIES ONLY AT RS.5,15,605/-, WHICH RESULTED IN A SHORTAGE OF RS.8 1,253/- IN THE HANDS OF ITA NOS 34 AND 35 2009 CV JAGANNADHA SWAMY & CH BHA RATHI DEVI, RAJAM PAGE 2 OF 3 EACH OF THE ASSESSEE. BESIDES THE ABOVE, THE ASSESS EE SHRI C.V. JAGANNADHA SWAMY HAD GIFTED A PROPERTY TO HIS SONS ON 21.10.2003 AND A SUM OF RS.45,980/- WAS INCURRED IN CONNECTION WITH THE SAID TRANSFER TOWARDS STAMP DUTY AND REGISTRATION CHARGES. SIMIL ARLY, THE ASSESSEE SMT. CH. BHARATHI DEVI HAD ALSO GIFTED A PROPERTY ON THE SAME DATE TO HER SONS AND A SUM OF RS.2835/- WAS INCURRED TOWARDS STAMP D UTY AND REGISTRATION EXPENSES ON THE SAID TRANSFER. THE LEARNED CIT NOT ICED THAT BOTH THE ASSESSEES DID NOT DISCLOSE THE EXPENDITURES CITED A BOVE IN THEIR RESPECTIVE RETURNS OF INCOME. ACCORDINGLY THE LEARNED CIT TOO K THE VIEW THAT THESE EXPENDITURES SHOULD BE ASSESSED IN THE HANDS OF THE SE ASSESSEES AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE AC T. ACCORDINGLY THE LEARNED CIT SET ASIDE THE ASSESSMENT ORDER WITH A D IRECTION TO REDO THE ASSESSMENT AFTER GIVING AN OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. 4. THE LEARNED COUNSEL FOR THE ASSESSEES HAS FILED WRITTEN SUBMISSIONS, WHEREIN HE HAS CONTENDED THAT THE LEARNED CIT HAS I NVOKED THE REVISION PROCEEDINGS ONLY ON SURMISES. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THESE ASSESSEES HAVE OMITTED TO ACCOUNT THE EXPENDITURE INCURRED TOWARDS STAMP DUTY AND REGISTR ATION CHARGES IN RESPECT OF PROPERTIES ACQUIRED/GIFTED BY THEM. HENC E THE LEARNED CIT IS RIGHT IN LAW IN DIRECTING THE ASSESSING OFFICER TO REDO THE ASSESSMENT. 5. WE HAVE HEARD THE CONTENTIONS OF THE LEARNED DEP ARTMENTAL REPRESENTATIVE AND GONE THROUGH THE WRITTEN SUBMISS IONS FILED BY THE ASSESSEE AND ALSO THE RECORD. FROM THE ASSESSMENT ORDERS PASSED UNDER SECTION 143(3) OF THE ACT IN THE HANDS OF BOTH THE ASSESSEES, WE FIND NO DISCUSSION WITH REGARD TO THE IMPUGNED ISSUE. THE A SSESSEE ALSO DID NOT FURNISH ANY DOCUMENT TO SUGGEST THAT THE IMPUGNED I SSUE WAS EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS. FROM THE FACTS DISCUSSED BY THE LEARNED CIT, IT APPEARS THAT THE ASSESSEE HAS OMITTED TO ACCOUNT FOR THE EXPENSES INCURRED TOWARD S STAMP DUTY AND REGISTRATION CHARGES. THOUGH THE LEARNED AUTHORISED REPRESENTATIVE HAS STATED IN HIS WRITTEN SUBMISSIONS THAT THE SAID EXP ENSES WERE INCURRED BY THE SELLERS, YET THE SAID FACTS REQUIRE VERIFICATIO N ON THE PART OF THE ITA NOS 34 AND 35 2009 CV JAGANNADHA SWAMY & CH BHA RATHI DEVI, RAJAM PAGE 3 OF 3 ASSESSING OFFICER. HENCE WE DO NOT FIND ANY INFIRM ITY IN THE ACTION OF LEARNED CIT IN INVOKING THE PROVISIONS OF SEC. 263 OF THE ACT. HOWEVER, WE NOTICE THAT THE LEARNED CIT HAS SET ASIDE THE ASSES SMENT ORDERS IN TOTO WITH A DIRECTION TO REDO THE ASSESSMENTS. THE LEARNED C IT, DID NOT RECORD ANY FINDING TO SHOW THAT THE ORDERS OF THE ASSESSING OF FICER ARE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE IN RESP ECT OF THE MATTERS THAT HAS ALREADY BEEN CONCLUDED. IN THAT CASE, IN OUR VIEW, IT MAY NOT BE PROPER TO SET ASIDE THE WHOLE ASSESSMENT WHEN THE ASSESSING O FFICER IS REQUIRED TO EXAMINE ONLY CERTAIN ISSUES. ACCORDINGLY WE MODIFY THE ORDERS OF LEARNED CIT AND DIRECT THE ASSESSING OFFICER TO EXAMINE THE ISSUES DISCUSSED IN THE PRECEDING PARAGRAPHS AND DECIDE THEM IN ACCORDANCE WITH LAW AFTER AFFORDING THE NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE P ARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 27 TH JUNE, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:27-06-2011 COPY TO 1 MR. C.V. JAGANNADHA SWAMY, OPP: LIC BUILDING, SRI KAKULAM ROAD, RAJAM 2 MRS. CH. BHARATHI DEVI, C/O C.V. JAGANNADHA SWAMY , OPP: LIC BUILDING, SRIKAKULAM ROAD, RAJAM 3 THE ADD. CIT, RANGE-4, VISAKHAPATNAM 4 THE ITO WARD-1, SRIKAKULAM 5 THE CIT II, VISAKHAPATNAM 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM