A.Narayanamma, Hyderabad V. Income Tax Officer, Ward-1, Kurnool

ITA 379/HYD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6088 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: D SATYANARAYANA
• Keywords: Unexplained investment
• Section: 234B; 69; 144

Judgement Text

1 ITA.NO.379/HYD/2014 SMT. A. NARAYANAMMA, KURNOOL. IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC) BENCH : HYDERABA BEFORE : SHRI D. MANMOHAN, VICE PRESIDENT ITA.NO.379/HYD/2014 ASSESSMENT YEAR 2009-2010 SMT. A. NARAYANAMMA KURNOOL. PAN AIFPA2118L VS. THE INCOME TAX OFFICER, WARD-1 KURNOOL. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI D. SATYANARAYANA FOR REVENUE : SMT. U. MINICHANDRAN DATE OF HEARING : 09.01.2017 DATE OF PRONOUNCEMENT : 15.03.2017 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER PASSED BY CIT(A)-IV, HYDERABAD AND IT PERTAINS TO THE A.Y. 20 09-2010. FOLLOWING GROUNDS WERE URGED BEFORE THE TRIBUNAL. 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS TO THE EX TENT IT IS PREJUDICIAL TO THE APPELLANT HEREIN. 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF TH E A.O. IN COMPLETING THE ASSESSMENT EX-PARTE U/S.144 OF THE I .T. ACT. 3. THE LD. CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS.15 LAKHS WITHDRAWN FROM THE PARTNERSHIP FIRM DOES NOT FORM P ART OF THE INVESTMENT IN THE LAND. 4. THE LD. CIT(A) ERRED IN CONFIRMING THE ASSESSMENT O F RS.6,55,000/- AS THE INCOME FROM OTHER SOURCES WHEN THE SAID AMOUNT REPRESENTS INCOME FROM AGRICULTURE. 5. THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF TH E A.O. IN CHARGING INTEREST U/S.234A AND U/S. 234B OF THE I.T . ACT. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF H EARING. 2 ITA.NO.379/HYD/2014 SMT. A. NARAYANAMMA, KURNOOL. 2. FACTS NECESSARY FOR THE DISPOSAL OF THE APPEAL ARE STATED IN BRIEF. THE ASSESSEE, IN HER INDIVIDUAL CAPACITY, DE CLARED TAXABLE INCOME OF RS.1,81,757 + AGRICULTURAL INCOME OF RS.6,55,000 . SINCE THERE WERE TRANSACTIONS OF IMMOVABLE PROPERTIES VALUING RS.99,25 ,000, AS PER VALUATION OF SUB-REGISTRARS OFFICE, THE CASE OF THE A SSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS AND ACCORDINGLY, SEVERAL N OTICES WERE ISSUED TO THE ASSESSEE TO FURNISH DETAILS WITH REGARD TO THE PUR CHASE COST OF THE LAND, SOURCE FOR PURCHASE OF THE LAND AS WELL AS PRO OF OF EARNING AGRICULTURAL INCOME. SINCE NO MATERIAL WHATSOEVER CO ULD BE FILED BY THE ASSESSEE, BEST JUDGMENT ASSESSMENT WAS MADE WHEREIN A .O. MADE AN ADDITION OF RS.23,43,025 UNDER SECTION 69 OF THE ACT AN D ANOTHER SUM OF RS.6,55,000 BY TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. IN THIS REGARD, THE A.O. OBSERVED AS UNDER : HOWEVER, THERE IS NO RESPONSE TO THE NOTICE ISSUED. SINCE THE ASSESSEE COULD NOT AVAIL THE OPPORTUNITIES AFFORDED FROM TIME TO TIME IN FURNISHING THE INFORMATION CALLED FOR, THER E IS NO OTHER ALTERNATIVE EXCEPT TO COMPLETE THE ASSESSMENT EX-PA RTE U/S.144 OF THE I.T. ACT. SINCE THE BALANCE SHEET FILED ALONG W ITH THE RETURN DOES NOT CONTAIN THE PROPERTY OF HOUSE SITES AND TH E ASSESSEE DID NOT INDICATE THE VALUE OF INVESTMENT MADE IN THE PU RCHASE OF HOUSING PLOTS AT TIRUPATI, THE AMOUNT INVESTED OF R S.20 LACS ALONG WITH STAMP DUTY PAID THEREON AMOUNTING TO RS.3,43,0 25/- IS TREATED AS UNEXPLAINED INVESTMENT U/S.69 OF THE I.T . ACT. THE SAME IS ADDED TO THE INCOME ADMITTED. (ADDITION RS.23 ,43,025) THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE WHATSOE VER RELATING TO THE EARNING OF AGRICULTURAL INCOME AND AS SUCH, THE INCOME ADMITTED IN THE FORM OF AGRICULTURAL INCOME IS TREA TED AS 'INCOME FROM OTHER SOURCES'. COPY OF THE BALANCE SHEET FILED BY THE ASSESSEE AS ON 31.3.2009 IS ANNEXED TO THIS ORDER AS ANNEXURE' A' IN SUPPORT TH AT THE ASSESSEE HAS NOT ADMITTED THE INVESTMENT FOR PURCHA SE OF HOUSING PLOTS AT TIRUPATI. 3 ITA.NO.379/HYD/2014 SMT. A. NARAYANAMMA, KURNOOL. 3. AGGRIEVED, IT WAS CONTENDED BEFORE THE CIT(A) THAT TH E A.O. ERRED IN MAKING THE BEST JUDGMENT ASSESSMENT UNDER SECTI ON 144 OF THE ACT AND FURTHER CONTENDED THAT NO CASE WAS MADE OUT FOR M AKING THE IMPUGNED ADDITIONS UNDER SECTION 69/68 OF THE ACT. 4. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAS NOT C OMPLIED WITH THE NOTICES ISSUED FROM TIME TO TIME THOUGH NUMBER O F OPPORTUNITIES WERE GIVEN AND HENCE, THE A.O. WAS JUST IFIED IN INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. AS REGARDS I NVESTMENT IN HOUSE SITES, THE ASSESSEE CONTENDED THAT A SUM OF RS.15 LAKHS HAD BEEN DRAWN FROM THE PARTNERSHIP FIRM M/S. SRI VARI ENTERPRISES WH ICH WAS ASSESSED TO INCOME TAX BY THE SAME ASSESSMENT OFFICER. AS REGARD S THE BALANCE OF THE INVESTMENT, IT WAS CONTENDED THAT IT WAS FROM OUT OF AGRICULTURAL INCOME AS WELL AS SAVINGS OF THE EARLIER YEARS. 5. THE LD. CIT(A) OBSERVED THAT THOUGH THE CAPITAL ACCO UNT OF THE FIRM SHOWS WITHDRAWAL OF RS.15 LAKHS, ORDINARILY ITS UTILISATION ALSO FORMS PART OF THE CAPITAL ACCOUNT AND IN THE INSTANT CASE , INVESTMENT IN LAND DOES NOT FORM PART OF CAPITAL ACCOUNT AND THEREFOR E, IT FOLLOWS THAT ITS SOURCES WERE DRAWN FROM OUTSIDE CAPITAL ACCOUNT A ND BALANCE SHEET. I ACCORDINGLY REFUSE TO GIVE CREDENCE TO THE AVAILABIL ITY OF RS.15 LAKHS FOR MAKING INVESTMENT IN PURCHASE OF PLOTS. AS REGARDS THE ALTERNATE CONTENTION OF THE ASSESSEE, THAT AGRICULTURAL INCOME EAR NED BY THE ASSESSEE WAS ASSESSED BY THE A.O. AS INCOME FROM OTHE R SOURCES WHICH IN FACT WAS AVAILABLE TO THE ASSESSEE FOR INVESTMENT, THE LD. CIT(A) ACCEPTED THE CONTENTION AND GAVE PARTIAL RELIEF TO THE E XTENT OF RS.6,55,000. 6. THE NEXT ISSUE WAS WITH REGARD TO THE REJECTION OF TH E CLAIM OF RECEIPT OF AGRICULTURAL INCOME AND TREATING THE SAME AS INCOME FROM OTHER SOURCES. ACCORDING TO THE A.O. THERE WAS NO EVID ENCE IN SUPPORT 4 ITA.NO.379/HYD/2014 SMT. A. NARAYANAMMA, KURNOOL. OF THE CLAIM WHEREAS THE ASSESSEE CONTENDS THAT SHE OWNS 14.09 ACRES OF LAND IN CUDDAAH DISTRICT. HOWEVER, NO EVIDENCE WAS FURNISHED IN SUPPORT OF THE CLAIM AND IT IS NOT KNOWN AS TO WHY THE INFORMATION OR EVIDENCE IF ANY, WAS NOT FILED BEFORE THE A.O. THE LD . CIT(A) FURTHER OBSERVED THAT EVEN IF THE ASSESSEES CLAIM OF OWNERSHI P OF LAND WERE TO BE ACCEPTED, IT DOES NOT ESTABLISH THE QUANTUM OF AGRICU LTURAL INCOME. JUST HOLDING OF LAND IS NOT ENOUGH TO CLAIM THAT THE ASSE SSEE HAS ACTUALLY EARNED THE AGRICULTURAL INCOME. RELIANCE WAS PLACED UPON THE DECISION OF ITAT IN THE CASE OF PARAS COLLINS DISTIL LERIES WHEREIN THE BENCH OBSERVED THAT THE PRIMARY ONUS IS UPON THE ASSESS EE TO PLACE BEFORE THE A.O. PROPER MATERIAL TO PROVE THAT AGRICULTU RAL INCOME WAS EARNED AND IT CANNOT BE BASED ON MERE INCOME CERTIFICA TE OF THE VILLAGE OFFICER. LD. CIT(A) FURTHER ADDED THAT IN THE INSTANT CAS E THE ASSESSEE HAS NOT EVEN FURNISHED THE LAND DOCUMENTS AND HENCE CL AIM CANNOT BE ENTERTAINED EVEN ON THIS COUNT. HE THUS CONFIRMED THE AC TION OF THE A.O. FURTHER AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE T RIBUNAL. 7. IN THE GROUNDS OF APPEAL, THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. UNDER SECTION 144 OF THE ACT AND ALSO CONTE STED THE CONFIRMATION OF ADDITION OF RS.15 LAKHS AS WELL AS RS .6,55,000 AND ALSO THE METHOD OF CHARGING INTEREST UNDER SECTIONS 234A AND 234B OF THE I.T. ACT. 8. THE CASE WAS ADJOURNED FROM TIME TO TIME FROM 20.0 1.2014 ONWARDS. SINCE SEVERAL ADJOURNMENTS WERE GRANTED, T HE PLEA OF THE ASSESSEE FOR SEEKING FURTHER ADJOURNMENT WAS NOT ACCEP TED AND THE CASE WAS HEARD ON 09.01.2017. LEARNED COUNSEL, APPE ARING ON BEHALF OF THE ASSESSEE, DID NOT REFER TO ANY PAGES IN THE PAPE R BOOK BUT MERELY CONTENDED THAT THE A.O ERRED IN MAKING BEST JUDGMENT ASSE SSMENT AND THERE IS SUFFICIENT PROOF TO SHOW THAT THE ASSESSEE EAR NED AGRICULTURAL 5 ITA.NO.379/HYD/2014 SMT. A. NARAYANAMMA, KURNOOL. INCOME. IT WAS CONTENDED THAT THERE IS EVIDENCE TO PROVE THE SOURCE OF INVESTMENT IN PURCHASE OF PLOTS. 9. ON THE OTHER HAND, LD. D.R. STRONGLY RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. 10. I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ACCORDING TO THE ASSESSEE, HOUSE SITES WERE ACQUIRED FOR CONSIDERATION OF RS.20 LAKHS WHEREIN THE MARKET VALUE WAS RS.99,25,000 AS PER THE RECORDS OF SUB-REGISTRARS OF FICE. HOWEVER, THE A.O. HAS CALLED UPON THE ASSESSEE TO PROVE THE SOURCE OF INVESTMENT OF RS.20 LAKHS ONLY, WHICH WAS CLAIMED TO HAVE BEEN PAI D, PLUS REGISTRATION CHARGES OF RS.3,43,025. THUS THE TOTAL EXPE NDITURE UNDER CONSIDERATION WAS RS.23,43,025. THE INVESTMENT WAS CLA IMED TO BE FROM WITHDRAWALS AND AGRICULTURAL INCOME. AS PER THE I NFORMATION FURNISHED BEFORE THE A.O. AN AMOUNT OF RS.15 LAKHS W AS DRAWN FROM THE PARTNERSHIP FIRM, BESIDES AGRICULTURAL INCOME OF R S.6,55,000. THE LD. CIT(A) HAS GIVEN DETAILED REASONS WHILE COMING T O THE CONCLUSION THAT THIS AMOUNT OF RS.15 LAKHS WITHDRAWN FROM THE PARTNE RSHIP FIRM CANNOT BE LINKED TO THE INVESTMENTS MADE IN PURCHASE OF HOUSE SITES AND ACCORDINGLY REJECTED THE CONTENTION OF THE ASSESSEE . THE AVAILABILITY OF RS.6,55,000 HAVING BEEN ACCEPTED NO FURTHER ADDIT ION WAS MADE EXCEPT CONFIRMING THE ADDITION OF RS.15 LAKHS UNDER SE CTION 69 OF THE ACT. I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD . CIT(A) ON THIS ISSUE. 11. SIMILARLY, WITH REGARD TO SOURCE OF AGRICULTURAL INCOME, IT IS NOT IN DISPUTE THAT THE LAND IS NOT IN THE NAME OF THE ASS ESSEE AND THERE IS NO PROOF THAT ASSESSEE EARNED AGRICULTURAL INCOME. MERELY BECAUSE THE ASSESSEES HUSBAND OWNS SOME LAND, IT CANNOT BE AS SUMED THAT THE LAND WAS CULTIVATED BY HIS WIFE AND SHE EARNED AGRIC ULTURAL INCOME. AS 6 ITA.NO.379/HYD/2014 SMT. A. NARAYANAMMA, KURNOOL. RIGHTLY POINTED OUT BY THE LD. CIT(A) BENEFIT OF AGRICU LTURAL INCOME CANNOT BE GIVEN MERELY BASED ON TAHSILDARS CERTIFICA TE, UNLESS SPECIFIC EVIDENCE IS PLACED BEFORE THE TAX AUTHORITIES. IN THE IN STANT CASE, NO SUCH EVIDENCE COULD BE PLACED. I, THEREFORE, DID NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). SO FAR AS GROUND NO. 5 IS CONCERNED, IT IS CONSEQUENTIAL IN NATURE. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.03.2017. SD/- (D. MANMOHAN) VICE PRESIDENT HYDERABAD, DATED 15 TH MARCH, 2017. VBP/- COPY TO 1. SMT. A. NARAYANAMMA, KURNOOL. C/O. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, H.NO.3-6-64 3, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. THE INCOME TAX OFFICER, WARD-1, KURNOOL. 3. CIT(A)-IV, HYDERABAD. 4. CIT-III, HYDERABAD 5. D.R. ITAT B (SMC) BENCH, HYDERABAD. 6. GUARD FILE.