Dr. Lily Rodriques, Hyderabad V. ITO,Ward 3(2), Hyderabad

ITA 387/HYD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6263 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 19-10-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment
• Section: 143(3); 69

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 387/HYD/2014 ASSESSMENT YEAR: 2004-05 DR. LILY RODRIGUES, HYDERABAD PAN ACBPR4063P VS. THE INCOME TAX OFFICER WARD 3(2) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI K.J. RAO DATE OF HEARING : 03-01-2017 DATE OF PRO NOUNCEMENT : 11-01-2017 ORDER PER P. MADHAVI DEVI, J.M.: THIS IS THE ASSESSEES APPEAL FOR THE A.Y. 2004-05 , AGAINST THE ORDER OF THE CIT(A)-IV, HYDERABAD, DATE D 13-12- 2013. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITIONS OF RS. 9,48,850/- AND OF RS. 2,86,000/-. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A DOCTOR BY PROFESSION, FILED HER RETURN OF INCOME FOR THE A .Y. 2004- 05 ON 02-09-2004 DECLARING TOTAL INCOME OF RS. 2,93 ,861/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 148 OF THE ACT, THE A.O OBSERVED THAT AN AMOUNT OF RS. 46,44,600/- WAS INTRODUCED BY THE ASS ESSEE AS HER SHARE CAPITAL IN SURAKSHA DIABETIC CENTRE LT D, DURING THE F.Y. 2003-04 RELEVANT TO THE A.Y. 2004-0 5. THE ASSESSEE WAS THEREFORE ASKED TO EXPLAIN, WITH DOCUM ENTARY EVIDENCE, THE SOURCES FOR THE INVESTMENT MADE. THE 2 ITA NO. 387/HYD/2014 DR. LILY RODRIGUES, HYDERABAD. ASSESSEE WAS ALSO DIRECTED TO PROVIDE THE BOOKS OF ACCOUNT AND OTHER SUPPORTING DOCUMENTS IN RESPECT OF THE CL AIMS MADE IN THE RETURN OF INCOME. VIDE LETTER DATED 08- 11- 2010, THE ASSESSEE HAS SUBMITTED A LIST OF LOANS SA NCTIONED IN VARIOUS NAMES FOR AN AMOUNT OF RS. 2,84,26,000/- , AND ALSO ENCLOSED THE COPIES OF THE LOANS SANCTION DOCU MENTS FOR SOME OF THE LOANS. 2.1 THE A.O. ACCEPTED THE SOURCES FOR THE INVESTMEN T EXCEPT FOR A SUM OF RS. 41,44,600/- HOLDING IT TO B E UNEXPLAINED, AND TREATED IT AS INCOME U/S 69 OF TH E ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE, BUT CONFIRMED/RESTRICTED THE DISALLOWANCE TO RS, 9,48,8 50/-. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD FULLY EXPLAINED THE SOURCES FOR THE EN TIRE INVESTMENTS BUT THE A.O. AND CIT(A), HAVE ERRONEOUS LY NOT CONSIDERED THE SAME IN A PROPER PERSPECTIVE AND HA VE MADE THE DISALLOWANCE. HE SUBMITTED THAT THE ASSES SEE HAS SHOWN THE SOURCES AND AS LONG AS IT HAS NOT BEE N PROVED THAT THESE FUNDS HAVE BEEN UTILIZED FOR ANY OTHER PURPOSES, ACCORDING TO HIM, THE SAME HAS TO BE ACCE PTED AS THE SOURCE OF INVESTMENT MADE BY THE ASSESSEE IS PR OVED. IN SUPPORT OF HIS CONTENTIONS, HE PLACED RELIANCE U PON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF CIT VS SHRI K.V. SHRIDHARAN, (1993) 201/10109 (KERALA). 4. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ONU S IS ON 3 ITA NO. 387/HYD/2014 DR. LILY RODRIGUES, HYDERABAD. THE ASSESSEE TO PROVE THE SOURCES FOR INVESTMENT AN D IN THE ABSENCE OF THE SAME, THE A.O. AND CIT(A) HAVE RIGHT LY BROUGHT THE UNEXPLAINED INVESTMENT TO TAX. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS E XPLAINED THE SOURCES FOR THE INVESTMENT AS UNDER: I. LOAN FROM CORPORATION BANK OF RS. 14 LAKHS SA NCTIONED ON 10-06-2002. II. HOUSING LOAN OF RS. 15 LAKHS FROM STATE BANK O F HYDERABAD, SANCTIONED ON 20-01-2003. III. LOAN FROM KARUR VYSYA BANK OF RS. 5 LAKHS SANC TIONED ON 25.02.2004. IV. LOAN FROM CITY BANK OF RS. 6,80,000 SANCTIONED ON 31-03- 2001. V. OTHER LOANS AS FOLLOWS: A. 17-02-2004 RS. 1,50,000 B. 29-01-2004 RS. 3,00,000 C. 29-01-2001 RS. 20,00,000 D. 31-01-2001 RS. 6,80,000 VI. RS. 2,86,000 RECEIVED FROM SHRIRAM CHITS ON 19- 06-2001. WE FIND THAT THE CIT(A) HAS ACCEPTED THE SOURCES ON LY TO THE EXTENT OF RS. 20,00,000, BEING LOANS FROM STAT E BANK OF HYDERABAD AND KARUR VYSYA BANK AND AS REGARDS TH E OTHER LOANS, THE CIT(A) HAS GIVEN A FINDING THAT TH OSE LOANS HAVE BEEN UTILISED FOR OTHER PURPOSES. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THAT THE SOURCE OF THE INVESTMENTS OF RS. 9,48,850/-, ARE THE LOAN FROM CI TY BANK WHICH WAS SANCTIONED AND PAID ON 31-01-2001 AND ALS O THE CHIT FUND AMOUNT RECEIVED FROM SHRIRAM CHITS BUT WA S UTILISED DURING THE RELEVANT FINANCIAL YEAR. 5.1 HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE, HAS NOT BEEN ABLE TO SUBMIT ANY EVIDENCE BEFORE US TO SHOW THAT 4 ITA NO. 387/HYD/2014 DR. LILY RODRIGUES, HYDERABAD. THE INVESTMENTS WERE MADE FROM THESE AMOUNTS IN APR IL 2003 TO MAR 2004. AS POINTED OUT BY THE LD. DR, ONU S RESTS ON THE ASSESSEE TO PROVE THE SOURCES OF INVES TMENT. IN THE DECISION RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE THE HONBLE KERALA HIGH COURT WAS DEALING WITH THE CASE OF THE ASSESSEE WHO HAS EXPLAINED THE INTA NGIBLE ADDITIONS MADE IN THE EARLIER YEARS AS THE SOURCE F OR INVESTMENT AND IT WAS IN THESE CIRCUMSTANCES THAT T HE HONBLE HIGH COURT HELD THAT WHEN THE INCOME OF THE ASSESSEE WAS ENHANCED BY THE SETTLEMENT COMMISSION IN THE EARLIER A.Y., THEN THE SOURCE MUST BE DEEMED TO BE IN POSSESS OF THE ASSESSEE FOR INVESTMENTS AS AND WHEN NECESSARY AND IT NEED NOT BE IN ONE LUMPSUM. IN TH E CASE BEFORE US ALSO, THOUGH THE ASSESSEE HAS NOT ESTABLI SHED THE INVESTMENT IS OUT OF THESE FUNDS ONLY, IT IS ALSO N OT ESTABLISHED BY THE REVENUE THAT THESE FUNDS WERE UT ILISED BY THE ASSESSEE FOR ANY OTHER PURPOSE AND THUS WAS NOT AVAILABLE WITH THE ASSESSEE FOR INVESTMENT IN THE CONSTRUCTION OF THE BUILDING. THEREFORE, RESPECTFUL LY FOLLOWING THE ABOVE JUDGMENT, WE SET ASIDE THE ORD ER OF THE CIT(A) AND DIRECT THAT THE ASSESSEES EXPLANATION B E ACCEPTED. ACCORDINGLY THE ASSESSEES APPEAL IS ALL OWED 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY , 2017. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 11 TH JANUARY, 2017 KRK 5 ITA NO. 387/HYD/2014 DR. LILY RODRIGUES, HYDERABAD. 1) DR LILY RODRIGUES, FLAT NO. 102, SHRIYA ELEGANCE, 3-6- 643, STREET NO. 9, HIMAYAT NAGAR HYDERABAD 29. 2) ITO, WARD -3(2), HYDERABAD 3) CIT -IV, HYDERABAD 4) ACIT-3, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE 6 ITA NO. 387/HYD/2014 DR. LILY RODRIGUES, HYDERABAD.