S.K. Sreenivasa, Mysore V. DCIT, Mysore

ITA 392/BANG/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8682 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN
• Assessee Lawyers: H GURUSWAMY ITP
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER A ND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER ITA NO. 392 /BANG/201 4 (ASSESSMENT YEAR: 20 09 - 10 ) SHRI S.K.SREENIVASA , NO.479 , 6 TH CROSS, 6 TH MAIN, V IJAYANAGAR 1 ST STAGE, MYSORE. PAN: AHQPS 3208P APPELLANT VS. DEPUTY COMMISSIONER OF INCOME - TAX, , CENTRAL CIRCLE, MYSORE. RESPONDENT APPELLANT BY: SHRI H.GURUSWAMY, ITP. RESPONDENT BY: SHRI MUZAFFAR HUSSAIN, CIT (DR) DATE OF HEARING : 08 /12/2015 DATE OF PRONOUNCEMENT: 20 / 01 /2016 O R D E R PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF DATED 30/12/2013 OF THE CIT(A) FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE HAS RAI SED THE FOLLOWING GROUNDS: ITA NO . 392/BANG/2014 SHRI S.K.SREENIVASA PAGE 2 OF 6 1) THE IMPUGNED APPELLATE ORDER DATED 30 - 12 - 2013 PASSED BY THE LD. CIT(A) - VI, BANGALORE IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2) THE LD. CIT(A) - VI, BANGALORE HAS ERRED IN HOLDING THAT THE APPELLANT WAS UNABLE TO RE CONCILE THE DIFFERENCE IN CAPITAL WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCE OF THE CASE. 3) THE LD. CIT(A) - VI. BANGALORE HAS ERRED IN NOT APPRECIATING THE STATEMENT OF AFFAIRS FILED BY THE APPELLANT AS ON 31 - 03 - 2007, 31 - 03 - 2008 AND 31 - 03 - 2009 WITH A D ETAILED CREDITS AND DEBITS FOR THE RELEVANT YEARS ACCORDINGLY TO WHICH THE OPENING CAPITAL AS ON 01 - 04 - 2008 WAS OF RS. 78,06,084/ - AS AGAINST RS. 54,30,084/ - ADOPTED BY THE AO. 4) THE LD. CIT(A) - VI, BANGALORE HAS ERRED IN NOT APPRECIATED THE FACT THAT THE AL LEGED DIFFERENCE OF CAPITAL WAS NOT RELATED TO THE ASST YEAR 2009 - 10 AS BEEN ADMITTED BY THE AO IN THE REMAND REPORT DATED 22 - 10 - 2013 WITH WORKING SHEETS PERTAINING TO THE FINANCIAL YEAR 2005 - 06 TO 2008 - 09 DEPICTING THE OPENING AND CLOSING BALANCE OF CAPIT AL FOR THE RELEVANT YEARS. 5) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND DELETE ANY OF THE GROUNDS AT THE TIME OF HEARING. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE APPELLANT RESPECTFULLY PRAYS THAT YOUR HON'BLE AUTH ORITY BE PLEASED TO PASS AN ORDER DELETING THE ADDITIONS OF RS. 23,76.000/ - MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) - VI, BANGALORE AND FURTHER BE PLEASED TO PASS SUCH OTHER ORDERS GRANTING SUCH OTHER RELIEF THAT YOUR HONBLE AUTHORITY MAY DEEM FIT IN THE INTEREST OF EQUITY AND JUSTICE. 3. THE ASSESSEE IS AN INDIVIDUAL AND HE IS ENGAGED IN THE BUSINESS OF REAL ESTATE. WHILE COMPLETING ASSESSMENT VIDE ORDER ITA NO . 392/BANG/2014 SHRI S.K.SREENIVASA PAGE 3 OF 6 DATED 28/12/2011, AO HAS MADE ADDITION OF RS.23,76,000/ - ON ACCOUNT OF DIFFERENCE OF O PENING CAPITAL AS ON 1/4/2009 IN COMPARISON TO CLOSING CAPITAL AS ON 31/3/2009. THE AO FOUND THAT THE CLOSING CAPITAL AS PER STATEMENT OF AFFAIRS AS ON 31/3/2009 WAS RS.54,30,084/ - WHEREAS OPENING CAPITAL AS ON 1/4/2009 WAS SHOWN AT RS.78,06,084/ - . THERE FORE, THE AO FOUND THAT THERE WAS A DIFFERENCE BETWEEN CLOSING AND OPENING CAPITAL AMOUNTING TO RS.23,76,000/ - AND THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION OF THE SAID DIFFERENCE. ACCORDINGLY, THE AO MADE ADDITION OF THE SAID AMOUNT BEING DIFFERENCE IN THE OPENING BALANCE AS ON 1/4/2009 AND CLOSING BALANCE AS ON 31/3/2009. 4. ON APPEAL , THE ASSESSEE SUBMITTED STATEMENT OF AFFAIRS AS ON 31/3/2007, 31/3/2008 AND 31/3/2009 AND CONTENDED THAT THERE IS NO DIFFERENCE OF CAPITAL. THE CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE AO. 5. BEFORE US, LEARNED AR OF THE ASSESSEE SUBMITTED THAT THERE WERE REMAND ORDERS AND REMAND REPORTS IN THE CASE OF THE ASSESSEE BUT THE CIT(A) HAS NOT CONSIDERED THE RE MAND REPORT OF THE AO WHILE PASSING THE IMPUGNED ORDER. HE HAS REFERRED TO REMAND REPORT AT PAGES 19 TO 23 OF THE PAPER BOOK AND SUBMITTED THAT THE REVISED ACCOUNTS AND STATEMENT OF AFFAIRS WERE FILED BY THE ASSESSEE BEFORE THE CIT(A) WHICH WERE SENT FOR V ERIFICATION TO THE AO IN THE REMAND ORDER. THE IMPUGNED ORDER WAS PASSED BY ITA NO . 392/BANG/2014 SHRI S.K.SREENIVASA PAGE 4 OF 6 THE CIT(A) WITHOUT CONSIDERING THE REMAND REPORT OF THE AO. THEREFORE, THE SAME IS ERRONEOUS AND DESERVES TO BE SET ASIDE. 6. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESE NTATIVE HAS SUBMITTED THAT THE ASSESSEE HAS MAINTAINED TWO SETS OF ACCOUNTS AND STATEMENT OF AFFAIRS SHOWING DIFFERENT FIGURES IN CAPITAL ACCOUNT OF THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 09. THE ASSESSEE HAS FAILED TO EXPLAIN OR RECONCILE THE DIFFERENCE I N DIFFERENT SET OF STATEMENT OF AFFAIRS AND THEREFORE, THE AUTHORITIES BELOW ARE JUSTIFIED IN MAKING THE ADDITION. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT AS PER STATEMENT OF AFFAIRS PRODUCED BEFORE THE AO, THE OPENING BALANCE ON 1/4/2009 WAS SHOWN AT RS.78,06,094/ - IN COMPARISON TO CLOSING BALANCE AS ON 31/3/2009 AT RS.54,30,084/ - . THE AO MADE ADDITION OF THE DIFFERENTIAL AMOUNT OF RS.23,76,000/ - FOR WANT OF EXPLANATION. IT TRANSPIRES FROM THE ASSESSMENT ORDER THAT THE DESPITE REPEATED NOTICES U/S 142(1) AND SUMMONS U/S 131, THERE WAS NO RESPONSE BY THE ASSESSEE EXCEPT FINALLY APPEARING ON 12/12/2011. THE AO IS NO DOUBT D UTY BOUND TO ASSESS THE CORRECT INCOME AND AT THE SAME TIME ASSESSEE IS ALSO UNDER THE OBLIGATION TO DISCLOSE TRUE AND CORRECT FACTS NECESSARY FOR THE ASSESSMENT. IN THIS CASE, ASSESSEE DID NOT FURNISH CORRECT FACTS EXPLAINING THE DIFFERENCE IN OPENING BA LANCE IN THE CAPITAL ACCOUNT ITA NO . 392/BANG/2014 SHRI S.K.SREENIVASA PAGE 5 OF 6 ON 1/4/2009 AND CLOSING BALANCE AS ON 31/3/2009. ONLY BEFORE THE CIT(A), ASSESSEE CLAIMS TO HAVE PRODUCED THE CORRECT AND TRUE FACT REGARDING BALANCE IN THE CAPITAL ACCOUNT. IT IS ADMITTED BY THE ASSESSEE THAT THERE WAS A DIS CREPANCY AND MISTAKE IN THE BALANCE IN THE CAPITAL ACCOUNT SHOWN AS ON 1/4/2009 AND 31/3/2009 BUT THE ASSESSEE CLAIMS THAT THE SAID MISTAKE HAS OCCURRED IN THE ASSESSMENT YEAR 2007 - 08 AND NOT IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE CANNOT BE ALLOWED TO WITHHOLD THE CORRECT FACT AND THEN TAKE THE ADVANTAGE OF LAPSE OF TIME TO AVOID THE INCOME CHARGEABLE TO TAX FROM ASSESSMENT TO TAX. THE CLAIM OF THE ASSESSEE THAT MISTAKE IN THE BALANCE OF CAPITAL ACCOUNT OCCURRED IN THE ASSESSMENT YEAR 2007 - 08 IS TH EREFORE, REQUIRES TO BE EXAMINED IN THE CONTEXT THAT IF SUCH INCOME CHARGEABLE TO TAX IN EARLIER ASSESSMENT YEAR CAN STILL BE ASSESSED TO TAX, AS PER PROVISION S OF THE ACT AND PARTICULARLY ON THE POINT OF LIMITATION. LEARNED AR HAS POINTED OUT THAT THE AO HAS ALREADY REOPENED THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007 - 08. HOWEVER, VALIDITY OF REOPENING IS A QUESTION TO BE CONSIDERED IN THE PROCEEDINGS OF THE ASSESSMENT YEAR 2007 - 08 AND THEREFORE, AT THIS STAGE, NO VIEW CAN BE EXPRESSED ON THIS ASPECT OF THE MATTER. SINCE THE ASSESSEE CLAIMED TO HAVE DISCLOSED THE CORRECT FACT BEFORE THE CIT(A) AND THE ISSUE WAS ALSO CONSIDERED IN THE REMAND PROCEEDINGS, THEREFORE, THE MATTER REQUIRES RECONSIDERATION AS THE CIT(A) HAS NOT CONSIDERED THE REMAND REPORT WHIL E PASSING THE IMPUGNED ORDER. ACCORDINGLY, IN THE ITA NO . 392/BANG/2014 SHRI S.K.SREENIVASA PAGE 6 OF 6 FACTS AND CIRCUMSTANCES OF THE CASE, THE MATTER IS REMITTED TO THE RECORD OF THE CIT(A) FOR RE - CONSIDERATION OF THE SAME IN TH E LIGHT OF THE REMAND REPORT AS WELL AS THE OBSERVATIONS MADE ABOVE. 8. I N THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRON OUNCED IN THE OPEN COURT ON 20 TH JANUARY , 201 6 . S D/ - S D/ - ( INTURI RAMA RAO ) ( VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER E KSRINIVASULU ,SPS COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE