Mohd. Hidayathullah Owais, Sec-bad, Hyderabad V. DCIT, Central Circle-2, Hyderabad

ITA 40/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61911 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 11-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M S RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; Unexplained investment; Source of fund; Corroborative evidences
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 40/HYD/2012 ASSESSMENT YEAR: 2006-07 MOHD. HIDDAYATHULLAH OWAIS, APPELLANT SECUNDERABAD (PAN AAAPO 1199 E)) VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDENT CENTRAL CIRCLE 2, HYDERABAD. APPELLANT BY : MR. A.V. RAGHURAM RESPONDENT BY : MR. M.S. RAO DATE OF HEARING : 02/05/2012 DATE OF PRONOUNCEMENT : 06/06/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-I, HYDERABAD, DATED 21/11/2011 FOR THE ASSESSMENT YEAR 2006-07, WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH ON FAC TS AND IN LAW IN SO FAR AS IT IS PREJUDICIAL TO THE ASSESSEE. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS. 2,05,273/- MADE BY THE AO U/S 68 AS UNEXPLAINED CASH CREDIT. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE AO HAS MADE THE ADDITION WITHOUT ANY BASIS ON THE GROUND THAT N O EVIDENCE IS FILED TO PROVE THE SOURCES IGNORING THE CASH FLOW STATEMENT THAT IS FILED BEFORE HIM AND THAT ONCE THE AO HAS NOT POINTED OUT ANY MISTAK E IN THE CASH FLOW STATEMENT THEN THERE IS NO REQUIREMENT FOR ADDUCING EVIDENCE FOR SOURCES ITA NO. 40/HYD/2012 MOHD. HIDAYATHULLAH OWAIS 2 PARTICULARLY WHEN THE CAPITAL INTRODUCED IS FROM OU T OF AVAILABLE FUNDS AND THEREBY ERRED IN CONFIRMING THE ADDITION OF RS. 2,0 5,273/-. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS. 1,25,000/- MADE BY THE AO U/S 69 AS UNEXPLAINED INVESTMENT IN PROPERTY WITHOUT APPRECIATING THE FACT THAT THE AUTHORITIES HAS NOT FOUND ANY INFORMATION TO CORROBORATE THE ALLEGED INVESTMENT IN ANY PROPERTY WITH ANURADHA PROPERTIES TO LINK THE SAME WITH THE ENTRIES IN SEI ZED MATERIAL 3. GROUND NO. 1 IS GENERAL IN NATURE AND THEREFORE THE SAME IS NOT REQUIRED TO BE ADJUDICATED BY US. 4. THE FACTS RELATING TO THE GROUND NOS. 2 & 3 PER TAINING TO THE ADDITION OF RS. 2,05,273/- ON ACCOUNT OF UNEXPLAINED CASH CREDI T U/S 68 OF THE ACT, ARE CONCERNED, THE AO NOTICED FROM THE CAPITAL ACCOUNT THAT AN AMOUNT OF RS. 2,05,273/- WAS THE FRESH CREDIT INTRODUCED DURING T HE YEAR UNDER CONSIDERATION. ON BEING ASKED BY THE AO TO FURNISH THE DOCUMENTARY EVIDENCE, THE ASSESSEE FAILED TO SUBSTANTIATE HIS CLAIM, THER EFORE, THE AO TREATED THE SAID AMOUNT AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT , AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, THE AS SESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A), IT WAS ARGUED THAT THE ASSESS EE HAD FILED RECEIPTS AND PAYMENTS A/C IN SUPPORT OF THE SOURCES OF INVESTMEN T IN THE CAPITAL AND THE ASSESSEE HAD SOURCES FOR THE INVESTMENT IN CAPITAL OF THE BUSINESS GLOBAL EXPRESS SHIPPING IT WAS FURTHER ARGUED THAT THE AO HAD NEITHER CONSIDERED THE SAME NOR ACKNOWLEDGED THE SUBMISSIONS OF SUCH AN EV IDENCE WHILE TREATING THE CAPITAL INVESTMENT AS UNEXPLAINED CASH CREDIT. AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT(A) SUSTAINED TH E ADDITION MADE BY THE AO OBSERVING THAT THE ASSESSEE HAS FAILED NOT ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS BUT ALSO IN THE APPELLANT PROCEEDINGS T O PRODUCE NECESSARY SUPPORTING EVIDENCES TO THE SOURCES OF THE CREDIT O F RS. 2,05,273/- IN THE CAPITAL ACCOUNT FOR THE YEAR UNDER CONSIDERATION. S TILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 40/HYD/2012 MOHD. HIDAYATHULLAH OWAIS 3 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI A.V. RAGHURAM SUBMITTED THAT THE ASSESSEE HAD FILED RECEIPTS AND PAYMENTS ACCOUNT ON 13/03/2009 IN SUPPORT OF SOURCES OF INVESTMENT IN T HE CAPITAL. HE POINTED OUT THAT FROM THE SAID RECEIPTS AND PAYMENTS STATEMENTS , THE ASSESSEE HAD SOURCES FOR INVESTMENT IN CAPITAL OF THE BUSINESS GLOBAL E XPRESS SHIPPING. IN THIS CONNECTION, HE INVITED OUR ATTENTION TO PAGE 2 OF T HE PAPER BOOK, WHICH IS PERSONAL BALANCE SHEET OF THE ASSESSEE FOR AY 2005- 06, TO CONTEND THAT THE AO HAS NEITHER CONSIDERED THE SAME NOR ACKNOWLEDGED TH E SUBMISSIONS OF SUCH AN EVIDENCE WHILE TREATING THE CAPITAL INVESTMENT AS U NEXPLAINED CASH CREDIT. HE, THEREFORE, PLEADED THAT THE MATTER MAY BE SENT BACK TO THE AO TO VERIFY THE SAID DOCUMENTARY EVIDENCE AND OTHER SOURCES OF INCOME OF THE ASSESSEE. 7. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. THE GRIEVANCE OF THE ASSESSEE IS THAT THE AO IGNORED TH E CASH FLOW STATEMENT FILED BEFORE HIM AND SINCE THE AO HAS NOT POINTED OUT ANY MISTAKE IN THE CASH FLOW STATEMENT, THEN THERE IS NO REQUIREMENT FOR ADDUCIN G EVIDENCE FOR SOURCES PARTICULARLY WHEN THE CAPITAL IS INTRODUCED FROM OU T OF AVAILABLE FUNDS. AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE OPINION THAT THE ISSUE NEEDS VERIFICATION, THEREFORE, WE SET ASIDE T HE ORDER OF THE CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRE CTION TO DECIDE THE ISSUE AFTER EXAMINING THE RECORD & OTHER SOURCES OF INCOME OF T HE ASSESSEE AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO PUT FORTH THE NECESSARY EVIDENCE AS REQUIRED BY THE AO IN SUPPORT OF HIS CASE. ACCORDIN GLY, GROUND NOS. 2 & 3 ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 40/HYD/2012 MOHD. HIDAYATHULLAH OWAIS 4 9. THE FACTS RELATING TO THE GROUND NO. 4 PERTAININ G TO THE ADDITION OF RS. 1,25,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT ON PURCHASE OF LAND PROPERTY U/S 69 OF THE ACT ARE CONCERNED, IT IS OBS ERVED THAT THE AO MADE THE ADDITION BASED ON SEIZED DOCUMENT FOUND IN THE COUR SE OF SEARCH CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 12/12/2007. IN THE PAPERS FOUND DURING THE COURSE OF SEARCH CLEAR NOTINGS WERE MADE ABOUT THE PAYMENTS ON ACCOUNT OF PURCHASE OF PLOTS. WHEN THESE PAYMENTS WERE CONFRON TED TO THE ASSESSEE, IT WAS CONFIRMED BY THE ASSESSEE THAT THE NOTINGS WERE IN HIS HAND WRITING AND CONFIRMED THE PAYMENTS MADE BY HIM ON VARIOUS DATES . THEREFORE, THE AO MADE THE SAID ADDITION AS UNEXPLAINED INVESTMENT. O N APPEAL, THE CIT(A) CONFIRMED THE SAID ADDITION BY HOLDING THAT THERE I S CORROBORATIVE EVIDENCE TO THE NOTINGS IN THE PAPERS FOUND DURING THE COURSE O F SEARCH AS THE ASSESSEE IS DEALING WITH PERSONS MENTIONED THEREIN IN RESPECT O F PURCHASE OF PROPERTIES AND IT IS FOR THE ASSESSEE TO REBUT SUCH EVIDENCES FOUND DURING THE SEARCH WITH CONCLUSIVE EVIDENCES. THE CIT(A) OBSERVED THAT NO SUCH ATTEMPT HAD BEEN MADE BY THE ASSESSEE TO REBUT THE ABOVE EVIDENCES W HICH WERE CONFRONTED TO HIM. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEF ORE US. 10. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROPERTY AT GOLKONDA WAS PURCHASED BY THE ASSESSEE IN NOVEMBER, 2008 AND A COPY OF WHICH HAS BEEN FILED BEFORE THE REVENUE AUT HORITIES. IT IS SUBMITTED THAT THE SAID PROPERTY WAS PURCHASED FOR RS. 14,94,000/- AND THE SAME WAS PAID OUT OF ASSESSEES INCOME AND SAVINGS. HE CONTENDED THAT THE REFERENCE OF NOTINGS IN THE SEIZED MATERIAL FROM THE PREMISES OF THE ASSESSEE AND M/S HYDERABAD HOUSE (P) LTD., ARE MERE NOTINGS OF THE P ROPOSED PURCHASE. THE LEARNED COUNSEL SUBMITTED THAT PROPERTY BELONGED TO M/S ANURADHA PROPERTIES AND THEY ALONE SOLD THE SAME TO THE ASSESSEE. 11. THE LEARNED DR ON THE OTHER HAND RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. ITA NO. 40/HYD/2012 MOHD. HIDAYATHULLAH OWAIS 5 12. AFTER HEARING THE PARTIES AND PERUSING THE RECO RD, IT IS OBSERVED THAT MERELY BASED ON THE NOTINGS IN THE SEIZED MATE RIAL FROM THE PREMISES OF THE ASSESSEE AND COMING TO THE CONCLUSION THAT THE ASSESSEE MADE UNEXPLAINED INVESTMENT IN THE PLOTS AND MAKING ADDITION U/S 68 IS NOT PROPER WITHOUT BRINGING ON RECORD PROPER EVIDENCE TO SHOW THAT ASS ESSEE HAS INVESTED UNEXPLAINED MONEY IN THE PLOTS. ON THE CONTRARY, TH E ASSESSEES SUBMISSION IS THAT THE NOTINGS IN THE SEIZED MATERIAL ARE MERE NO TINGS OF THE PROPOSED PURCHASE BY THE ASSESSEE IS ALSO NOT CONVINCING. WE , THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE AO TO EXAMINE THE FACTS AN D BRING THE FACTS ON RECORD WHETHER THE ASSESSEE HAS MADE UNEXPLAINED INVESTMEN T IN PLOTS OR NOT WITH CORROBORATIVE EVIDENCE TO MAKE THE ADDITION U/S 68 OF THE ACT. THUS, THIS GROUND IS TREATED AS ALLOWED FOR STATISTICAL PURPOS ES. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 06/06/2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 6 TH JUNE, 2012. KV COPY TO:- 1) MOHDE. HIDAYATHULLAH OWAIS, C/O K. VASANTKUMAR & A.V. RAGHURAM ADVOCATES, 610, 6 TH FLOOR, BABHUKHAN ESTATE, BASHEERBAGH, HYDERABAD 1/ 2) DCIT, CENTRAL CIRCLE 2, HYDERABAD 3) THE CIT (A)-I, HYDERABAD 4) THE CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.