S. Madhavi, Hyderabad V. ACIT, Circle -8(1), Hyderabad

ITA 412/HYD/2012

• Counselvise Citation: 41222514 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Search and seizure; Corroborative evidences
• Section: 143(3); 153A; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 412/HYD/2012 ASSESSMENT YEAR 2004-05 SMT. S. MADHAVI HYDERABAD PAN: ANYPS4381H VS. THE ASST. CIT CIRCLE-8(1) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI S. RAMA RAO RESPONDENT BY: SRI SOLGY JOSE T. KOTTARAM DATE OF HEARING: 01.07.2014 DATE OF PRONOUNCEMENT: 09 .07.2014 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-III, HYDERABAD DATED 28.09.2011 FOR ASSESSMENT YEAR 2004-05. 2. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME CONSISTING OF REMUNERATION AND SHARE OF PROFIT FROM DIFFERENT FIRMS. DURING THE SEARCH OPERATION CONDU CTED U/S. 132 OF THE INCOME-TAX ACT, 1961 ON 29.10.2007 IN THE CASE OF SRI D. NAGARJUNA RAO AND OTHERS, CERTAI N INCRIMINATING DOCUMENTS PERTAINING TO TRANSACTIONS MADE BY THE ASSESSEE WERE SEIZED. THE ASSESSING OFFICER ISSUED NOTICE U/S. 153C R.W.S. 153A OF THE ACT TO THE ASSE SSEE ON 16.10.2008 CALLING FOR RETURNS OF INCOME FOR DIFFER ENT ASSESSMENT YEARS. IN RESPONSE TO THE SAME, THE ASS ESSEE 2 ITA NO. 412/HYD/2012 SMT. S. MADHAVI ================== FILED RETURN OF INCOME FOR A.Y. 2004-05 ON 24.11.20 09 SHOWING INCOME OF RS. 44,680. 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD INTRODUCED CA PITAL OF RS. 85,000 DURING THE PREVIOUS YEAR IN THE FIRM M/S . SRI SAI CONSTRUCTIONS. THE ASSESSEE HAD STATED THAT SH E HAD RECEIVED THE AMOUNT OF RS. 85,000 FROM HER HUSBAND. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD NO T FURNISHED ANY EVIDENCE IN SUPPORT OF SUCH TRANSACTI ON AND CREDITWORTHINESS OF HER HUSBAND AND ADDED THE S AID AMOUNT TO THE INCOME OF THE ASSESSEE TREATING THE S AME AS UNEXPLAINED INVESTMENT MADE BY HER U/S. 69 OF TH E ACT. THE ASSESSING OFFICER COMPLETED THE ASSESSMEN T ON THE TOTAL INCOME OF RS. 1,29,680 VIDE HIS ORDER DAT ED 30.12.2009 PASSED U/S. 143(3) R.W.S. 153C R.W.S. 15 3A OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPE AL BEFORE THE CIT(A). 4. THE NEXT ISSUE IS WITH REGARD TO ADDITION OF RS. 85,000 MADE IN THE ASSESSMENT. 5. IT WAS CONTENDED BY THE LEARNED AR THAT THE ASSESSEE HAD FURNISHED SUPPORTING EVIDENCE FOR SAVI NGS IN THE HANDS OF ASSESSEE'S HUSBAND AND HAD EXPLAINED S UCH INVESTMENT WAS MADE IN THE FIRM M/S. SRI SAI CONSTRUCTIONS. THE AR CONTENDED THAT THE ADDITION MADE IS NOT JUSTIFIED AND REQUESTED TO DELETE THE S AME. 6. THE CIT(A) HELD THAT DURING THE ASSESSMENT PROCEEDINGS ON 22.12.2009 BEFORE THE ASSESSING OFFI CER, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNIS H PROOF IN SUPPORT OF THE CAPITAL CONTRIBUTION MADE BY HER TO THE 3 ITA NO. 412/HYD/2012 SMT. S. MADHAVI ================== CAPITAL ACCOUNT IN THE SAID FIRM. HOWEVER, THE ASS ESSEE IN RESPONSE VIDE LETTER DATED 29.12.2009 HAD STATED TH AT THE AMOUNTS DRAWN WERE FROM THE ACCOUNT OF HER HUSBAND IN STATE BANK OF HYDERABAD FROM HIS SAVINGS. THE CIT( A) FURTHER HELD THAT THERE WERE TWO CASH WITHDRAWALS, (1) RS. 50,000 ON 8.10.2003 AND (2) RS. 35,000 ON 19.11.200 3. THE CIT(A) HAD OBSERVED THAT THE SUM OF RS. 85,000 SHOWN AS ADDITION IN THE COPY OF THE ACCOUNT OF THE FIRM M/S. SRI SAI CONSTRUCTIONS WAS WITHOUT ANY DATE. U NDER THESE CIRCUMSTANCES, HE HELD THAT IT CANNOT BE SAID THAT THE SAID AMOUNTS WITHDRAWN ON 8.10.2003 AND 19.11.2003 FROM THE BANK ACCOUNT OF HER HUSBAND WER E DEPOSITED WITH THE FIRM. THEREFORE, THE ADDITION O F RS. 85,000 WAS CONFIRMED BY THE CIT(A). AGGRIEVED, TH E ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE FOLL OWING GROUNDS OF APPEAL: A) THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. B) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ISSUING NOTICE U/S. 153C OF THE IT ACT, WITHOUT CONSIDERING THE FACT THAT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. C) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF RS. 85,000 BY APPLYING THE PROVISIONS OF SEC. 69 OF THE IT ACT. THE LEARNED CIT(A) ERRED IN NOT ACCEPTING THE EXPLANATION SUBMITTED BY THE APPELLANT. 7. THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A). 4 ITA NO. 412/HYD/2012 SMT. S. MADHAVI ================== 8. THE LEARNED DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD BOTH PARTIES. WE FIND THAT IN RESPONSE TO NOTICE ISSUED U/S. 143(2) DATED 24.11.2 009, THE AR OF THE ASSESSEE HAD FURNISHED THE REQUIRED INFORMATION OF THE PARTNER'S CAPITAL ACCOUNT AND HA D ALSO EXPLAINED THAT THE AMOUNT WAS INVESTED IN THE CAPIT AL ACCOUNT OF THE ASSESSEE WITH M/S. SRI SAI CONSTRUCT IONS DRAWN FROM THE SAVINGS OF SRI S.K. VISVESWARA RAO, HUSBAND OF THE ASSESSEE. WE ALSO FIND FROM THE CO PY OF RETURN OF INCOME OF THE PARTNERSHIP FIRM FILED BEFO RE US FOR A.Y. 2004-05, IN WHICH THE ASSESSEE IS A PARTNER, A LONG WITH PARTNERS CAPITAL ACCOUNT WITH THE AMOUNT OF RS . 85,000 AS ON 8.3.2011 IS ACCOUNTED. FROM THE BANK ACCOUNT STATEMENT OF ASSESSEE'S HUSBAND, WITHDRAWAL S FROM THE ACCOUNT SUPPORT THE SOURCE FOR INVESTMENT MADE BY THE ASSESSEE. HENCE WE ARE OF THE OPINION THAT THE REVENUE AUTHORITIES ARE NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 85,000 IN THE HANDS OF THE ASSESSEE ON THE GROUND THAT NO SUPPORTING EVIDENCE/ PROOF AND THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF HER HUSBAND ARE PROVED. ON THE CONTRARY, THE COPY OF THE CAPITAL ACCOUNT OF THE PARTNER HAS BEEN FURNISHED A LONG WITH THE COPY OF BANK STATEMENT IN RESPECT OF HER HUSBAND SRI VISVESWARA RAO. FURTHER AT PAGE 19 OF THE PAPER BOOK THE COUNSEL HAD PRODUCED THE CERTIFICATE CONFIRMING THE AMOUNT GIVEN BY SRI VISVESWARA RAO. TAKING INTO ACCOUNT THE TOTALITY OF THE FACTS, WE A RE OF THE OPINION THAT THE SOURCE OF THE CAPITAL INTRODUCED O F RS. 85,000 IS EXPLAINED AND HENCE THE ADDITION OF RS. 8 5,000 MADE U/S. 69 OF THE ACT IS TO BE DELETED. 5 ITA NO. 412/HYD/2012 SMT. S. MADHAVI ================== 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 9 TH JULY, 2014 SD/ - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED THE 9 TH JULY, 2014 TPRAO COPY TO: 1. SMT. S. MADHAVI, C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYA'S ELEGANCE, ST. NO. 9, HIMAYATHNAGAR, HYDERABAD-500 029. 2. THE ASST. CIT, CIRCLE - 8(1), HYDERABAD. 3. THE CIT(A) - II I, HYDERABAD. 4. THE CIT - II , HYDERABAD. 5. THE DR, B - BENCH, ITAT, HYDERABAD.