THE ITO, Ward-3, Rajahmundry, Rajahmundry V. Smt. Chalasani Madhavi Devi, Rajahmundry

ITA 417/VIZ/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0994 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 09-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARVINDAKSHAN
• Keywords: Reasonable cause
• Section: 142(1); 69; 144

Judgement Text

ITA NO.417/VIZAG/2012 CHALASANI MADHAVI DEVI, RAJAHMUNDRY 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.417/VIZAG/2012 ( / ASSESSMENT YEAR: 2005-06) ITO, WARD - 3, RAJAHMUNDRY VS. CHALASANI MADHAVI DEVI, RAJAHMUNDRY [PAN: AAZP C0746L ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI ARVINDAKSHAN, DR / RESPONDENT BY : SHRI P.S.R.V.V. SURYA RAO, AR / DATE OF HEARING : 23.06.2016 / DATE OF PRONOUNCEMENT : 22.07.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), VISAKHAPATNAM DATED 30.7.2012 FOR THE ASSES SMENT YEAR 2005- 06. THERE IS A DELAY IN FILING OF THE APPEAL BY 20 DAYS. TO CONDONE THE DELAY, THE DEPARTMENT HAS FILED A PETITION, WHEREIN IT IS STATED THAT DUE ITA NO.417/VIZAG/2012 CHALASANI MADHAVI DEVI, RAJAHMUNDRY 2 TO THE CHANGE OF THE JURISDICTION AND ALSO DELAY IN RECEIPT OF THE APPELLATE ORDER, THE DEPARTMENT IS NOT ABLE TO FILE THE APPEAL IN TIME. WE FIND THAT THERE IS A REASONABLE CAUSE FOR THE DEP ARTMENT NOT TO FILE THE APPEAL IN TIME. THEREFORE, THE DELAY IS CONDON ED. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL, WIFE OF SH. C. SATYA BHASKAR. IN THIS CASE, THERE WAS AN INFORMAT ION RECEIVED BY THE A.O. THAT THE ASSESSEE HAD INVESTED AN AMOUNT OF RS .84,70,895/- IN FRANKLIN TEMPLETON MUTUAL FUND. AS THE ASSESSEE IS NOT ASSESSED TO TAX, A NOTICE U/S 142(1) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER CALLED AS THE ACT) DATED 31.8.2007 WAS ISSUED REQUESTING THE ASSESSEE TO FILE THE RETURN OF INCOME. AS THERE IS NO RESPONSE TO T HE NOTICE, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 15.11.20 07. HOWEVER, ASSESSEE HAS NOT FURNISHED ANY REPLY TO THE SHOW CA USE NOTICE ISSUED BY THE A.O. ACCORDINGLY, A.O. HAS COMPLETED ASSESSMEN T U/S 144 OF THE ACT BY TREATING THE INVESTMENTS OF RS.84,73,895/- AS UN EXPLAINED INCOME U/S 69 OF THE ACT AND ACCORDINGLY ASSESSMENT WAS COMPL ETED. 3. ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE LD. CIT(A). BEFORE LD. CIT(A), IT WAS SUBMITTED THAT ASSESSEE IS A SEC OND HOLDER IN THE INVESTMENT. ACTUALLY THE INVESTMENTS ARE MADE BY S RI SATYA BHASKAR, ASSESSEES HUSBAND. THE LD. CIT(A) AFTER CALLING T HE REMAND REPORT ITA NO.417/VIZAG/2012 CHALASANI MADHAVI DEVI, RAJAHMUNDRY 3 DELETED THE ADDITION MADE BY THE A.O. BY OBSERVING THAT THE ASSESSEE SMT. MADHAVI DEVI IS ONLY CO-INVESTOR IN THE FRANKL ING TEMPLETON MUTUAL FUND, OF WHICH THE ASSESSEES HUSBAND IS THE ACTUAL OWNER. THE SAID INVESTMENT IS ALSO DECLARED TO THE DEPARTMENT IN TH E RETURN FILED BY SHRI SATYA BHASKAR. 4. ON BEING AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. D.R. HAS SUBMITTED THAT ASSESSEE HAS NOT FILED ANY DETAILS BEFORE THE A.O. OR EVEN BEFORE THE LD. CIT(A). THE LD. CIT(A) SIMPLY RELYING UPON THE REMAND REPORT, DELETED THE ADDITION MADE BY THE A.O. AND SUBMITTED THAT THE ISSUE MAY BE REMITTED BACK TO THE A.O. TO EXAMINE ALL THE DETAILS. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE LD. COMMISSIONER HAS CALLED THE REMAND REP ORT AND IN THE REMAND REPORT IT IS VERY CLEARLY MENTIONED THAT ASS ESSEE IS A SECOND INVESTOR AND HER HUSBAND IS THE FIRST INVESTOR. TH EREFORE, SUBMITTED THAT THE A.O. IS NOT JUSTIFIED IN MAKING THE ADDITION AN D HE STRONGLY SUPPORTED THE ORDER PASSED BY THE A.O. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CASE OF THE A.O. IS THAT THE ASSESSEE HAS INVESTED AN AMOUNT OF ITA NO.417/VIZAG/2012 CHALASANI MADHAVI DEVI, RAJAHMUNDRY 4 RS.84,73,895/- IN THE FRANKLING TEMPLETON MUTUAL FU ND. IT IS ALSO THE CASE OF THE A.O. THAT THE ASSESSEE HAS NOT ASSESSED TO TAX AND A NOTICE WAS ISSUED DATED 31.8.2007 TO FILE A RETURN OF INCO ME. THERE IS NO RESPONSE FROM THE ASSESSEE AND AGAIN HE ISSUED A SH OW CAUSE NOTICE DATED 15.11.2007. EVEN FOR THE SHOW CAUSE NOTICE, ASSESSEE HAS NOT GIVEN ANY REPLY. UNDER THOSE CIRCUMSTANCES, A.O. H AS COMPLETED THE ASSESSMENT U/S 144 OF THE ACT BY TREATING THE INVES TMENT OF RS.84,73,895/- AS AN UNEXPLAINED INCOME OF THE ASSE SSEE U/S 69 OF THE ACT. ON APPEAL, IT IS SUBMITTED THAT THE ASSESSEE IS A SECOND HOLDER AND SH. SATYA BHASKAR IS THE PERSON WHO ACTUALLY IS THE INVESTOR. THE LD. CIT(A) CALLED THE REMAND REPORT. IN THE REMAND REP ORT, THE A.O. HAS OBSERVED THAT ON VERIFICATION OF THE INVESTMENTS, I N THE ACCOUNT OF SH. CH. SATYA BHASKAR FOR THE PERIOD FROM 1.4.2003 TO 3 1.3.2005, IT IS FOUND THAT SHRI SATYA BHASKAR HAS AN OPENING BALANCE OF R S.10 LAKHS AND DURING THIS PERIOD INVESTED AN AMOUNT OF RS.1.36 CR ORES, WITHDRAWN AN AMOUNT OF RS.47,46,975/-. IN THE ABSENCE OF INFORM ATION REGARDING THE INVESTMENTS MADE BY THE ASSESSEE SMT. CH. MADHAVI D EVI, IT CANNOT BE SAID THAT THE ASSESSEE MADE INVESTMENTS IN FRANKLIN G TEMPLETON MUTUAL FUND. BASED ON THE REMAND REPORT, THE LD. CIT(A) D ELETED THE ADDITION MADE BY THE A.O. ITA NO.417/VIZAG/2012 CHALASANI MADHAVI DEVI, RAJAHMUNDRY 5 7. WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUM STANCES OF THE CASE AND WE FIND THAT IT IS NOT CLEAR FROM THE REMA ND REPORT THAT WHO ACTUALLY INVESTED AN AMOUNT OF RS.84,73,895/-. NO DETAILS ARE AVAILABLE BEFORE US. THE CASE OF THE ASSESSEE IS THAT THE AB OVE INVESTMENT IS MADE BY THE ASSESSEES HUSBAND. THE ASSESSEE HAS N OT FILED RETURN OF INCOME. IT IS NOT CLEAR FROM WHICH BANK ACCOUNT TH E DISPUTED INVESTMENTS ARE MADE. THE ASSESSEE HAS NOT FILED D ETAILS OF HER HUSBANDS ACCOUNTS/FUND FLOW STATEMENT TO SHOW THAT INVESTMENT OF RS.84,73,895/- IN FRANKLIN TEMPLETON MUTUAL FUND MA DE BY HIM. IN THE ABSENCE OF THE MATERIAL INFORMATION, IN OUR OPINION , IT IS NECESSARY TO GO BACK TO THE A.O. ACCORDINGLY, WE SET ASIDE THE ORD ER PASSED BY THE LD. CIT(A) AND WE DIRECT THE ASSESSEE TO FILE BANK STAT EMENTS OF HER HUSBAND AND ALSO DETAILS IN RESPECT OF THE INVESTME NT AND RETURN OF INCOME OF HER HUSBAND AND RETURN OF INCOME OF THE A SSESSEE AND AFTER CONSIDERING THE DETAILS FILED BY THE ASSESSEE, THE A.O. IS DIRECTED TO DECIDE THE CASE DE-NOVO KEEPING IN VIEW OF THE ASSE SSMENT IF AT ALL MADE IN THE CASE OF THE ASSESSEES HUSBAND. ITA NO.417/VIZAG/2012 CHALASANI MADHAVI DEVI, RAJAHMUNDRY 6 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND JUL16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 22.07.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO, WARD-3, RAJAHMUNDRY 2. / THE RESPONDENT SMT. CHALASANI MADHAVI DEVI, W/ O SRI CHALASANI SATYA BHASKAR, 85-37-3, COASTAL COMPOUND, OPP. VENKATESWA RANAGAR, J.N. ROAD, RAJAHMUNDRY 3. ) / THE CIT(TDS), HYDERABAD 4. ) ( ) / THE CIT(A),VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM