Asst. Commissioner of Income Tax, Circle-9(1), Hyderabad V. Shetty Yellaiah, Hyderabad

ITA 427/Hyd/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6961 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DANDA SRINIVAS
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Unexplained cash credit; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 427/HYD/2020 ASSESSMENT YEAR: 2009-10 ASST.COMMISSIONER OF INCOME TAX, CIRCLE-9(1), HYDERABAD VS SHETTY YELLAIAH, HYDERABAD [PAN: AGQPS2236Q] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI DANDA SRINIVAS, DR FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR DATE OF HEARING : 22-07-2021 DATE OF PRONOUNCEMENT : 07-09-2021 O R D E R PER S.S.GODARA, J.M. : THIS REVENUES APPEAL FOR AY.2009-10 ARISES FROM THE CIT(A)-7, HYDERABADS ORDER DATED 12-12-2019 PASSED IN CASE NO.0022/CIT(A)-7/2019-20, IN PROCEEDINGS U/S.143(3) R.W.S.153A OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. AT THE OUTSET, WE NOTICE THAT THIS REVENUES APPEAL SUFFERS FROM DELAY OF 131 DAYS AS ATTRIBUTABLE TO THE R EASONS MENTIONED IN THE PETITION/AFFIDAVIT AND ON ACCOUNT OF N O OBJECTION FROM ASSESSEES SIDE. THIS DELAY STANDS CO NDONED THEREFORE. ITA NO. 427/HYD/2020 :- 2 -: 3. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE RAISED I N THE INSTANT LIS CHALLENGES CORRECTNESS OF THE CIT(A)S LOWE R APPELLATE ORDER REVERSING THE ASSESSMENT FINDINGS MAKI NG UN- EXPLAINED INVESTMENT ADDITION OF RS.2,11,00,000/- VID E FOLLOWING DETAILED DISCUSSION: 8.5. FURTHER, DURING THE COURSE OF APPELLATE PROCE EDINGS, THE AR OF THE APPELLANT BROUGHT TO MY ATTENTION THE ORDER PAS SED BY THE SAME ASSESSING OFFICER PASSED IN THE CASE OF MIS. SRI SA I VENKATESWARA REALTORS FOR A.Y.2009-10 DATED 31-12-2010 AND THE O RDER IN THE SRI. M SAMBASIVA RAO FOR A.Y. 2009-10 DATED 31-12-2010 W HEREIN THE SAME ASSESSING OFFICER WHO PASSED THE ORDERS IN ALL THREE CASES REJECTED TRIAL BALANCE I.E. TRIAL BALANCE AS ON 14T H JULY 2008, TRIAL BALANCE AS ON 30TH JUNE 2008 AND ALSO OBSERVED THAT NO REGULAR BOOKS OF ACCOUNTS WERE FOUND DURING THE SEARCH NOR WERE PRODUCED AFTER THE SEARCH WHILE MAKING THE ADDITION OF RS. 2 CRORES ON PROTECTIVE BASIS OUT OF THE CASH SEIZED OF RS.2,01, 50,000/- AS UNEXPLAINED CASH IN THE HAND OF MIS. SRI SAI VENKAT ESWARA REALTORS AND IN THE HAND OF SRI. M SAMBASIVA RAO ON SUBSTANT IVE BASIS. THE AR OF THE APPELLANT FURTHER BROUGHT TO MY ATTENTION BY SUBMITTING THE COPY OF THE ORDER OF HON'BLE ITAT IN ITA NO. 1853/H YD/2014 FOR A.Y. 2009-10 IN THE CASE OF SRI. M SAMBASIVA RAO WHEREIN HON'BLE ITAT CONFIRMED THE CONCLUSION DRAWN BY CIT(A) AND FURTHE R OBSERVED THAT THE SAID CASH SHOULD BE CONSIDERED AND ADDRESSED IN THE ASSESSMENT OF THE FIRM I.E. M/S.SRI 5AI VENKATESWAR A REALTORS. THE CONTENTION OF THE AR OF APPELLANT IS EXAMINED IN TH E LIGHT OF THE ORDERS OF ASSESSMENTS PASSED BY ASSESSING OFFICER IN THE C ASE OF SRI. M SAMBASIVA RAO AND MIS. SRI SAI VENKATESWARA REALTOR S FOR A.Y. 2009-10. AS PER THE TRIAL BALANCE AS ON SO' JUNE 20 08, THE CASH AVAILABLE WAS SHOWN AT RS.14,69,000/- IN THE HAND O F M/S. SRI SAI VENKATESWARA REALTORS. AS PER THE TRIAL BALANCE AS ON 14T~ JULY 2008, THE CASH BALANCE SHOWN WAS RS.2,02,32,499/-. THE ASSESSING OFFICER REJECTED THE TRIAL BALANCE AS ON 14TH JULY 2008 HOLDING THAT THE FIRM DID NOT MAINTAIN BOOKS OF ACCOUNTS AND ADD ED RS. 2 CRORES AS UNEXPLAINED CASH IN THE HAND OF SRI. M SAMBASIVA RAO. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSING OFFICE R IS SILENT ON THE CASH AVAILABILITY OF RS. 14,69,000/- AS PER THE SEI ZED TRIAL BALANCE AS ON 30TH JUNE 2008 WHILE MAKING ASSESSMENT ORDER OF THE FIRM AS WELL AS M SAMBASIVA RAO. THE ASSESSING OFFICE REJEC TED THE GENUINENESS OF THE AGREEMENTS WITH RESPECT TO THE A DVANCES RECEIVED AS ON 14.07.2008 IN THE REMAND REPORT ON THE GROUND THAT NONE OF THE AGREEMENTS WERE REGISTERED. THE CONTENTION OF THE A PPELLANT WAS THAT THE RECONCILIATION OF THE ADVANCES RECEIVED BY THE FIRM THROUGH HIM AS ON 30.06.2008 AND 14.07.2008 COULD NOT BE DONE DUE TO NON- ITA NO. 427/HYD/2020 :- 3 -: MAINTENANCE OF BOOKS OF ACCOUNTS. THE NON-CONSIDERA TION OF THE CASH BALANCE OF RS. 14,69,000/- AS PER THE SEIZED DOCUME NT AND THE FINDING OF THE ASSESSING OFFICER IN THE CASE OF M S AMBASIVA RAO AND SRI SAI VENKATESWARA REALTORS THAT NO BOOKS OF ACCO UNTS ARE MAINTAINED PROVES THAT THE ASSESSING OFFICER IMPLIE DLY REJECTED THE TRIAL BALANCE AS PER SEIZED DOCUMENT AS ON 30TH JUN E 2008 ALSO. IT IS TO BE MENTIONED HERE THAT PARTICULAR SEIZED DOCUMEN T I.E. TRIAL BALANCE AS ON 30.06.2008 OF SRI SAI VENKATESWARA RE ALTORS WAS FOUND FROM THE RESIDENCE OF THE SRI. M SAMBASIVA RA O. NO SUCH DOCUMENT WAS FOUND FROM THE RESIDENCE OF THE APPELL ANT. THE APPELLANT NEVER OWNED THE CONTENTS OF THE SEIZED DO CUMENT DURING THE COURSE OF SEARCH OPERATION OR POST SEARCH OPERA TION. THERE WAS NO EVIDENCE TO THAT EFFECT. THEREFORE, THE CONTENTION OF THE ASSESSING OFFICER THAT THE APPELLANT OWNED THE SEIZED DOCUMEN T IS NOT ACCEPTABLE. THE APPELLANT ALL ALONG CLAIMED THAT HE HAD MADE INVESTMENT OF RS.15,00,00/- ONLY IN THE FIRM M/S. S RI SAI VENKATESWARA REALTORS WHILE FILING RETURN OF INCOME FOR A.Y. 2009-10. THE APPELLANT ALL ALONG MAINTAINED THAT THESE AMOUN TS REPRESENTS THE COLLECTIONS FROM CUSTOMERS TOWARDS ADVANCES FOR SAL E OF PLOTS. THE ASSESSING OFFICER ADDED BALANCE MONEY OF RS.2.11 CR ORES (I.E. 2,26,00,000 - 15,00,000) IN THE HAND OF APPELLANT W ITHOUT ESTABLISHING THAT THE ENTRY IN THE TRIAL BALANCE AS ON 30 TH JUNE 2008 IN THE NAME OF SY AS BELONGING TO THE APPELLANT PAR TICULARLY WHEN THE SAME ASSESSING OFFICER IGNORED THE CASH BALANCE OF RS.14,69,000/- AS ON 30TH JUNE 2008 WHILE MAKING ADDITION OF RS. 2 CRORES IN THE HAND OF M SAMBASIVA RAO. EVEN IF THE ENTRIES APPEAR ING ON THE CREDIT SIDE OF THE SEIZED TRIAL BALANCE ARE TRUE, THE UNEX PLAINED CREDIT ENTRY, IF ANY, REQUIRES TO BE ADDED IN THE HAND OF THE FIR M ONLY. THE APPELLANT CANNOT BE HELD RESPONSIBLE FOR THE UNEXPL AINED CREDIT ENTRY APPEARING IN SEIZED DOCUMENT WHICH PERTAINS TO THE FIRM AS THE PARTICULAR SEIZED DOCUMENT WAS FOUND AT THE RESIDEN CE OF SRI. M SAMBASIVA RAO AND NOT AT THE RESIDENCE OF THE APPEL LANT. CONSIDERING THE FACTUAL MATRIX OF THE CASE, THE UNE XPLAINED AMOUNT OF RS.2,11,00,000/-, IF ANY, SHOULD BE CONSIDERED AND ADDRESSED IN THE ASSESSMENT OF THE FIRM M/S. SRI SAI VENKATESWARA RE ALTORS ONLY ON THE LINES OF THE ORDER OF ITAT IN THE CASE OF M SAM BASIVA RAO IN ITA NO.1853/HYD/2014 FOR A.Y. 2009-10. IT IS MENTIONED HERE THAT THE HON'BLE ITAT IN THE CASE OF M/S. SRI SAI VENKATESWA RA REALTORS IN ITA NO. 1152/HYD/2015 FOR A.Y. 2009-10 DATED 21-12- 2016 SET ASIDE THE UNEXPLAINED CASH TO THE CIT(A) FOR RECONS IDERATION. THE ASSESSING OFFICER MAY TAKE REMEDIAL MEASURES BY BRI NGING THE ISSUE OF UNEXPLAINED CREDIT OF RS. 2,11,00,000/-, IF ANY, AS PER LAW BEFORE CONCERNED CIT(A)/ITAT WHO IS DECIDING THE APPEAL IN THE CASE OF M/S. SRI SAI VENKATESWARA REALTORS FOR A.Y. 2009-10. THE REFORE, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIO N OF RS. 2,11,00,000/- MADE IN THE CASE OF THE APPELLANT. ITA NO. 427/HYD/2020 :- 4 -: 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS. SUFFICE TO SAY, IT HAS COME ON RECORD THAT TH E DEPARTMENT HAD MADE AN IDENTICAL ADDITION IN THE HANDS O F MR.SAMBASIVA RAO AS WELL. THIS TRIBUNALS ORDER (SUP RA) HAS HELD THE VERY SUM INFACT ASSESSABLE IN THE HANDS OF TH E FIRM M/S.SRI SAI VENKATESWARA REALTORS. AND THAT BOTH THESE INDIVIDUALS ARE CO-PARTNERS IN THE SAID FIRM. LEARNE D CO- ORDINATE BENCHS ORDER IN FIRMS CASE NO.1152/HYD/20 15, DT.21-12-2016 HAS RESTORED THE INSTANT ISSUE BACK TO THE CIT(A) FOR HIS AFRESH APPROPRIATE ADJUDICATION ON MER ITS. WE THUS HOLD THAT THERE IS NO MATERIAL OR REASON LEFT FOR AS SESSING THE IMPUGNED UN-EXPLAINED INVESTMENT ADDITION IN ASSESSEE/PARTNERS HANDS. THE REVENUES SOLE SUBSTA NTIVE GRIEVANCE IS DECLINED IN THE SAME TERMS THEREFORE. 5. THIS REVENUES APPEAL IS DISMISSED IN ABOVE TERMS . ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 07-09-2021 TNMM ITA NO. 427/HYD/2020 :- 5 -: COPY TO : 1.ASST.COMMISSIONER OF INCOME TAX, CIRCLE-9(1), HYDERABAD. 2.SHETTY YELLAIAH, H.NO.16-2-146/C/2, FLAT NO.202, DAYANAD NAGAR, MALAKPET, HYDERABAD. 3.CIT(APPEALS)-7, HYDERABAD. 4.PR.CIT-7, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.