Nadella Estates Limited , Hyderabad V. Income Tax Officer, Ward-16(2), Hyderabad

ITA 438/Hyd/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1544 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 03-06-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ESTHER N HANGAL
• Assessee Lawyers: K SAI PRASAD
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice; Cost of acquisition; Corroborative evidences; Set aside
• Section: 143(3); 142(1); 144; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 438 / HYD/201 9 ASSESSMENT YEAR: 20 06 - 07 NADELLA ESTATES LTD., HYDERABAD. PAN AABCN 5682M VS. INCOME - TAX OFFICER, WARD 16(2), HYDERABAD. A PPELLANT RESPONDENT ASSESSEE BY: S H RI K. SAI PRASAD REVENUE BY: S MT. ESTHER N. HANGAL DATE OF HEARING: 03 / 0 6 / 201 9 DATE OF PRONOUNCEMENT: 14 / 0 6 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 4 , HYDERABAD, DATED, 2 8 /0 1 /201 9 FOR AY 20 06 - 07 . 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE COMPANY , FILED ITS RETURN OF INCOME FOR THE AY 20 06 - 07 ON 2 4 / 1 1 /20 06 DECLARING NIL INCOME. THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 31/12/2008 BY MAKING THE FOLLOWING ADDITIONS: I) SHARE APPLICATION MONEY TREATED AS UNEXPLAINED U/S 68 RS. 25,00,000 II) PROFIT ON SALE OF LAND RS. 20,64,529 III) UNEXPLAINED INVESTMENT IN LAD U/S 69 RS. 97,000 3. ON APPEAL BY THE ASSESSEE COMPANY, THE CIT(A) VIDE ORDER DATED 20/11/2009 DISMISSED THE APPEAL OF THE ASSESSEE. I.T.A. NO. 438 /HYD/1 9 NADELLA ESTATES LTD., HYD. 2 ON FURTHER APPEAL BY THE ASSESSEE, THE ITAT SET ASIDE THE APPELLATE ORDER TO THE FILE OF CIT(A) WITH A DIRECTION TO PASS DE NOVO APPELLATE ORDER ON MERITS, AFTER HEARING THE PARTIES. THEREAFTER, THE CIT(A) VIDE ORDER DATED 28/10/2011 DISMISSED THE APPEAL OF THE ASSESSEE. ON FU RTHER APPEAL BY THE ASSESSEE, THE ITAT VIDE ITS ORDER IN ITA NO. 2/HYD/2012, DATED 29/07/2015, DIRECTED THE AO TO DELETE THE ADDITION MADE IN RESPECT OF UNEXPLAINED SHARE APPLICATION MONEY U/S 68 OF THE ACT. WITH REGARD TO THE ADDITION MADE IN RESPECT OF U NDISCLOSED PROFIT ON SALE OF LAND, THE ITAT DIRECTED TO VERIFY THE CLAIM OF COST OF ACQUISITION OF LAND BY THE ASSESSEE AND IN RESPECT OF UNEXPLAINED INVESTMENT, THE ITAT DIRECTED THE AO TO ACCORD ONE MORE OPPORTUNITY TO EXPLAIN THE AMOUNTS AND REMITTED TH E MATTER TO THE AO FOR DECIDING AFRESH AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. CONSEQUENT TO THE ORDER OF ITAT, THE AO ISSUED NOTICE U/S 142(1) CALLING FOR THE DETAILS OF COST OF ACQUISITION IN RESPECT OF THE LAND SOLD TO M/S PL COMPUTER S VIDE SALE DEED DATED 29/03/2006 AND THE DETAILS OF INVESTMENTS MADE IN LAND ALONG WITH SUPPORTING EVIDENCES. SINCE, THERE WAS NO COMPLIANCE FROM THE ASSESSEE TO THE SAID NOTICE, THE AO GAVE FURTHER OPPORTUNITIES, HOWEVER, THERE WAS NO RESPONSE FROM THE A SSESSEE . THE AO COMPLETED THE ASSESSMENT BASED ON THE DETAILS/MATERIALS AVAILABLE ON RECORD U/S 144 RWS 254 OF THE ACT. 4.1 AS THE ASSESSEE HAD NOT PRODUCED ANY CORROBORATIVE EVIDENCE WITH RESPECT TO THE COST OF ACQUISITION OF LAND AND IN THE ABSENCE OF ANY SUBSTANTIAL EVIDENCE/EXPLANATION WITH RESPECT TO THE UNEXPLAINED INVESTMENTS, THE ADDITIONS MADE IN THE ORDER OF U/S 143(3) OF THE ACT, DATED 31/12/2008 WERE I.T.A. NO. 438 /HYD/1 9 NADELLA ESTATES LTD., HYD. 3 SUSTAINED, EXCEPT THE ADDITION OF RS. 25,00,000/ - ON ACCOUNT OF SHARE APPLICATION MONEY WHICH WAS DELETED BY THE ITAT. 5. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). EVEN BEFORE THE CIT(A), INSPITE OF SUFFICIENT OPPORTUNITIES GRANTED BY THE CIT(A), NEITHER THE ASSESSEE NOR HIS AR ATTENDED ON THE HEARING DATES AND ACCORDING TO THE CIT(A), THE ASSESSEE WAS NOT EVEN FURNISHED ANY DETAILS OR MATERIAL WITH REGARD TO THE ISSUES RAISED IN APPEAL. ACCORDINGLY, THE CIT(A) FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. B.N. BHATTACHARJEE AND ANR., 118 ITR 461 AND THE HONBLE MP H IGH COURT IN ESTATE OF LATE TUKOJIRAO HOLKAR VS. CIT, 223 ITR 480, DISMISSED THE APPEAL OF THE ASSESSEE. 5.1 EVEN ON MERITS ALSO, THE CIT(A) UPHELD THE ACTION OF AO BY HOLDING THAT AR OF THE ASSESSEE DID NOT RESPOND OR APPEAR TO THE HEARING NOTICES AND H AS NOT FURNISHED SUBMISSIONS/EVIDENCES TO REBUT THE ACTION OF THE AO. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1 THE ORDER OF THE LEARNED FIRST APPELLATE AU THORITY IS NOT CORRECT EITHER IN LAW OR ON FACTS AND IN BOTH. 2. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED I N NOT APPRECIATING CONTENTS AND SUBMISSIONS MADE IN THE STATEMENT OF FACTS AND GROUNDS OF APPEAL FILED BEFORE HIM . 3 THE LEARNED FIRST APPELLATE AUTHOR ITY IS NOT JUSTIFIED NOT AFFORDIN G APPROPRIATE OPPORTUNITY TO THE APPELLANT. 4. THE LEARNED FIRST APPELLATE AU THORITY FAILED TO APPRECIATE THE FACT THAT AS OBSERVED BY HON'BLE INCOME TAX APPELLATE AUTHORITY ALL THE DETAILS ARE VERY MUCH AVAILABLE ON RECORD AND HENCE THE ASSESSING OFFICER IS I.T.A. NO. 438 /HYD/1 9 NADELLA ESTATES LTD., HYD. 4 NOT JUSTIFIED IN REJECTING THE CLAIM OF EX P ENSES RESULTIN G IN LOSS ON SALE OF LAND. 5. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE OBSERVATIONS OF THE HON'BLE INCOME TAX APPELLATE AUTHORITY WHERE IN IT WAS STATED THAT THERE CANNOT BE ANY SUR P IUS TO BE TREATED AS INCOME OF THE ASSESSE E . 6. T HE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE FACT THAT IN THE ABSENCE OF ANY ENQUIRIES CAUSED, ASSESSING OFFICER IS NOT JUSTIFIED IN REJECTING THE CLAIM OF EXPENDITURE/LOSS AND MAKING AN ADDITION OF RS.20,64,529/ - AS P ROFIT ON SALE OF LAND . 7. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE FACT THAT AS OBSERVED HON'BLE INCOME TAX APPELLATE AUTHORITY, THE ASSESSING OFFICER IN THE INITIAL ASSESSMENT U/S 143(3) DID NOT DISPUTE THE CLAIM OF FURTHER EXPENDITURE AND HENCE . THE DISALLOWANCE IN THE ORDER UNDER APPEAL Q UESTIONIN G THE EVIDENCE IS UN J USTIFIED . 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL AT THE TIME OF HEARING OF A PP EAL. PRONOUNCED IN THE OPEN COURT ON JUNE , 201 9. 7 . CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSAL OF RECORD, WE FIND THAT THE ASSESSEE HAS NOT COMPLIED WITH THE HEARING NOTICES ISSUED BY AO AND CIT(A) AND ACCORDINGLY, THE AO UPHELD THE ADDITIONS AS MADE IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, WHICH WAS CONFIRMED BY THE CIT(A). NOW, ASSESSEE SUBMITS THAT ALL THE RELEVAN T INFORMATIONS ARE ALREADY AVAILABLE WITH THE AO. BUT, WE ALSO OBSERVE THAT ASSESSEE HAS NOT COMPLIED WITH THE NOTICES ISSUED BY TAX AUTHORITIES. IT IS NOT PROPER ATTITUDE WHEN SEEKING RELIEF FROM THE DEPARTMENT. HOWEVER, O N TOTALITY OF THE FACTS AND CIRCU MSTANCES OF THE CASE, WE ARE OF THE VIEW THAT TO MEET THE ENDS OF JUSTICE AND FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, WE REMIT THE FILE I.T.A. NO. 438 /HYD/1 9 NADELLA ESTATES LTD., HYD. 5 BACK TO THE FILE OF AO WITH A DIRECTION TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO ARGUE ITS CASE ON MERITS AND THEREAFTER DECIDE THE ISSUES IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO COMPLY WITH THE HEARING NOTICES OF THE AO. WE DIRECT THE AO TO S ERVE THE NOTICE ON THE LATEST ADDRESS AND I N CASE, THE ASSESSEE FAILS TO COMPLY WITH THE NOTICES OF AO, TH E AO IS DIRECTED TO SUSTAIN THE ADDITIONS AS MADE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PR ONOUNCED IN THE OPEN COURT ON 14 TH JUNE, 2019. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 14 TH JUNE , 201 9. KV COPY FORWARDED TO: 1. M/S NADELLA ESTATES LTD., C/O CH. PARTHASARATHY & CO., 1 - 1 - 298/2/B/3, 1 ST FLOOR, ASHOK NAGAR, HYDERABAD 500 0 20 . 2 . ITO, WARD 16(2), IT TOWERS, MASAB TANK, HYDERABAD . 3 . CIT (A) - 4 , HYDERABAD 4. PR. CIT - 4 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE