The ITO, Ward-1, Srikakulam V. Sri Tandi Musali Naidu, Srikakulam

ITA 470/VIZ/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0120 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 05-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Unexplained investment
• Section: 69; 132

Judgement Text

PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.470/VIZAG/2008 ASSESSMENT YEAR: 2005-06 ITO WARD-1, SRIKAKULAM VS. TANGI MUSALINAIDU, SRIKAKULAM (APPELLANT) (RESPONDENT) PAN NO. AGHPT 5654 N APPELLANT BY: SHRI R.K. SINGH, DR RESPONDENT BY: SHRI I. KAMASASTRY, CA ORDER PER SHRI B R BASKARAN, ACCOUNTANT MEMBER : THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 30.6.2008 PASSED BY THE LD CIT (A)-I VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2005-06. 2. THE ADDITION OF RS.20.50 LAKHS MADE BY THE ASSES SING OFFICER U/S 69 OF THE ACT, HAVING BEEN DELETED BY THE LD CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 3. THE FACTS RELATING TO THE ISSUE ARE SET OUT IN B RIEF. THE ASSESSEE IS AN AGRICULTURIST. DURING THE COURSE OF SEARCH AND SEIZ URE OPERATION CARRIED U/S 132 OF THE ACT IN THE HANDS OF ASSESSEES SON NAMED SHRI TANGI HARI, IT WAS NOTICED THAT A LAND HAD BEEN PURCHASED IN THE NAME OF THE ASSESSEE HEREIN AT A COST OF RS.20.50 LAKHS. THE ASSESSEE HEREIN EXPL AINED THAT THE SAID INVESTMENT WAS MADE BY HIS SON. THE ASSESSING OFFI CER REJECTED THE SAID EXPLANATION AND TREATED THE SAME AS INCOME OF THE A SSESSEE U/S 69 OF THE ACT. AT THE SAME TIME, THE ASSESSEES SON ALSO ADMI TTED THAT HE HAS ONLY PAGE 2 OF 3 MADE THE IMPUGNED INVESTMENT AND ACCORDINGLY THE IM PUGNED AMOUNT WAS ASSESSED IN HIS HANDS ALSO. IN VIEW OF THE ABOVE, L D CIT (A) DELETED THE IMPUGNED ADDITION WITH THE FOLLOWING OBSERVATIONS: FURTHER IT IS NOTICED THAT THE APPELLANTS SON TAN GI HARI ADMITTED THAT THE SOURCES OF INVESTMENT FOR THE LAN DS ACQUIRED IN THE NAME OF THE APPELLANT WHO HAPPENED TO BE HIS FATHER WAS FINANCED BY HIM. IN FACT, HE TRIED T O EXPLAIN THE SOURCES FOR MAKING SUCH INVESTMENT WHILE EXPLAINING HIS CASE BEFORE THE ASSTT. COMMISSIONER OF INCOME TAX, CENTR AL CIRCLE- 1, VISAKHAPATNAM. THE ASSISTANT COMMISSIONER OF INC OME TAX, CENTRAL CIRCLE-1 VISAKHAPATNAM DID NOT ACCEPT HIS EXPLANATION AND TREATED INTER ALIA RS.20,00,000/- R EPRESENTING THE LAND TRANSACTIONS RECORDED ON 19-09-2004, 19-3- 2005 & 19-06-2005 WHICH WERE ACQUIRED IN THE NAME OF THE APPELLANT, AS HIS UNEXPLAINED INVESTMENT VIDE ASSES SMENT ORDER DATED 18-12-2007. THUS, IT COULD BE SEEN THAT OUT OF RS.20,00,000/- THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, VISAKHAPATNAM TREATED RS.14,00,00 0/- AS THE UNEXPLAINED INVESTMENT OF SRI TANGI HARI IN THE ASS ESSMENT YEAR 2005-06 AND THE BALANCE OF RS.6,00,000/- IN TH E ASSESSMENT YEAR 2006-07. IN THE IMPUGNED ASSESSMENT ORDER OF THE APPELLANT, THE ASSESSING OFFICER HAS TREATED THE SAME AGAIN AS THE UNEXPLAINED INVESTMENT OF THE APPELLAN T. THEREFORE, CLEARLY THE SAID INCOME HAD BEEN TAXED T WICE. THE HONBLE SUPREME COURT IN THE CASE OF LAXMIPAT SINGH ANIA V. CIT REPORTED IN 72 ITR, 291 CLEARLY LAID DOWN THE P ROPOSITION THAT IT IS A FUNDAMENTAL RULE OF THE LAW OF TAXATIO N THAT, UNLESS OTHERWISE EXPRESSLY PROVIDED, INCOME CANNOT BE TAXE D TWICE. IN THE INSTANT CASE, OUT OF RS.20,50,005/- CONSIDERE D BY THE ASSESSING OFFICER, AN AMOUNT OF RS.20,00,000/- WAS TREATED AS UNEXPLAINED INVESTMENT OF THE APPELLANTS SON SRI T ANGI HARI BY THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CI RCLE-1 VISAKHAPATNAM VIDE ORDER DATED 18-12-2007. THE BALA NCE OF RS.50,005/- WAS NOT CONSIDERED BY THE ASSTT. COMMIS SIONER OF INCOME TAX, CENTRAL CIRCLE-1, VISAKHAPATNAM ON TH E GROUND THAT THE APPELLANT HAD ADEQUATE SOURCES FROM AGRICULTURAL INCOME AND EVEN IF IT WAS CONSIDERED UNEXPLAINED, THE SAME WAS BELOW TAXABLE LIMIT. HENC E, IT COULD BE SEEN THAT THE SAID AMOUNT OF RS.20,00,000/ - HAVE BEEN TAXED TWICE ONCE IN THE HANDS OF APPELLANTS S ON VIDE ORDER DATED 18-12-2007 AND ONCE IN THE HANDS OF THE APPELLANT VIDE THE IMPUGNED ORDER. THE SAID ACTION IS AGAINST PAGE 3 OF 3 THE FUNDAMENTAL RULE OF LAW OF TAXATION. AT BEST, T HE ASSESSING OFFICER WOULD HAVE TREATED THE SAID AMOUNT AS UNEXP LAINED INVESTMENT OF THE APPELLANT AS A PROTECTIVE MEASURE . SINCE THE ASSESSING OFFICER HAS TREATED THE AMOUNT OF RS.20,50,005/- AS UNEXPLAINED INVESTMENT IN A SUBST ANTIVE MANNER, THE SAME CANNOT BE SUSTAINED AND THEREFORE, DELETED . ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED . 4. ON A CAREFUL PERUSAL OF THE ORDER OF THE LD CIT (A) WE FIND THAT THE LD CIT (A) HAS GRANTED RELIEF ON PROPER APPRECIATION O F FACTS AND ALSO ON PROPER APPLICATION OF LAW ON THE IMPUGNED ISSUE. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD CIT (A). 5. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 15 TH SEPTEMBER, 2009 SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, 15 TH SEPTEMBER,2009. COPY TO 1 THE ITO, WARD-1, SRIKAKULAM 2 SHRI TANGI MUSALINAIDU, PEDDAPUDIVALASA VILLAGE, ETCHERLA MANDALAM, SRIKAKULAM DISTRICT 3 THE CIT (A) VISAKHAPATNAM 4 THE CIT, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM