Thunuguntla Jaganmohan Rao, Guntur, Guntur V. DCIT, Central Circle-2(1), Hyderabad, Hyderabad

ITA 513/HYD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7056 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 18-10-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 20-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Gift; Assessment record; Set aside; Capital Gains
• Section: 143(3); 234B; 201; 69; 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I TA NO S 98/HYD/2016 AND 513 / HYD/20 17 A SSESSMENT Y EAR : 201 1 - 1 2 THUNUGUNTLA JAGAN MOHAN RAO, GUNTUR. PAN A BBPT 6298D VS. DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 2(1) , HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S H RI S. RAMA RAO REVENUE BY: S HRI Y.V.S.T. SAI DATE OF HEARING: 1 8 / 1 0 / 201 9 DATE OF PRONOUNCEMENT: 25 / 1 0 /201 9 O R D E R PER V. DURGA RAO, J.M.: ITA NO. 98/HYD/2016 THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF PR. CIT(CENTRAL), HYDERABAD, DATED 10 / 03 /20 15 FOR AY 20 11 - 12. 2. ON PERUSAL OF RECORD, WE FIND THAT THERE IS A DELAY OF 154 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. TO THIS EFFECT, THE ASSESSEE FILED A PETITION REQUESTING FOR CONDONATION OF THE SAID DELAY, WHEREIN IT WAS STATED THAT THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT VIDE ORDER DATED 30/03/2013. SUBSEQUENTLY, PR. CIT (CENTRAL), HYDERABAD INVOKED THE PROVISIONS OF SECTION 263 AND PASSED AN ORDER ON 10/03/2015 SETTING ASIDE THE ASSESSMENT MADE U/S 144 OF THE ACT AND DIRECTED THE AO TO RE - DO THE ASSESSMENT. THE ORDER U/S 263 I.T.A. NO S . 98/H/16 & 513 /HYD/ 201 7 THUNUGUNTLA JAGAN MOHAN RAO, GUNTUR. 2 WAS SERVED ON THE ASSESSEE ON 29/06/2015. THE AO COMPLETED THE REASSESSMENT U/S 143(3) RWS 263 OF THE ACT VIDE ORDER DATED 31/12/2015. THE ASSESSEE STATED THAT HE WAS UNDER BONAFIDE IMPRESSION THAT APPEAL, IF ANY, WOULD LIE WHEN THE AO PA SSED AN ORDER IN CONSEQUENCE TO THE DIRECTION OF LD. PR. CIT. HE, THEREFORE APPROACHED THE ADVOCATE ON 27/01/2016 WITH THE ORDER PASSED U/S 143(3) RWS 263 OF THE ACT. THE ADVOCATE, ADVISED THE ASSESSEE THAT THE APPEAL HAS TO BE FILED AGAINST THE ORDER PASS ED BY THE PR. CIT (CENTRAL) U/S 263 OF THE ACT. ACCORDINGLY, THE APPEAL IS FILED BEFORE THE ITAT ON 29/01/2016. 2.1 REFERRING TO THE ABOVE FACTUAL BACK GROUND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELAY OF 154 IN FILING THE APPEAL OCCURRE D AND THE SAME BE CONDONED AND ADMIT THE APPEAL FOR HEARING AND ADJUDICATION, AS THE REASONS WERE BEYOND THE CONTROL OF THE ASSESSEE AND IS NOT INTENTIONAL. 3. THE DR, ON THE OTHER HAND, STRONGLY OPPOSED TO THE CONDONATION OF DELAY. 4. CONSIDERED THE RIVAL SUBMISSIONS. THE CASE OF THE ASSESSEE TO CONDONE THE DELAY IS THAT HE WAS NOT AWARE THAT THE APPEAL LIES AGAINST THE ORDER PASSED U/S 263 OF THE ACT. DURING THE COURSE OF PROCEEDINGS U/S 263, THE PR. CIT (CENTRAL) HAD ISSUED NOTICE TO THE ASSESSEE, IN RESPONSE TO WHICH, THE ASSESSEE FILED DETAILED REPLY BY WAY OF WRITTEN SUBMISSIONS ON 12/01/2015 AND THE PR. CIT SERVED HIS ORDER ON THE ASSESSEE ON 29/06/2015. WE ARE OF THE VIEW THAT HAVING APPEARED BEFORE THE PR. CIT AND FILED THE DETAI LS BEFORE HIM AND RECEIVED THE ORDER FROM PR.CIT. WHAT WE DO NOT UNDERSTAND IS AFTER RECEIVING THE ORDER FROM PR. CIT, WHY I.T.A. NO S . 98/H/16 & 513 /HYD/ 201 7 THUNUGUNTLA JAGAN MOHAN RAO, GUNTUR. 3 HE WAS NOT APPROACHED THE ADVOCATE, WAS NOT EXPLAINED BEFORE US. HE HAS ONLY APPROACHED THE ADVOCATE, WHEN HE RECEIVED THE ORDER PASS ED BY THE AO U/S 143(3) RWS 263 OF THE ACT, ON 31/12/2015. IN OUR CONSIDERED THE VIEW, THE EXPLANATION OFFERED BY THE ASSESSEE FOR THE DELAY IN FILING THE APPEAL IS NOT BONAFIDE AND THEREFORE, IT IS NOT A FIT CASE TO CONDONE THE DELAY AS THE ASSESSEE HAS F AILED TO ESTABLISH THAT THE ASSESSEE IS PREVENTED BY SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN THE STIPULATED TIME. ACCORDINGLY, THE APPEAL IS DISMISSED AS NOT ADMITTED. ITA NO. 513/H/2017 5. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF CIT(A) 1 2, HYDERABAD DATED 24/10/2016. 6. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, DERIVING SHARE INCOME AND CAPITAL GAINS, FILED HIS RETURN OF INCOME FOR THE AY 2011 - 12 ON 01/03/2013 ADMITTING INCOME OF RS. 67,86,340/ - . THERE WAS A S EARCH AND SEIZURE OPERATIONS IN THE CASE OF THE ASSESSEE ON 16/09/2010 AND CONSEQUENTLY, THE ASSESSEES CASE WAS CONVERTED TO SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT DETERMINING THE INCOME ADMITTED OF RS. 67,86,340/ - . 7. THEREAFTER, THE PR. CIT (CENTRAL) BY EXERCISING HIS POWERS VESTED U/S 263 OF THE ACT, CALLED FOR ASSESSMENT RECORDS OF THE ASSESSEE AND ON EXAMINATION, POINTED OUT THAT DURING THE COURSE OF SEARCH AND POST SEARCH PROCEEDINGS, ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE TO THE SOURCES FOR ACQUISITION OF GOLD AND SILVER ARTICLES VALUED AT RS. 1,04,66,134/ - . HE, THEREFORE, SET ASIDE THE ORDER OF ASSESSMENT AND DIRECTED THE AO TO EXAMINE THE CASE OF THE ASSESSEE AND REDO THE ASSESSMENT AFTER MAKING PROPER ENQUIRIES AND INVESTIGATION. I.T.A. NO S . 98/H/16 & 513 /HYD/ 201 7 THUNUGUNTLA JAGAN MOHAN RAO, GUNTUR. 4 8. CONSEQUENT TO THE ORDER PASSED BY THE PR. CIT U/S 263, THE AO ISSUED A SHOW CAUSE NOTICE DATED 11/08/2015 CALLING FOR EXPLANATION OF THE ASSESSEE. IN RESPONSE TO THE SAID SHOW CAUSE NOTICE, AS PER THE AO, THE ASSESSEE VIDE HIS WRIT TEN SUBMISSION LETTER DATED 20/11/2015 HAS NOT FILED ANY INFORMATION/DOCUMENTS EXCEPT SEEKING ADJOURNMENT. THE AO OBSERVED THAT THOUGH SUFFICIENT TIME AND OPPORTUNITY PROVIDED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS U/S 144 AND THE PRESENT PRO CEEDINGS, THE ASSESSEE FAILED TO FURNISH THE REQUISITE INFORMATION/MATERIAL EVIDENCE. HE, THEREFORE, COMPLETED THE ASSESSMENT BASED ON THE MATERIAL AVAILABLE ON RECORD AS UNDER: 3.4. THE CONTENTION OF THE ASSESSEE THAT SOME OF THE GOLD WAS BROUGHT FROM USA BY HIS SON CANNOT BE ACCEPTED FOR THE DETAILED FINDINGS DISCUSSED AT PARA NO. 3.1 ABOVE AND ALSO ON THE REASON THAT THE ASSESSEE FAILED TO FURNISH PROPER PROOF SUCH AS ORIGINAL BILLS/INVOICES, SOURCES OF PURCHASE, CUSTOMS CLEARANCE CERTIFICATES ETC. TO SUGGEST THAT THE GOLD PURCHASED IN USA WAS BROUGHT TO INDIA. DESPITE SUFFICIENT TIME AND OPPORTUNITY GIVEN, THE ASSESSEE FAILED TO FURNISH PROPER EXPLANATION FOR INVESTMENT IN GOLD JEWELLERY AND SILVER ARTICLES AND I T IS PRESUMED THAT THE ASSESSEE HAS NO EXPLANATION TO OFFER IN RESPECT OF UNACCOUNTED GOLD AND SILVER ARTICLES. 3.5. CONSIDERING THE SOCIAL STATUS - AND LIFE STYLE OF ASSESSEE AND NUMBER OF FAMILY MEMBERS (4 LADY MEMBERS, 2, UNMARRIED GRAND DAUGHTERS AND 2 GENT MEMBERS ) AND SUBMISSION OF SRI T.JAGAN MOHAN RAO DURING THE COURSE OF SEARCH PROCEEDINGS THAT SOME OF THE GOLD WAS INHERITED FROM HIS PARENTS AND HIS WIFE TOO HAS GOT SOME GOLD FOR HER PARENTS, THE CREDIT FOR GOLD WORTH RS.26,40 4 68/ - (WEIGHT O FGOLD 1333.57 GMS) IS GIVEN TO THE ASSESSEE AND NOT CONSIDERED FOR ESTIMATION AS UNDISCLOSED INCOME. THE REMAINING GOLD JEWELLERY WEIGHING 4522.07 GMS WORTH RS.93,09,591/ - AND SILVER ARTICLES WEIGHING 33.234 KGS. WORTH RS. 11 ,56,543/ - , THEREBY TOTALLING RS. 1 ,04,6 5,134/ - , IS CONSIDERED AS UNEXPLAINED INVESTMENT U/S 59 OF THE I.T.ACT, IN THE HANDS OF ASSESSEE, AS THE ASSESSEE COULD NOT OFFER ANY I.T.A. NO S . 98/H/16 & 513 /HYD/ 201 7 THUNUGUNTLA JAGAN MOHAN RAO, GUNTUR. 5 SATISFACTORY EXPLANATION IN SUPPORT OF HIS CLAIM WITH SUPPORTING DOCUMENTARY EVIDENCES. 9. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF AO. 10. 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 CIT (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2) THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 1 ,04,66,134/ - MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE GOLD JEWELLERY AND THE SILVER ARTICLES WERE NOT PROPERLY EXPLAINED. 3) THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 234A OF RS.7,51,672/ - , U/S 234B OF RS. 1 0,02,216/ - AND U/S 234C OF RS.36,645/ - . 4) ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 11. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE S SON AND HIS DAUGHTER - IN - LAW BOTH ARE WORKING IN USA. SOME OF THE GOLD SEIZED BY THE DEPARTMENT DURING THE COURSE OF SEARCH BROUGHT BY HIS SON AND HIS DAUGHTER - IN - LA W AND SOME OF THE GOLD WAS GIVEN TO HIS DAUGHTER - IN - LAW BY HER PARENTS AS GIFT. FURTHER, HE SUBMITTED THAT THE ADDITION MADE TO THE EXT ENT OF RS. 1,04,66,134/ - IS NOT CORRECT AND EXCESSIVE. 12. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF REVENUE AUTHORITIES. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. THERE WAS A SEARCH OPERATION CARRIED OUT IN THE CASE OF THE ASSESSEE, IN WHICH, GOLD AND SILVER ARTICLES VALUED AT RS. 1,19,50,059/ - AND RS. 11,56,543/ - RESPECTIVELY I.T.A. NO S . 98/H/16 & 513 /HYD/ 201 7 THUNUGUNTLA JAGAN MOHAN RAO, GUNTUR. 6 WERE FOUND AND OUT OF THIS, GOLD VALUED AT RS. 93,09,531/ - AND SILVE R VALUED AT RS. 11,56,543/ - WERE SEIZED. THE AO GAVE CREDIT FOR GOLD WORTH RS. 26,40,468/ - (WEIGHT OF GOLD 1333.57) TREATING THE SAME AS INHERITED FROM ASSESSEES PARENTS AND THE REMAINING GOLD JEWELLERY WEIGHING 4522.07 GRAMS WORTH RS. 93,05,591/ - AND SIL VER ARTICLES WEIGHING 33.234 KGS WORTH RS. 11,56,543/ - , TOTALLING RS. 1,04,66,134/ - WAS CONSIDERED AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT IN THE HANDS OF THE ASSESSEE. WE FIND THAT IT IS A FACT THAT ASSESSEES SON AND HIS DAUGHTER - IN - LAW BOTH ARE WORK ING IN USA AND THERE IS EVERY POSSIBILITY THAT OUT OF THEIR EARNINGS, THEY MUST HAVE BROUGHT SOME GOLD JEWELLERY. THEREFORE, WE ARE OF THE VIEW THAT SOME MORE CREDIT SHOULD BE GIVEN TO THE ASSESSEE AND ACCORDINGLY, WE DIRECT THE AO TO GIVE CREDIT OF GOLD W ORTH RS. 24,00,000/ - TO THE ASSESSEE AND RECALCULATE THE ADDITION (RS. 1,04,66,134 RS. 24,00,000) ACCORDINGLY. THUS, GROUND NO. 2 IS PARTLY ALLOWED. 13.1 GROUND NOS. 1 & 4 ARE GENERAL IN NATURE, HENCE, NEED NO ADJUDICATION. 13.2 GROUND NO. 3 IS REGAR DING CHARGING OF INTEREST U/S 234A, 234B AND 234C. CHARGING INTEREST UNDER THESE SECTIONS CONSEQUENTIAL IN NATURE, THEREFORE, THE AO IS DIRECTED ACCORDINGLY. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. I.T.A. NO S . 98/H/16 & 513 /HYD/ 201 7 THUNUGUNTLA JAGAN MOHAN RAO, GUNTUR. 7 15. TO SUM UP APPEAL IN ITA NO. 98/H/16 IS DISMISSED AND APPEAL IN ITA NO. 513/H/17 IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER , 201 9. SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER HYDERABAD, DATED 25 TH OCTOBER , 201 9. KV COPY FORWARDED TO: 1. THUNUGUNTLA JAGAN MOHAN RAO, C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYA S ELEGANCE, 3 - 6 - 643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD 500 029. 2 . DC IT , CENTRAL CIRCLE 2( 1 ) , POSNETT BHAVAN, HYDERABAD . 3 . CIT (A) - 1 2 , HYDERABAD. 4. PR. CIT (CENTRAL) , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE