Koppuru Ramesh Babu , Nellore V. Income Tax Officer, Ward-1, Nellore

ITA 521/Hyd/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8954 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 03-07-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNA
• Assessee Lawyers: S RAMA RAO
• Keywords: Gift; Source of fund; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES SMC : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO. 521/HYD/2019 ASSESSMENT YEAR: 2010-11 KOPPURU RAMESH BABU, NELLORE [PAN: AENPK1264M] VS INCOME TAX OFFICER, WARD-1, NELLORE (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SMT. KOMALI KRISHNA, DR DATE OF HEARING : 03-07-2019 DATE OF PRONOUNCEMENT : 10-07-2019 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS ASSESSEES APPEAL FOR THE AY. 2010-11, AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-TI RUPATI, DATED 25-02-2019. 2. BRIEF FACTS OF THE CASE ARE THAT, ASSESSEE, AN INDI VIDUAL, ENGAGED IN THE BUSINESS OF WHOLESALE TRADING IN TEA AN D COFFEE AND ZANDU BALM, FILED HIS RETURN OF INCOME FOR THE RE LEVANT ASSESSMENT YEAR. AS PER THE INFORMATION RECEIVED BY THE DEPARTMENT, THE ASSESSEE HAS PURCHASED IMMOVEABLE PR OPERTY ADMEASURING 10.50 AC. IN SURVEY NO.76.78 (NEW SURVE Y NO.58/9), ANPALLIPADU (V) GURUVINDAPUDI PANCHAYAT, ITA. NO. 521/HYD/2019 :- 2 -: MANOBOLU (M) BY WAY OF SALE DEED DT.06-06-2009 FOR RS.10,50,000/- ALONG WITH ONE MORE PERSON SHRI VELAM PALLI JAGAN MOHAN, BUT AS PER THE RETURN OF INCOME, ADMITTED INCOME IS ONLY RS.2,72,720/- AND THE ASSESSEE HAD NO T SHOWN THE ABOVE ASSET IN THE BALANCE SHEET FOR THE YEAR ENDED 31-03- 2010. IN ORDER TO VERIFY THE SOURCES OF INCOME FOR P URCHASE OF THE LAND, A NOTICE U/S.148 OF THE INCOME TAX ACT [ACT] D T.31- 03-2017 WAS ISSUED AND SERVED ON THE ASSESSEE. AS R EGARDS THE SOURCES FOR PURCHASE OF THE SAID PROPERTY, THE ASS ESSEE SUBMITTED THAT OUT OF THE TOTAL CONSIDERATION OF RS. 10,50,000/-, ASSESSEE HAS PAID A SUM TO THE EXTENT OF RS.8,50,000/- FROM OUT OF HIS BOOKS OF ACCOUNT AND A CCOUNTED THE SAME IN HIS CAPITAL A/C. IT WAS SUBMITTED THAT THE BA LANCE OF RS.2 LAKHS WAS CONTRIBUTED BY SHRI VELAMPALLI JAGA N MOHAN, WHO IS A RETAIL MERCHANT AND IS ALSO ASSESSED TO INCOME TAX. HOWEVER, DURING THE HEARINGS BEFORE THE A SSESSING OFFICER, NO OTHER INFORMATION WAS FILED. FROM THE CA PITAL A/C FOR THE YEAR ENDED 31-03-2010, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS BROUGHT A FIXED AMOUNT OF RS.8,50,000 /- AS ADVANCE AMOUNT, TRANSFERRED FROM HIS WIFE SMT. K.SUBH ASHINI. BUT SINCE NO CORROBORATIVE EVIDENCE TO SUBSTANTIATE THIS TRANSACTION WAS FILED, THE ASSESSING OFFICER TREATED TH E SAME AS ASSESSEES INCOME AND BROUGHT THE SAME TO TAX. 2.1. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) ALONG WITH ADDITIONAL EVIDENCE IN THE FORM OF COPIES OF RETURNS OF INCOME FILED BY HIS WIFE BEFORE THE ASSESSING OF FICER. THE CIT(A) OBSERVED THAT THE AFFIDAVIT AND OTHER DOCUMENTS A RE ITA. NO. 521/HYD/2019 :- 3 -: ADDITIONAL EVIDENCE AND THAT THERE IS NO FORMAL REQUEST FOR ADMISSION OF THE SAME. THEREFORE, HE DID NOT ADMIT THE ADDITIONAL EVIDENCE BUT CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. THE ASSESSEE IS IN SECOND APPEA L BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX(APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT THE APPELLANT INVESTED RS. 8,50,000/- FROM OUT OF THE FUNDS MADE AVAILABLE BY HIS WIFE SMT.K.S UBHASHINI. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE ADMITTED THE EVIDENCE PRODUCED AND ALLOWED THE APPE AL. 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT SMT.K.SUBHASHINI CONFIRMED THE FACT THAT SHE GIFTED AN AMOUNT OF RS.8,50,000/- TO HER HUSBAND I. E. THE APPELLANT AND THAT THE SAID AMOUNT WAS UTILISED IN PAYING THE ADVANCE FOR PURCHASE OF THE PROPERTY. 5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AS THE NECESSARY PROOF WAS PROVIDED. 6) ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 3. THE LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATIN G THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, SUBMITTED THAT ASSESSEES WIFE IS AN INDIVIDUAL ASSESSEE AND IS HAVING INDEPENDENT SOURCES OF INCOME FROM WHICH SHE HAS GIF TED A SUM OF RS.8,50,000/- TO THE ASSESSEE. HE SUBMITTED THA T NECESSARY EVIDENCE WAS FILED BEFORE THE CIT(A), WHO DID NOT ADMIT THE SAME AND THEREFORE PRAYED FOR ADMISSION OF TH E ITA. NO. 521/HYD/2019 :- 4 -: ADDITIONAL EVIDENCE AND REMAND TO THE FILE OF ASSESSIN G OFFICER FOR RECONSIDERATION OF THE ISSUE. 4. LD.DR WAS ALSO HEARD IN THIS REGARD. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAD ALL ALONG BEEN C LAIMING THAT THE SUM OF RS.8,50,000/-, IS A GIFT FROM HIS WIFE. THE ADDITIONAL EVIDENCE IS TO SHOW THAT ASSESSEES WIFE IS ALSO ASSESSED TO TAX AND THAT SHE HAD SOURCES TO GIVE THE GIFT . THEREFORE, THE ADDITIONAL EVIDENCE WOULD GO TO THE ROOT OF THE MATTER AND NEEDS TO BE ADMITTED IN THE INTEREST OF JUSTIC E. THEREFORE, WE ADMIT THE ADDITIONAL EVIDENCE AND REMAND THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR VERIFICATIO N AND DENOVO CONSIDERATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTI ON THAT ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEA RING. HENCE, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY, 2019 SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED 10 TH JULY, 2019 TNMM ITA. NO. 521/HYD/2019 :- 5 -: COPY TO : 1. SHRI KOPPURU RAMESH BABU, 6-1-9, PROPRIETOR: SRI NAGA SURESH AGENCIES, PRAKASH NAGAR, STONEHOUSEPET, NELLORE. 2. THE INCOME TAX OFFICER, WARD-1, NELLORE. 3. CIT(A)-TIRUPATI. 4. PR.CIT-TIRUPATI. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.