M. Sudha Rani, Hyd, Hyderabad V. ITO, Ward-13(3), Hyderabad, Hyderabad

ITA 548/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6273 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 19-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Principle of natural justice
• Section: 143(3); 234B; 147; 148

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. 548/HYD/2016 ASSESSMENT YEAR: 2010-11 M. SUDHA RANI, HYDERABAD. PAN ACIPM 4906 D VS. INCOME TAX OFFICER, WARD 13(3), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T. CHAITANYA KUMAR REVENUE BY : SHRI K.E. SUNIL BABU DATE OF HEARING 04-08-2016 DATE OF PRONOUNCEMENT 24-08-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 4, HYDE RABAD FOR AY 2010-11. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE, AN IN DIVIDUAL, FILED HER RETURN OF INCOME FOR THE A.Y. 2010-11 ON 30.07.2010 , DECLARING TOTAL INCOME OF RS. 5,46,330/-. THE RETURN WAS ORIGINALLY PROCESSED UNDER SECTION 143(1) OF THE I.T. ACT, 1961. SUBSEQU ENTLY, A NOTICE UNDER SECTION 148 HAS BEEN ISSUED. THE ASSESSEE FIL ED A LETTER DATED 14.03.2013 STATING THAT THE RETURN OF INCOME FILED ON 30.07.2010 MAY BE TREATED AS THE RETURN FILED WITH REFERENCE TO TH E NOTICE ISSUED UNDER SECTION 148 OF THE I.T. ACT. SUBSEQUENTLY, DU RING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) READ WI TH SECTION 147 OF THE I.T. ACT, THE A.O. OBSERVED THAT THE ASS ESSEE HAS PURCHASED A 'VILLA' PLOT NO.B-47 FROM M/S. EMMAR HI LLS TOWNSHIP P. 2 ITA NO. 548/H/16 M. SUDHA RANI LTD., THE VALUE OF WHICH, WAS AGREED AT RS.58,10,00 0/-, WHICH WAS PAID BY CHEQUE. THE A.O. OBSERVED THAT IT HAS COME TO LIGHT THAT THE ASSESSEE HAS PAID A SUM OF RS.58,10,000/- OVER AND ABOVE THE AGREED VALUE OF THE PLOT WHICH WAS MADE IN CASH. HE ALSO OBSERVED THAT THERE WAS A CBI CASE IN THE CASE OF M/S. EMMAR HILLS TOWNSHIP P. LTD., WHEREIN ONE MR. T. RANGA RAO HAD GIVEN A S TATEMENT THAT HE HAS COLLECTED EXCESS AMOUNTS FROM THE BUYERS RANGIN G FROM RS.4000 PER SQ. FEET TO RS.45,000 PER SQ. FEET ON THE INSTR UCTIONS OF MR. KONERU RAJENDRA PRASAD. THUS, ACCORDING TO THE A.O. , THE ASSESSEE HAS PAID AN EXCESS AMOUNT OF RS. 58,10,000/-. THE ASSESSEE'S EXPLANATION WAS CALLED FOR. THE ASSE SSEE EXPLAINED THAT SHE PURCHASED A PLOT ADMEASURING 1162 SQ.YDS @ RS. 5,000/- PER SQ.YD. FOR RS. 58,10,000/- FROM M/S. EMMAR HILLS T OWNSHIP P. LTD., WHICH WAS PAID BY WAY OF CHEQUE. REGARDING THE EXCE SS PAYMENT OF RS. 58,10,000/-. THE ASSESSEE MADE NO EXPLANATION. THE A.O. THEREFORE, HELD THAT AS THE ASSESSEE HAS FAILED TO SUBSTANTIATE HER CLAIM OF NOT MAKING THE PAYMENT OF RS. 58,10,000/- OVER AND ABOVE THE SALE CONSIDERATION OF RS. 58,10,000/-. HE TREAT ED THE AMOUNT AS UNDISCLOSED INVESTMENT UNDER SECTION 69B OF THE I.T . ACT AND BROUGHT IT TO TAX. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE SAID ADDITION AND THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE WHILE REITERAT ING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORI TIES BELOW, SUBMITTED THAT THE ADDITION MADE IN THE HANDS OF TH E ASSESSEE IS SOLELY ON THE BASIS OF THE STATEMENT OF MR. T. RANG A RAO RECORDED BY THE CBI. HE SUBMITTED THAT THIS ISSUE HAD ARISEN IN THE CASE OF MR. G. MAHESH BABU ALSO WHEREIN AFTER CONSIDERING THE ASSE SSEE'S CONTENTIONS AT LENGTH, THE ISSUE HAS BEEN REMANDED TO THE FILE OF THE A.O. WITH A DIRECTION TO RE-DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING REASONABLE OPPORTUNITY OF BEING H EARD TO THE 3 ITA NO. 548/H/16 M. SUDHA RANI ASSESSEE. HE PRAYED FOR SIMILAR DIRECTIONS IN THE C ASE OF THE ASSESSEE HEREIN. 4. THE LD. D.R. HOWEVER, SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW. 5. CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSELS AND PERUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE DECISIO N OF ITAT IN THE CASE OF MR. G. MAHESH BABU VS. DCIT, CENTRAL CIRCLE -7, HYDERABAD IN ITA.NO.256 & 286/HYD/2015, 55 TO 58/HYD/2015 DATED 27.11.2015 FOR THE A.YS. 2006-07 AND 2007-08 AND 2009-10 TO 2012- 2013 RESPECTIVELY. WE FIND THAT THE TRIBUNAL, IN SIMILAR FACTS AND CIRCUMSTANCES, AFTER CONSIDERING THE VARIOUS ISSUE S AT LENGTH HAS DIRECTED AS UNDER : '23. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIAL ON RECORD. IT IS VERY MUCH EVI DENT FROM THE ASSESSMENT ORDER THAT MAINLY RELYING UPON THE MATER IAL GATHERED AS A RESULT OF INVESTIGATION MADE DURING THE ASSESS MENT PROCEEDINGS OF EHTPL, PARTICULARLY ON THE BASIS OF STATEMENT RECORDED FROM SHRI T.RANGA RAO, THE ASSESSING OFFIC ER HAS COME TO THE CONCLUSION THAT THE ASSESSEE HAS PAID O N MONEY TO THE EXTENT OF RS.1,99,20,000 OVER AND ABOVE THE REC ORDED SALE CONSIDERATION. OF COURSE, BESIDES THE STATEMENT OF SHRI T.RANGA RAO, IT IS SEEN THAT THE DEPARTMENT HAS GATHERED IN FORMATION IN EXERCISE OF POWER UNDER S.133(6) FROM SOME OTHER BU YERS, WHO AGREED TO HAVE PAID ON- MONEY TOWARDS PURCHASE OF P LOTS/VILLAS FROM EHTPL. IT IS RELEVANT TO NOTE THAT WHEN THE AS SESSEE WAS CALLED UPON TO EXPLAIN WHETHER HE HAS PAID ON-MONEY , HE STOUTLY DENIED THE SAME AND INSISTED THAT APART FROM RECORD ED SALE CONSIDERATION, HE HAS NOT PAID ANYTHING MORE. IT IS THE PLEA OF THE ASSESSEE BEFORE THE CIT(A) AS WELL AS BEFORE US THA T THE ASSESSING OFFICER HAS UTILISED THE MATERIAL GATHERE D AS A RESULT OF INVESTIGATION/ENQUIRY ADVERSE TO THE ASSESSEE WI THOUT EITHER SUPPLYING THE SAME TO HIM OR ALLOWING AN OPPORTUNIT Y TO THE ASSESSEE TO CROSS EXAMINE SHRI T.RANGA RAO, WHOSE S TATEMENT PRIMARILY FORMED THE BASIS OF THE ADDITION. WE FIND THAT THE AFORESAID SUBMISSIONS OF THE ASSESSEE ARE ACCEPTABL E. IT IS VERY MUCH CLEAR FROM THE ASSESSMENT ORDER THAT THOUGH TH E ASSESSING OFFICER HAS REFERRED TO THE INFORMATION RECEIVED TO SUGGEST THAT THE ASSESSEE HAS PAID AMOUNT OF RS.1,99,20,000, NEI THER IN THE ASSESSMENT ORDER NOR EVEN SUBSEQUENTLY NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW WHAT EXACTLY IS THE 4 ITA NO. 548/H/16 M. SUDHA RANI INFORMATION/EVIDENCE, WHICH INDICATED THAT ASSESSEE HAS PAID THE ON MONEY OF RS.1,99,20,000. FURTHER, THE INVESTIGAT ION RESULTS OF CBI AS WELL AS STATEMENT OF SHRI T.RANGA RAO WHICH HAVE BEEN FOLLOWED BY WAY OF CHARGE SHEETS AND SUPPLEMENTARY CHARGE SHEETS, THOUGH HEAVILY RELIED UPON BY THE ASSESSING OFFICER, BUT ADMITTEDLY THEY WERE NOT SUPPLIED TO THE ASSESSEE. EVEN THE LEARNED DEPARTMENTAL REPRESENTATIVE ACCEPTS THE AFO RESAID FACTUAL POSITION. THOUGH IN THE COURSE OF ASSESSMEN T PROCEEDINGS THERE IS NO FETTER ON THE ASSESSING OFF ICER TO CONDUCT ANY ENQUIRY OR INVESTIGATION AS FOUND NECES SARY FOR ASCERTAINING THE REAL NATURE OF TRANSACTION OR INCO ME, AT THE SAME TIME, IT IS SALUTARY PRINCIPLE OF LAW THAT ANY ADVE RSE MATERIAL GATHERED BY HIM, WHICH HE PROPOSES TO UTILISE AGAIN ST THE ASSESSEE, MUST BE CONFRONTED TO THE ASSESSEE FOR AL LOWING HIM AN EFFECTIVE OPPORTUNITY OF REBUTTAL. THIS IS IN KE EPING WITH THE PRINCIPLE OF NATURAL JUSTICE THAT NO PERSON SHOULD BE CONDEMNED WITHOUT GIVING A FAIR OPPORTUNITY OF HEARING. IN TH E PRESENT CASE, THOUGH THE BASIS FOR ADDITION IS THE STATEMENT RECO RDED FROM SHRI T. RANGA RAO, ADMITTEDLY, THE ASSESSING OFFICER HAS NEITHER SUPPLIED A COPY OF THE STATEMENT TO THE ASSESSEE NO R ALLOWED HIM AN OPPORTUNITY TO CROSS EXAMINE HIM, THOUGH THE ASS ESSEE IN HIS LETTER DATED 13.3.2014 HAS SPECIFICALLY ASKED FOR C ROSS EXAMINATION OF SHRI T.RANGA RAO. IN THE AFORESAID V IEW OF THE MATTER, THERE IS VIOLATION OF RULES OF NATURAL JUST ICE BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION OF RS.1 ,99,20,000. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFIC ER, ON ACCOUNT OF ALLEGED PAYMENT OF ON- MONEY, CANNOT BE SUSTAINED. 24. HAVING HELD SO, IT IS NECESSARY TO EXAMINE WHET HER NON- COMPLIANCE OF THE RULES OF NATURAL JUSTICE IN THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE HAS MADE THE ASSE SSMENT VOID AB INITIO, OR THE ASSESSING OFFICER CAN BE ASK ED TO DECIDE THE ISSUE AGAIN AFTER FOLLOWING PRINCIPLES OF NATUR AL JUSTICE, AS REQUESTED BY THE EARNED DEPARTMENTAL REPRESENTATIVE . AS ALREADY STATED ELSEWHERE IN THE ORDER, THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HON'BL E SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUP RA), TO PLEAD THAT NOT ALLOWING THE ASSESSEE TO CROSS EXAMINE THE WITNESS HAS RENDERED THE ASSESSMENT ORDER VOID. HOWEVER, ON A P ERUSAL OF THE SAID JUDGMENT OF THE HON'BLE SUPREME COURT IT IS FOUND TO BE FACTUALLY DISTINGUISHABLE. IN THAT CASE, HON'BLE SU PREME COURT HAS INITIALLY REMITTED BACK THE MATTER TO THE TRIBU NAL FOR DECIDING THE ISSUE IN ONE WAY OR THE OTHER, AFTER CONSIDERIN G THE SUBMISSIONS OF THE ASSESSEE. HOWEVER, IT IS NOTICED THAT THE HON'BLE SUPREME COURT ULTIMATELY ALLOWED ASSESSEE'S APPEAL BECAUSE THE TRIBUNAL WHILE EXAMINING THE ISSUE OF C ROSS EXAMINATION OF WITNESS HAS MERELY OBSERVED THAT EVE N SUCH CROSS-EXAMINATION WOULD NOT HAVE IMPROVED THE ASSES SEE'S CASE. HON'BLE SUPREME COURT HELD, AS THE DEMAND RAISED AG AINST 5 ITA NO. 548/H/16 M. SUDHA RANI ASSESSEE WAS SOLELY RELYING UPON THE STATEMENT OF W ITNESS, DENIAL OF CROSS EXAMINATION TO ASSESSEE VITIATED TH E ORDER. UNLIKE THE CASE OF ADAMAN TIMBER INDUSTRIES (SUPRA) IN ASS ESSEE'S CASE STATEMENT OF SHRI T.RANGA RAO IS NOT THE ONLY PIECE OF EVIDENCE RELIED UPON BY THE ASSESSING OFFICER. IT IS RELEVAN T TO NOTE THAT APART FROM THE STATEMENT OF SHRI T.RANGA RAO, THERE ARE OTHER INFORMATION GATHERED BY THE DEPARTMENT BY TAKING RE COURSE TO S.133(6) AS PER WHICH SOME OF THE BUYERS OF THE PLO TS HAVE ADMITTED OF HAVING PAID ON-MONEY. FURTHER, THROUGH A PROCESS OF INVESTIGATION, CBI HAS FOUND IRREGULARITIES IN THE ACTIVITIES OF EHTPL AND SUBMITTED CHARGE SHEET(S). AS THE STATEME NT OF SRHI T.RANGA RAO, THE ENTIRE CHARGE SHEET(S) FILED BY CB I AND INFORMATION GATHERED BY THE DEPARTMENT THROUGH ENQU IRY HAVE NOT BEEN BROUGHT ON RECORD BEFORE US EITHER BY ASSESSEE OR DEPARTMENT, WE ARE UNABLE TO EXAMINE THE EXTENT OF ASSESSEE'S INVOLVEMENT, IF AT ALL, IN THE IRREGULARITIES ALLEG ED BY CBI OR WHETHER THE ASSESSEE HAS ALSO BEEN IMPLICATED BY TH E INVESTIGATION AGENCY OR ANY OTHER PERSON. THEREFORE , IN OUR VIEW, ISSUE RELATING TO PAYMENT OF ON-MONEY REQUIRES TO B E EXAMINED AFRESH BY ASSESSING OFFICER AFTER CONFRONTING EVIDE NCE/MATERIAL SOUGHT TO BE RELIED UPON TO THE ASSESSEE AND SEEKIN G HIS RESPONSE ON THEM. THE ASSESSING OFFICER MUST ALSO D ISCLOSE TO THE ASSESSEE THE MATERIAL/INFORMATION ON THE BASIS OF WHICH HE HAS QUANTIFIED THE ON-MONEY PAYMENT OF RS.1,99,20,0 00. IF THE ASSESSING OFFICER IS ABLE TO ESTABLISH ON THE BASIS OF EVIDENCE GATHERED THAT THE ASSESSEE HAS PAID ON-MONEY TO THE EXTENT QUANTIFIED BY HIM, THEN HE CAN MAKE THE ADDITION UN DER S.69B. ON THE FLIP SIDE, IF THERE IS NO EVIDENCE AVAILABLE ON RECORD TO DIRECTLY LINK THE ASSESSEE TOWARDS PAYMENT OF ON-MO NEY, THEN MERELY ON THE BASIS OF THE FACT THAT SOME OTHER BUY ERS HAVE ACCEPTED PAYMENT OF ON-MONEY, NO ADDITION CAN BE MA DE. WITH THE AFORESAID OBSERVATIONS, WE REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RE-DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING REASONABLE OPPORT UNITY TO THE ASSESSEE, DULY COMPLYING WITH THE PRINCIPLES OF NAT URAL JUSTICE. THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSES.' AS THE FACTS AND CIRCUMSTANCES BEFORE US ARE ALSO S IMILAR, WE DEEM IT FIT AND PROPER TO REMAND THE CASE OF THE ASSESSEE ALSO TO THE FILE OF THE A.O. WITH SIMILAR DIRECTIONS. THUS, GROUND OF A PPEAL NO. 3 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO. 2 ON THE VALIDITY OF THE REOPENING O F THE ASSESSMENT HAS NOT BEEN ARGUED BY THE LD. COUNSEL FOR THE ASSE SSEE AT THIS STAGE AS THE ASSESSMENT HAS BEEN SET ASIDE AND THER EFORE, THIS GROUND IS NOT ADJUDICATED AT THIS STAGE. 6 ITA NO. 548/H/16 M. SUDHA RANI 7. AS REGARDS GROUND NO. 4 THAT THE CIT(A) ERRED IN HOLDING THAT AN AMOUNT OF RS. 34,633/- NOT EXPLAINED PROPERLY, IT I S OBSERVED THAT THE AO MADE THIS ADDITION SINCE THE ASSESSEE FAILED TO FURNISH THE DETAILS FOR RS. 34,663/- TOWARDS COMMISSION. THIS GROUND IS RESTORED TO THE FILE OF THE AO TO DECIDE AFRESH AFTER EXAMINING THE DETAILS WHICH WILL BE FURNISHED BY THE ASSESSEE BEFORE HIM. WE DIRECT THE ASSESSEE TO SUBSTANTIATE HER CLAIM BY FURNISHING THE DETAILS. T HIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO. 5 IS CHARGING OF INTEREST U/S 234B. A S THE CHARGING OF INTEREST U/S 234B OF THE ACT IS CONSEQUENTIAL IN NATURE BEING DEPENDENT UPON THE FINAL DETERMINATION OF INCOME, T HIS GROUND IS NOT REQUIRED TO BE ADJUDICATED UPON AT THIS STAGE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAH MAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 24 TH AUGUST, 2016 KV COPY TO:- 1) M. SUDHA RANI, C/O T. CHAITANYA KUMAR, FLAT NO. 102, GOURI APTS. URDU LANE, HIMAYATNAGAR, HYDERABAD. 2) IT), WARD 13(3), HYDERABAD 3) CIT(A) - 4, HYDERABAD 4 PR. CIT 4, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 7 ITA NO. 548/H/16 M. SUDHA RANI S.NO. DESCRIPTION DATE INTLS DS1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./ P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER