G.M. Ujjanna, V. ITO,

ITA 606/BANG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9441 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS JT
• Assessee Lawyers: V SRINIVASAN
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.606/BANG/2013 ASSESSMENT YEAR : 2008-09 SHRI G.M. UJJANNA, CONTRACTOR, # 1204, SRI LAKSHMI VENKATESWARA NILAYA, VIDYANAGAR, DAVANGERE. PAN: AAGPU 7753G VS. THE INCOME TAX OFFICER, WARD 2, DAVANGERE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, CA RESPONDENT BY : SMT. SWAPNA DAS, JT. CIT(DR) DATE OF HEARING : 18.08.2016 DATE OF PRONOUNCEMENT : 26.08.2016 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 15.02.2013 OF THE CIT(APPEALS), HUBLI FOR THE ASSES SMENT YEAR 2008-09 INTER ALIA ON THE FOLLOWING CONCISE GROUNDS :- ITA NO.606/BANG/2013 PAGE 2 OF 6 1. THE ORDER OF THE CIT[A] SUSTAINING THE ADDITIO NS MADE BY THE A.O. IN SO FAR AS THEY ARE AGAINST THE APPELLAN T ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FAC TS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] HAS SERIOUSLY ERRED IN LAW T HAT THE CREATION OF THE HUF IS AN AFTER-THOUGHT AND THE EXT ENT OF AGRICULTURAL INCOME IS NOT JUSTIFIED WITH BLACK AND WHITE EVIDENCE AND THE APPELLANT WAS NOT PREVENTED BY SUFFICIENT R EASONS FOR NOT FILING THE ADDITIONAL INFORMATION, WHICH WAS FILED BEFORE THE LEARNED CIT[A] BEFORE THE LEARNED A.O. 3. THE LEARNED CIT[A] HAS SERIOUSLY ERRED IN FAILI NG TO APPRECIATE THAT THE DEPOSITS OF RS. 11,10,117/- IN THE FIXED DEPOSIT ACCOUNT NO. 105502831000089 WAS OPENED AS EARLY AS 28/05/1984, WHICH IS 28 YEARS BACK, AS STATED BY TH E BANK AND AS DEPOSED BY THE CHIEF MANAGER OF THE BAN K [PAGE NO.8 OF THE CIT(A)'S ORDER] AND THAT BEING THE CASE , THE BALANCE AS ON 31/03/2008 BEING THE CLOSING BALANCE IN THE SAID BANK AS AGAINST THE OPENING BALANCE OF RS. 10,20,565/- COULD NOT BE ADDED AS AN UNEXPLAINED INVESTMENT IN THE HANDS OF THE AP PELLANT AT ALL AS IT WAS NOT MADE DURING THE PREVIOUS YEAR RELEVAN T TO THE ASSESSMENT YEAR UNDER APPEAL UNDER THE FACTS AN D IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 4. THE LEARNED CIT[A] HAS ERRED IN SUSTAINING THE ADDITION ON SIMILAR GROUNDS IN RESPECT OF THE OTHER BANK ACCOUN T IN VIJAYA BANK FOR SIMILAR SUCH REASONS AND THE ADDITION MADE OF RS. 24,79,914/- AT THE END OF THE YEAR DESERVES TO BE DELETED. 5. THE LEARNED CIT[A] IS NOT JUSTIFIED IN CONFIRMI NG ASSESSING THE INCOME CREDITED TO THE ABOVE BANK ACC OUNT TO THE EXTENT OF RS.80,565/-, WHICH BELONGS TO THE HUF SEP ARATELY AS HE HAS ALREADY ADDED IN A SUM OF RS. 24,79,914 /- WHICH IS AFTER CREDIT OF THIS INTEREST. THUS, THE ADDITION MADE TWICE BY THE LEARNED A.O. OUGHT NOT T O HAVE BEEN CONFIRMED BY THE LEARNED CIT[A]. ITA NO.606/BANG/2013 PAGE 3 OF 6 6. THE LEARNED A.O. IS NOT JUSTIFIED IN ASSESSING THE INCOME TO THE BEST OF HIS JUDGEMENT BY INVOKING SECTION 145[1 A] OF THE ACT, IN RESPECT OF BUSINESS, AS ACCOUNTS HAVE BEEN MAINTAINED, BOOKS ARE AUDITED AND THE UNDERTAKING GIVEN WAS WIT H A VIEW TO AVOID LITIGATION AND NOT THAT IT WAS INCOME. 7. THE INCOME ASSESSED OUGHT TO HAVE BEEN TELESCOP ED WITH THE OTHER ADDITIONS MADE. 8. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER W ITH THE HON'BLE CCIT/DG THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S 234B OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERV ES TO BE CANCELLED, AS THERE WAS NO OBLIGATION TO FILE ANY E STIMATE AND PAY ADVANCE-TAX AS THE CONTRACT RECEIPTS AND INTEREST F ROM BANKS, IF ASSESSABLE IN THE HANDS OF THE APPELLANT REQUIRES T DS. 9. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE C OSTS. 2. GROUND NOS.1 & 2 ARE GENERAL IN NATURE AND NO I NDEPENDENT ADJUDICATION IS CALLED FOR. 3. APROPOS GROUND NO.3, THE LD. COUNSEL FOR THE ASS ESSEE HAS INVITED OUR ATTENTION TO THE BANK STATEMENT OF THE FDRS BY WAY OF ADDITIONAL EVIDENCE WHICH IS AVAILABLE AT PAGE 20 OF THE COMPI LATION OF THE ADDITIONAL EVIDENCE WITH THE SUBMISSION THAT FDRS WERE NOT PUR CHASED DURING THE IMPUGNED ASSESSMENT YEAR. THE INVESTMENT WAS MADE IN FDRS PRIOR TO 4.1.2007 WHICH WAS LATER ON TO BE ACCUMULATED TO A SUM OF RS.11,10,117. THEREFORE, THE ADDITION ON ACCOUNT OF INVESTMENT IN FDRS IS NOT CALLED FOR. BUT THIS ASPECT WAS NOT EXAMINED BY THE CIT(APPEALS ) AND HE CONFIRMED ITA NO.606/BANG/2013 PAGE 4 OF 6 THE ADDITION. THE LD. COUNSEL FOR THE ASSESSEE FUR THER CONTENDED THAT SINCE THE ADDITIONAL EVIDENCE IS RELEVANT AND GOES TO THE ROOT OF THE CASE, IT SHOULD BE ADMITTED AND THE CIT(APPEALS) BE DIRECTED TO READJUDICATE THE ISSUE IN THE LIGHT OF ADDITIONAL EVIDENCE. THESE C ONTENTIONS OF THE ASSESSEE WERE NOT OPPOSED BY THE LD. DR. SHE, HOWEVER, PLAC ED RELIANCE UPON THE ORDER OF CIT(APPEALS). 4. HAVING CAREFULLY EXAMINED THE AFORESAID BANK STA TEMENT AND THE ORDER OF CIT(APPEALS), WE FIND THAT THOUGH THE ASSE SSEE HAS FILED THIS ADDITIONAL EVIDENCE BEFORE THE CIT(APPEALS), BUT HE DID NOT ADMIT THE SAME FOR THE REASONS DISCUSSED IN HIS ORDER. HE HAS NOT RATHER LOOKED INTO THE VERACITY OF THE DOCUMENTS BEFORE ADJUDICATING THE I SSUE. WE ARE THEREFORE OF THE VIEW THAT THIS DOCUMENT IS REQUIRED TO BE EX AMINED WHILE ADJUDICATING THE ISSUE OF ADDITION OF RS.11,10,117 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS. WE THEREFORE SET A SIDE THE ORDER OF CIT(APPEALS) AND RESTORE THE MATTER TO HIS FILE TO READJUDICATE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. 5. APROPOS GROUND NOS. 4 & 5, OUR ATTENTION WAS INV ITED TO THE BANK STATEMENTS OF VIJAYA BANK IN THE NAME OF ASSESSEE W ITH THE SUBMISSION THAT THE AO HAS MADE AN ADDITION OF THE CLOSING BAL ANCE WITH THE BANK, WITHOUT LOOKING TO THE FACT THAT THERE WAS OPENING BALANCE OF RS.40,30,190. THOUGH VARIOUS DEPOSITS WERE THERE DURING THE YEAR, BUT SIMULTANEOUSLY THERE WERE WITHDRAWALS ALSO FROM THE BANK. THEREFO RE, THIS ISSUE IS ALSO ITA NO.606/BANG/2013 PAGE 5 OF 6 REQUIRED TO BE RE-EXAMINED AFRESH IN THE LIGHT OF T HE BANK STATEMENT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THE ASSESSEE HAS FILED THIS EVIDENCE BEFORE THE CIT(APPEALS), BUT HE DID N OT LOOK INTO IT AND CONFIRMED THE ADDITION. THE LD. DR SIMPLY PLACED RELIANCE ON THE ORDER OF CIT(APPEALS). 6. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES, WE FIND THAT THIS ISSUE SHOULD HAVE BEEN ADJUDICATED IN THE LIGHT OF BANK STATEMENT. OPENING BALANCE IN THE ACCOUNT CANNOT BE TREATED TO BE UNEXPLAINED INVESTMENT IN THE BANK DURING THE IMPUGNED ASSESSME NT YEAR. WE THEREFORE SET ASIDE THE ORDER OF CIT(APPEALS) IN TH IS REGARD AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO READJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE BANK STATEMENTS. 7. WITH REGARD TO GROUND NO.6, IT IS NOTICED FROM T HE ASSESSMENT ORDER THAT THE ASSESSEE HAS HIMSELF AGREED FOR THE ESTIMA TION OF NET PROFIT @ 8%. THEREFORE, HE LOST THE RIGHT TO CHALLENGE THE ADDIT ION MADE ON THE BASIS OF THE STATEMENT OF THE ASSESSEE. DURING THE COURSE O F HEARING, THE LD. COUNSEL FOR THE ASSESSEE COULD NOT JUSTIFY AS TO WH Y INCOME AT 8% ON TOTAL RECEIPTS SHOULD NOT BE WORKED OUT. SINCE WE FIND N O MERIT IN THE GROUND OF ASSESSEE, WE DISMISS THE SAME AND CONFIRM THE ORDER OF CIT(APPEALS). ITA NO.606/BANG/2013 PAGE 6 OF 6 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF AUGUST, 2016. SD/- SD/- ( INTURI RAMA RAO ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 26 TH AUGUST, 2016. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.