N Padmaja, Hyd, Hyderabad V. DCIT, Circle-3(2), Hyderabad, Hyderabad

ITA 646/HYD/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9778 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 02-04-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Additional evidence
• Section: 143(3); 2(22)(e); 69A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC - B , HYDERABAD BEFORE SHRI P. MADHAVI DEVI, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO S . 646 & 648 /HYD/201 6 ASSESSMENT YEAR S : 2006 - 07 & 2010 - 11 N. PADMAJA, HYDERABAD. PAN A BCPN 2453P VS. DY. COMMISSIONER OF INCOME - TAX, CIRCLE - 3 ( 2 ), HYDERABAD. (APP ELLANT ) (RESPONDENT ) ASSESSEE BY : S HRI P. MURALI MOHAN RAO REVENUE BY : S HRI M.N. MURTHY NAIK DATE OF HEARING : 25 - 0 6 - 20 20 DATE OF PRONOUNCEMENT : 06 - 0 7 - 20 20 ORDER THESE APPEALS WERE EARLIER HEARD AND DISPOSED OF BY ITAT VIDE ITS ORDER DATED 6 TH JULY, 2017. THEREAFTER, BOTH THE REVENUE AS WELL AS ASSESSEE FILED MAS SEEKING RECTIFICATION OF THE ORDER OF THE TRIBUNAL. INITIALLY, THE MAS FILED BY THE REVENUE IN MA NOS . 70 & 71/HYD/2017 WERE HEARD & CONSIDERED AND DISMISSED BY THE TRIBUNAL. THEREAFTER, THE ASSESSEE FILED MA S AND VIDE ITS ORDER DATED 16 TH MARCH, 2018 IN MA NOS. 12 & 13/HYD/2018, THE TRIBUNAL RECALLED THE ORDER PASSED IN ITA NOS. 646 & 648/HYD/2016 ONLY FOR ADJUDICATION OF THE ALTERNATE GROUND RAISED BY THE ASSESSEE. THAT IS HOW, THE APPEALS CAME UP FOR HEARING AGAIN TO DEAL WITH GROUND NO. 11 RAISED BY THE ASSESSEE, WHICH IS AS FOLLOWS: 2 ITA.NO S . 646 & 648 /HYD/201 6 N. PADMAJA, HYD. 11. W ITHOUT PREJUDICE TO GROUND NO.1 TO 6, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN OBSERVING THAT IF THE SOURCES WERE HELD TO BE FROM M /S . SPR INFRASTRUCTURE (INDIA) LTD., THEN ALSO, THE AMOUNT OF RS.30,89, 000/ - IS LIABLE TO BE TAXED U/S 2(22)( E) OF T HE ACT IN SPITE OF THE FACT THAT THE AMOUNT REPRESENTS ADVANCE RECEIVED BY THE APPELLANT ON THE PROPOSED PURCHASE OF PLOT BY M /S SPR INFRASTRUCTURE (INDIA) LTD. 2. BRIEF FACTS RELAT ING TO THIS ISSUE , AS TAKEN FROM ITA NO. 646/HYD/2016, ARE THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS. 13,89,000/ - INTO HER BANK ACCOUNTS IN ABN - AMRO BANK ACCOUNT AND RS. 17 LAKHS IN ING VYSYA BANK DURING THE RELEVANT FY. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE DEPOSITS, THE ASSESSEE REPLIED THAT IT I S THE ADVANCE RECEIVED TOWARDS THE PROPOSED SALE OF PROPERTY . WHEN THE ASSESSEE WAS REQUIRED TO FILE DETAILS, THE ASSESSEE FAILED TO FILE SUCH DETAILS AND THE AO TREATED THE SAME AS UNEXPLAINED MONEY AND BROUGHT IT TO TAX U/S 69A OF THE IT ACT. 3. AGGRIEV ED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) STATING THAT SHE HAD PROPOSED TO SELL THE PROPERTY, I.E., A PLOT IN VENKATESHWARA COOPERATIVE HOUSING BUILDING SOCIETY, JUBILEE HILLS TO M/S SPR INFRASTRUCTURE (INDIA) LTD. (SPRIIL) AND SHE HAD RECEIVE D THE MONEY FROM SPRIIL, WHICH WAS DEPOSITED IN HER BANK ACCOUNTS. SHE ALSO SUBMITTED HER LEDGER ACCOUNT WITH SPRIIL AND CLAIMED THAT DUE TO PAUCITY OF TIME, SHE COULD NOT SUBMIT THIS INFORMATION BEFORE THE AO. SINCE THIS CONSTITUTED ADDITIONAL INFORMATIO N UNDER RULE 46A, THE CIT(A) REMANDED IT TO THE FILE OF THE AO FOR HIS REMAND REPORT. 3 ITA.NO S . 646 & 648 /HYD/201 6 N. PADMAJA, HYD. 3.1 THE REMAND REPORT DATED 17/08/2015 WAS SUBMITTED BY THE AO AND THE SAME WAS SUPPLIED TO THE ASSESSEE. THE ASSESSEE REITERATED HER SUBMISSIONS AND AFTER CONSIDERING T HE SAME, THE CIT(A) CONFIRMED THE ADDITION MADE U/S 69A OF THE ACT AND ALSO MENTIONED THAT IN THE ALTERNATIVE EVEN IF THE SOURCES WERE HELD TO BE FROM SPRIIL , THE AMOUNT IS LIABLE TO BE TAXED U/S 2(22)(E) OF THE ACT. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. G ROUND NO. 11 IS THE ALTERNATE GROUND WHICH IS TO BE DECIDED NOW. BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE TRIBUNAL HAS ACCEPTED THE SOURCE OF THE DEPOSITS AS ADVANCES RECEIVED FROM M/S SPRIIL AND HENCE HAS DELETED THE SAID ADDITION MADE U/S 69A OF THE AC. HE HAS NOW FILED ADDITIONAL EVIDENCE BY MAIL BEFORE THE TRIBUNAL AND SUBMITTED THAT THE TRANS ACTION OF SALE OF PROPERTY TO SPRIIL IS A BUSINESS TRANSACTION AND THAT PURSUANT TO THE SAID TRANSACTION ONLY, THE ASSESSEE HAS RECEIVED AN ADVANCE OF RS. 30,89,000/ - . HE SUBMITTED THAT THE ASSESSEE IS A DIRECTOR OF THE COMPANY AND FOR THE BUSINESS PURPOS E S OF THE COMPANY , T HE ASSESSEE HAD GIVEN HER PERSONAL PROPERTY AS COLLATERAL SECURITY TO IDBI BANK FOR THE LOAN TAKEN BY THE COMPANY. IN THIS CONNECTION, HE HAS FILED A COPY OF THE NOTICE ISSUED BY THE IDBI BANK FOR AUCTION SALE OF THE SAID PROPERTY BELONGING TO THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMPANY INTENDED TO PURCHASE THE PLOT FROM THE ASSESSEE AND HAS PAID THE INITIAL AMOUNT AND, THEREAFTER, SINCE THE BUSINESS WAS NOT GOOD, THE COMPANY DEFAULTED IN PAYING THE LOAN 4 ITA.NO S . 646 & 648 /HYD/201 6 N. PADMAJA, HYD. AMOUNT AND HAS ALSO NOT PAID THE BALANCE AMOUNT TO THE ASSESSEE FOR PURCHASE OF THE PLOT. HE, THEREFORE, SUBMITTED THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BE ADMITTED AND THE TRANSACTION BE CONSIDERED AS A BUSINESS TRANSACTION. 5. THE LD. DR, ON THE OTHER HAND, OPPOSED T HE ADMI SSION OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND S UBMITTED THAT THE ASSESSEE IS CHANGING HER STAND FROM TIME TO TIME. 6. HAVING REGARD TO THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD, I FIND THAT INITIALLY DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) RWS 148 OF THE ACT, THE AO HAS ONLY MADE THE ADDITION U/S 69A OF THE ACT AND IT WAS ONLY IN THE REMAND REPORT, THAT THE AO PROPOSED ADDITION U/S 2(22)(E) OF THE ACT. THE ASSESSEE HAD STATED THAT SHE IS THE MANAGING DIRECTOR OF THE SPRIIL AND THAT ADVANCE TO THE EXTENT OF RS. 30,89,000/ - WAS RECEIVED FOR PURC HASE OF PLOT BY THE SAID COMPANY FROM THE ASSESSEE AND, THEREFORE, PROVISIONS OF SECTION 2(22)(E) ARE NOT APPLICABLE. THE CIT(A), THEREAFTER, DID NOT EXAMINE THE BUSINESS EXIGENCY OR THE PURPOSE FOR WHICH THE ASSESSEE HAS RECEIVED THE ADVANCE FROM SPRIIL, BUT, HAS GIVEN A FINDING THAT THE AMOUNT IS LIABLE TO TAX U/S 2(22)(E) OF THE ACT ALSO. SINCE THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE TRIBUNAL IS ADDITIONAL EVIDENCE AND IT GOES GOES TO THE ROOT OF THE MATTER, I DEEM IT FIT AND PROPER TO ADMIT THE SAME AND SINCE THE ADDITIONAL EVIDENCE WAS NOT FILED BEFORE THE AUTHORITIES BELOW, DUE TO WHICH, THERE WAS NO OCCASION TO EXAMINE THE SAME BY THE AO AND CIT(A), I REMAND THE MATTER TO THE FILE OF THE 5 ITA.NO S . 646 & 648 /HYD/201 6 N. PADMAJA, HYD. AO WITH A DIRECTION TO EX AMINE THE BUSINESS EXIGENCY OF THE ADVANCES OF RS. 30,89,000/ - RECEIVED BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 11 RAISED BY THE ASSESSEE IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 646/HYD/2016 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. AS THE FACTS AND GROUND RAISED IN ITA NO. 648/HY D/2016 ARE MATERIALLY IDENTICAL TO THAT OF ITA NO. 646/HYD/2018, FOLLOWING THE DECISION IN ITA NO. 646/HYD/2018, THIS GROUND IS ALSO REMITTED TO THE FILE OF THE AO WITH IDENTICAL DIRECTIONS. 9. TO SUM UP, BOTH THE APPEALS UNDER CONSIDERATION ARE TREATED A S ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 6 TH JU LY , 20 20 . SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMEBR HYDERABAD, DATED: 6 TH JULY , 2020 KV 1) N. PADMAJA, C/O P. MURALI & CO., CAS, 6 - 3 - 655/2/3, 1 ST FLOOR, S OMAJIGUDA , HYDERABAD 500 082 2) DCIT, CIRCLE 3 ( 2 ), HYDERABAD . 3) CIT(A) - 3 , HYDERABAD 4) PR. CIT 3, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE. 6 ITA.NO S . 646 & 648 /HYD/201 6 N. PADMAJA, HYD.